16 March 2002

IN CORN'S CRADLE, U.S. IMPORTS BURY FAMILY FARMS

DUMP GE CORN
April 10-17, activists in North and South America will dump corn and organize picket lines, protests, press conferences and petitions. To organize a protest or press event in your local area (US or Canada) contact jessica@organicconsumers.org or call in the USA(218-226-2164).
To help organize an event in Latin America contact:
biodiversidad@laneta.apc.org and visit www.laneta.apc.org/biodiversidad.
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"the biotech companies that market GMO seed would like to see the grain marketing system totally taken over and "contaminated" by GMOs" - Dan MacGuire, Amercian Corn Growers Association

As rebellion grows against the global contamination of our food supply, 2 telling pieces on the power of American agribusiness to damage the interests of farmers both in the US and beyond:

1. In Corn's Cradle, [Subsidised] U.S. Imports Bury Family Farms
2. Farmer Choice -Customer First at the ACGA convention

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1. In Corn's Cradle, [subsidised] U.S. Imports Bury Family Farms

By TIM WEINER
New York Times, February 26, 2002

MANZANILLO, Mexico -- For many generations, corn has been the sacred center of civilization in Mexico, the place where the grain was first cultivated some 5,000 years ago.

Gods and goddesses of corn filled the dreams and visions of the great civilizations that rose and fell here before the Spaniards came five centuries ago. Today the corn tortilla is consumed at almost every meal. Among the poor, sometimes it is the entire meal.

But the modern world is closing in on the little patch of maize, known as the milpa, that has sustained millions of Mexicans through the centuries. The powerful force of American agribusiness, unleashed in Mexico by the North American Free Trade Agreement, may doom the growing of corn as a way of life for family farmers here, agronomists and economists say.

Lorenzo Rebollo, a 53-year-old dirt farmer, works two and a half acres of corn and beans here on the slopes of the eastern state of Michoacán, in Mexico's central highlands, where corn was first grown as a food crop, archaeologists say. Mr. Rebollo is one of about 3 million Mexicans who farm corn and support roughly 15 million family members.

His grown sons have left for the United States to make a living, and Mr. Rebollo says he may be the last man to farm this patch of earth. It is the same story all over Mexico: thousands of farmers pulling up stakes every year, heading for Mexico City or the United States. Some grew coffee or cut sugar cane. But most grew corn.

Roughly a quarter of the corn in Mexico is now imported from the United States. Men like Mr. Rebollo cannot compete against the mechanized, subsidized giants of American agriculture.

"Corn growing has basically collapsed in Mexico," Carlos Heredia Zubieta, an economist and a member of Mexico's Congress, said in a recent speech to an American audience. "The flood of imports of basic grains has ravaged the countryside, so the corn growers are here instead of working in the fields."

The facts are stark. Since Nafta took effect eight years ago, imports of corn to Mexico from the United States have increased nearly eighteenfold, according to the United States Department of Agriculture. The imports will probably keep growing for the next six years as the final phases of Nafta take effect.

In the United States, corn growers receive billions of dollars a year in subsidies from Congress, much of it going to huge agribusiness operations. That policy fuels huge surpluses and pushes corn prices down.

Free trade and Mexico's own farm policies "threaten the ability of Mexican farmers to continue to grow corn," said Alejandro Nadal, a professor at the Colegio de México and the author of a study on the issue.

In Mexico, Nafta did away with many traditional subsidies and generous price supports. Some contend it is doing away with small farmers. About 90 percent of Mexico's corn farmers work fields of five acres or less, and their survival instincts are driving them farther and farther up Mexico's mountainsides as they strive to grow enough to get by.

"We work the land all our lives," Mr. Rebollo said. "But the farmers are growing more and getting less."

Under a slowly lifting ceiling, the United States will be able to export all the corn it wants to Mexico, duty free, by 2008. Nafta's drafters told Mexico's farmers that as the ceiling lifted, the price of corn in Mexico would slowly fall toward United States and international prices over the 15-year period.

But instead, prices plunged quickly, converging with the free-market price by 1997. This was good news for big companies in Mexico importing corn for animal feed and processed food. But it was hard on the farmers, who have little political clout under the government of President Vicente Fox, an ardent free-trader.

The effect of American imports on Mexican agriculture was not unforeseen. "Integration into the global economy will also accelerate the social dislocation that rapid modernization inevitably brings to a developing economy," Bernard Aronson, a former assistant secretary of state for Latin American affairs, wrote eight years ago as the trade pact took effect.

But some things were not predicted. One unforeseen result of the collapse of corn farming, Mr. Nadal warns, will be the loss of genetically unique kinds of corn. As imports grow and farmers give up their fields, he said, ancient varieties like the succulent blue corn used for tortillas may be endangered. Some may already be lost, he said.

"If traditional growers abandon corn production -- as the Nafta strategy foresees -- then even more significant genetic erosion will occur," he said.

The importation of bioengineered corn from the United States is a separate but heated issue. Mexico's government does not permit the planting of genetically modified corn. But the new modified breeds can be imported as food or feed. The science journal Nature and Mexico's government published findings last year showing that bioengineered genes from American imports have invaded ancient varieties of corn in the state of Oaxaca.

Nafta has had demonstrable benefits for many sectors of the Mexican economy that have become competitive, and Mr. Fox says it is no longer possible for the government to step in and assist farmers.

State legislators who want Mexico to protect its corn the way Japan protects its rice have had no luck swaying him. Mr. Fox's agriculture minister, Javier Usabiaga -- a highly successful exporter known as the Garlic King in Guanajuato, his home state as well as Mr. Fox's -- says that a farmer who cannot survive in the 21st century is simply "going to have to find another job."

Farmers like Mr. Rebollo are regarded as artifacts of an earlier, simpler age. "I have this little bit of land, and I work it, and it's good hard work," he said as he walked his fallow field. "But I think when I go it will go too."

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2. Farmer Choice - Customer First when it comes to GM crops

Farm News from Cropchoice for American farmers
http://www.cropchoice.com
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(March 13, 2002 -- CropChoice news) --
Farmer Choice - Customer First
Presentation by Dan McGuire, Program Director To 2002 Annual Convention
of the American Corn Growers Association
March 9, 2002
Washington, DC

It's great to be here to report on our Farmer Choice - Customer First program at this important ACGA convention.  I want to begin by acknowledging the American Corn Growers Foundation for making this program possible.  I also want to acknowledge Farm Aid and thank them for their support as well.  A special thanks to Carolyn Mugar and everyone at Farm Aid.

Today I will cover the farmer choice issue along with the relationship and economic implications associated with GMOs and how they’re connected to U.S. farm and trade policy.  I will also address the question of how we need to be putting the customer first and the challenge that presents.

Genetically engineered or modified crops (GMOs as their known) have their supporters and cheerleaders as well as their opponents and detractors.  My primary role and that of this program is one of being a market analyst. Just as we are obliged to analyze and evaluate U.S. farm and trade policy, we are similarly required to evaluate genetically engineered crops as a market factor. Indeed, GMOs are tied in closely to U.S. trade policy. (GMOs) and their impact on grain markets will not go away any time soon. And it’s not just because there are confirmed export market losses and negative price impacts on farm level corn prices; or the fact that there are scientific and environmental questions involved; or because our competitors are seizing on our vulnerability on this issue to capture markets that could have meant more corn exports for the United States.

Those are all important market factors but the larger reason GMOs will continue to be a concern is that they embody so many major aspects related to agribusiness power in the marketplace.  They are, indeed, a "lightning rod" and represent a range of major concerns about the future structure of family farms and the farm economy.  GMOs, with their patents, technology agreements, terminator capability and potentially coercive production contracts epitomize the worst aspects of corporate agribusiness concentration.  Farm and commodity organizations that truly represent farmers have no choice but to address the economic impact that GMOs are having and will continue to have on increasing corporate concentration, reducing export markets and depressing grain prices.

As you know, the ACGA does not tell farmers that they should or should not plant genetically modified varieties of corn.  Nor do we advise farmers to plant conventional varieties.  Farmers have to make their own choice in that matter.  However, staying neutral on whether farmers chose or don’t chose to plant GMOs does not mean that we don’t have an obligation to constantly evaluate the impact that GMOs are having and the path that they lead farmers down.  Those issues were not created by us but are inherent in GMOs themselves and were brought to the marketing table by the biotech companies that put GMOs on the market.  We are simply responding to that reality and we don’t pull any punches in doing our market evaluation.  We must keep in mind that the vast majority of the U.S. corn crop is still made up of conventional corn varieties: about 80% of the 2001 corn crop was non-GMO.  So, that factor alone puts us in the position of knowing that the vast majority of ACGA members and all U.S. corn farmers are still planting non-GMO conventional varieties.

Since 1997, the ACGA has consistently brought the relevant issues involved with GMOs to the attention of our members and farmers in general.  The ACGA has taken the lead on researching the market impacts that GMOs are having with U.S. corn and processed corn product customers around the world.  Dealing with these market impact issues is essential given that farmers are living in a farm and trade policy environment that is supposedly "export and market oriented."  Farmers have been told since the 1980s that we have to be "competitive" in the global market.  They were told that price support loans had to lowered, eliminated or replaced by "marketing loans" and grain prices reduced and kept low to be "competitive" with other exporting countries.  Farmers were told to "add value" and be even more "competitive" by raising high quality and specialty commodities and if they would follow that advice the big multinational exporting companies could use that quality to capture more export sales and foreign markets by being "more competitive" and farmers would, in the end, benefit from a higher price - which has yet to materialize. NOTE:  U.S. corn exports are only averaging about 1.9 billion bushels, a far cry from what farmers were told to expect and half a billion bushels below the record of over 2.4 billion bushels in the early 1980s.  U.S. wheat export levels are an absolute disaster and forecast to be the lowest since 1971.  Again, U.S. wheat exports hit the record in the early 1980s at nearly 1.8 billion bushels. The point is that low price policy doesn’t increase exports and U.S. GMO policy will make that situation worse.

GMOs can play havoc on specialty commodities because of pollination drift and contamination as well as contamination of the seed supply. So, where does that leave the theory of "value added" exports if the integrity of those varieties can‚t be assured at a minimum threshold level to the buyer? This raises the question of whether conventional commodities and GMOs can realistically co-exist in the marketplace at all.  Can a segregated, identity-preserved system be maintained in order to hold on to customers?  Some of that is going on now but what happens as GMOs further contaminate the entire grain supply?  I’ll go into identity-preserved marketing more later.

Keep in mind that all of the "free market" rhetoric was pushed on farmers and the Congress by the various farm and commodity groups, grain companies and trade associations that want cheap grain and full production all the time and everywhere.  Of course full production does mean low grain prices.  It also means bigger profits for grain processors.

But, as we're all seeing so clearly, those policies do not work for farmers. They never will! Indeed, these policies don’t really benefit consumers either because cheap grain does not result in cheap food at the retail level. Consumer prices continue to go up.  There are those that these policies work very well for, however.  That would be the grain processors, exporters and mega livestock operations.  Never mind that those same policies have wrecked the public image of farm programs because low loan rates and cheap grain prices have led to the expensive farm program payments that we read and hear about every day.  Some of us realize that a strategic part of the agenda of the anti-farm program crowd all along has been to make farm programs so expensive they would become publicly unpopular and unsustainable in Congress. Those same groups attack farm programs by using the WTO to further erode the price impacting and orderly marketing tools that had been part of U.S. farm policy for most of the last century.  They're also trying to use the WTO to force their GMO policies on the importers and consumers of the world...hardly a "customer oriented" approach!

And, yes there is a direct relationship between GMOs and current U.S. farm policy.  One policy connection is that the same groups and companies that promoted current farm policy are pushing and indeed in many cases selling GMOs to farmers.  To the extent that GMOs may increase yields (in some cases) they add to inventories and help further depress already low grain prices, which has a negative farm income impact overall.  The higher priced GMO seed is also about farm income.  It‚s about biotech companies capturing a larger share of farm income through the higher production input costs that farmers pay for seed.  There are some recent credible reports, which confirm that reality. GMOs are also about farm income because the export markets that are lost as a result of GMOs cause even lower grain prices, further reducing farm income, while raising farm program expenditures.  Indeed, were it not for the LDP and other income support payments in the farm program that act as a kind of limited economic damage control system by somewhat offsetting low commodity prices, farmers would be feeling a much greater negative impact from the export sales lost as a result of GMOs.  Instead, they face that impact as well as the negative image of the more expensive farm programs.  Farmers are put in the position of having to defend federal farm program payments when what they really need and really want instead is a fair price from the market and the kind of proven price support farm policy that can make that happen. Of course, that might also involve planting fewer acres and the biotech companies are against that because it would mean they would sell fewer bags of high priced GMO seed varieties...another GMO/farm policy connection.

Ironically, the so-called "market and export oriented farm law" that we’re living under reveals the blatant inconsistency that GMO promoters have relative to that so-called "free market" approach of letting the buyer choose versus the policy they’re promoting for GMOs.  If their policies were consistent, they would be telling farmers not to grow GMO varieties unless foreign importers and consumers were requesting them to do so. Conversely, the biotech companies and other GMO cheerleaders take the opposite of a "market or export-oriented" approach.  They attack our valued foreign importers and overseas customers, and launch a campaign to enact a national U.S. policy that says we will force those buyers to accept GMOs whether they like it or not.  In other words, they want to mandate that buyers will accept GMOs.  Would we call that a "free market mandate?"  I guess maybe it’s a "mandatory biotech supply management program" meaning the biotech industry, with the support of the U.S. government is going to manage the supply of U.S. crops so we have mandatory GMO production and mandatory GMO exports.

Meanwhile, competitor exporting countries gear up their non-GMO production and their export infrastructure machinery to capture what had been U.S. customers and traditional U.S. markets.  Lets look at a few of the recent developments with foreign markets:

Feedstuffs reported this week that China cancelled 720,000 metric tons of corn imports and another 220,000 MT was cancelled by an "unknown" destination, generally considered to be code for China.  So, China has cancelled nearly 1 million metric tons of corn imports and is expected to actually re-enter the world market as a corn exporter.  China has large stocks of corn and other feed grains and is unlikely to meet (WTO) trade requirements anytime soon which is no surprise to many of us who warned that PNTR for China and China‚s entry into the WTO would not have the positive impact that the promoters of those two developments said would result for U.S. farmers.  And, even in the case of a U.S. commodity, soybeans, that China has imported a large quantity of, just look at current soybean prices that U.S. farmers receive.  They’re a disaster, so where’s the benefit to farmers?  Farmers aren’t exporters anyway,  except in a few instances.  Multinational grain companies do the exporting!

Look at China's policy on GMOs which have already reduced China’s soybean imports and put a billion dollars of trade on hold over the past couple of months.  That is a clear market impact directly related to GMOs.  And, for those who still believe the U.S. can tell the rest of the world what agricultural commodities they have to buy, China represents a kind of real world wake up call.  Europe and Japan are similar examples of wake up calls for the U.S. on this issue. The StarLink corn issue caused U.S. corn exports to Japan last year to drop 53 million bushels below the year before and current marketing year exports are below last year. The U.S. is basically shut out of supplying corn to Spain and Portugal while Argentina, Brazil and Hungary are meeting that demand.  GMOs have effectively blocked the U.S. from participating in that 2 million metric ton market. Leading Italian and French farm groups have called for an EU plan to increase non-GMO oilseed production as a means to reduce the EU’s dependence on genetically modified vegetable proteins from the United States.  The largest farm groups in both countries oppose the commercial planting of GM seed and have said that their plan for the EU is intended to reduce reliance on U.S. GMO soybeans and soybean meal.  Our competitors now have an opening that will play out against us well into for the future.

In Great Britain, seven of the top market chain stores representing one-third of the UK’s grocery retail share support a campaign to massively increase organic farming. Delvita, a large supermarket chain in Eastern Europe has started eliminating GM food products from its stores. South Korea, Taiwan and various other Asian markets are also restricting GMOs. Egyptian wheat buyers and consumers say that they do not want GMO wheat. Egypt is one of the largest importers of U.S. wheat and bought 3.5 million metric tons last year.  Some millers say that if one GMO grain in a thousand is detected, the wheat will be refused.

Wheat buyers in the Far East have similar reservations about GMO grain and European millers have described GMO wheat as a "market destructor." Traceability and labeling systems are being developed in Europe and other markets.  I expect a 1% tolerance level will be the end result. Feed manufacturers in Europe are requiring traceability and a the Food Standards Agency in the UK confirms that testing methods are able to identify very small amounts of GM material in some foods such as baked goods, including cakes, buns, bread and rolls.  As low as 1% of GM content of the soy ingredient can be detected even where the soy ingredient only represents 0.3% of the loaf of bread.

It’s important to note that the European Union is the largest market by far (82%) for U.S. corn gluten meal.  EU corn gluten imports from the U.S. were 4.4 MMT in MY 2000/01 compared to 5.5 MMT in MY 1995/96.  We have to be concerned about the export market for corn gluten as it is connected directly to our agenda of expanding industrial corn demand through more ethanol plants.  Corn gluten is a high value product resulting from some ethanol plants.

That’s a few examples and there are many more.  These are the serious market issues that our Farmer Choice - Customer First education and information program monitors, analyzes and continues to address.

Now, for the all important question of putting the customer first.  Will the U.S. grain production and marketing system rise to the occasion and supply what consumers want?  That is the challenge and I can say that a number of pieces of that puzzle are evolving which provides some positive news.

Identity-Preservation:  Last September, the growing trend of identity-preservation (IP) in food production was the subject of a workshop in Minneapolis, with USDA as one of the sponsors.  The vice president of grain operations for General Mills reported on their large IP system that currently tests about 2,000 wheat and oats varieties. General Mills reports that it has learned about IP costs, capabilities, responsibilities, testing and tolerances that work for growers and food manufacturers.  Of course, there are no GMO wheat and oats varieties on the market yet so we’ll see how their IP system works if that happens. An Iowa farmer participating in that conference said that the GMO cloud has a silver lining which is the IP marketing of non-GMO soybeans that earn her a steady market premium in Japan.  The question is how large will that market grow and can it be maintained?

A Cargill representative said that 3% of today’s export market is IP but predicts that it will grow to 30%. A University of Missouri economist estimated that IP costs range from .5% to 5% of the total value of the product.

Another panel at the meeting looked at GMO testing, including a representative of Strategic Diagnostics, a GMO test kit manufacturer.  I’m personally familiar with the SDI strip test for soybeans and have witnessed it used in export elevators loading non-GMO soybean cargoes.

Other developments are taking place within the grain marketing and regulatory system.  USDA is very active in GMO testing proficiency and performance evaluation of GMO tests.  USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA):

Recently began offering a Proficiency Program to organizations testing for GM grains and oilseeds to help identify areas of concern and then improve testing capability and reliability. Expanded its program to evaluate the performance of all strip tests to go beyond testing for the StarLink Cry9C protein. Effective February 7, 2002, GIPSA expanded the Rapid Test Kit Evaluation Program to include tests for all GM grains and oilseeds. GIPSA scientists review data packages submitted by manufacturers and if performance is confirmed they issue a Certificate of Performance to the manufacturer.  You can check for this information on the GIPSA biotechnology website.

One testing company, Eurofins, that markets GMO tests recently contacted me and sent me their literature.  They have a laboratory in Des Moines, Iowa and offer both the Real-Time Polymerase Chain Reaction (PCR) DNA detection test and the ELISA assay test.  They sent me copies of their brochures, which are available here for those interested.  I don’t know much at all about the company and I haven‚t checked to see if they are certified by GIPSA, but their literature shows some of the events that they test for in corn, soybeans, cotton, potatoes and tomatoes.

So, you can see that measures and systems are being put in place to facilitate the marketing of non-GMO commodities.  Will this be the new structure of grain marketing or not?  I ask that because I believe that the biotech companies that market GMO seed would like to see the grain marketing system totally taken over and "contaminated" by GMOs.  I expect they would see that as ending their problem.  The other direction we may see them go is to push the terminator technology as their answer to eliminating the issue of cross-pollination contamination.

Neither of those directions is market, customer or export oriented.  And denying farmers, grain buyers and consumers the choices they want is not putting the customer first.

Since our program by definition is Farmer Choice - Customer First I expect we will have some problems with those strategies and a number of challenges to deal with down the road.
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Other CropChoice headlines this week:
Cranberry growers shake-up industry;
http://www.cropchoice.com/leadstry.asp?RecID=621
Monsanto seeks approval for new Bt corn;
http://www.cropchoice.com/leadstry.asp?RecID=619
GMO developments in Asia;
http://www.cropchoice.com/leadstry.asp?RecID=617