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Animal Agriculture; Brazil Cotton Case; Farm Bill; Sweetener Controversy; Climate Issues; Trade; Food Safety; and CFTC Issues

Animal Agriculture

Reuters writer Christopher Doering reported yesterday that, “An undercover investigation by the Humane Society of the United States [HSUS] of major U.S. egg producers showed ‘rampant abuse’ of hens, which the animal rights group said on Wednesday could prompt more consumers to embrace ‘cage-free’ methods of production.”

The article pointed out that, “The Humane Society has played an increasingly active role in pressuring industry in several states to end livestock practices it considers cruel.”

Mr. Doering noted that, “In the egg production probe, the group [HSUS] sent an investigator to facilities in Iowa owned by Rose Acre Farms and Rembrandt Enterprises, the nation’s second- and third-largest egg producers. There were about 10 million birds at the facilities that were investigated.”

“Rose Acre executive vice president Tony Wesner said in an interview his firm takes ‘animal welfare very seriously’ and has all employees, including the Humane Society worker, sign an agreement requiring them to report signs of animal abuse.

“‘Unfortunately that didn’t happen,’ he said, referring to the Humane Society employee. ‘We’ll just have to take this and look at it some more and deal with it.’”

P.J. Huffstutter reported yesterday at the Los Angeles Times Online that, “Since California voters passed Proposition 2 in 2008, Humane Society officials have ramped up their campaigns to alter state laws regarding animal welfare. They’re reaching out to young people, including a presentation at last month’s National 4-H Conference in Washington, where they encouraged teenage future farmers to treat livestock with respect.

The organization has also been buying chunks of stock in publicly traded food companies, in part to be able to introduce shareholder resolutions and pressure company executives to alter their purchasing decisions.

“The strategy has worked. Companies including Wendy’s, Sonic Corp. and the parent company of the IHOP and Applebee’s restaurant chains have all started shifting to using cage-free eggs, according to Humane Society officials. Wal-Mart Stores Inc., the nation’s largest grocer, said in February that the eggs sold under its store label were now cage-free.”

Yesterday’s article added that, “But the farmers are fighting back. In recent months, agribusiness lobbyists and farm groups have bombarded companies sympathetic to the Humane Society with letters asking them to halt donations to the group.

“‘HSUS seeks to remove meat from our dinner tables, leather goods from our closets, animals from zoos and circuses and eventually — pets from our families,’ Kansas Farm Bureau President Steve Baccus wrote in a letter to Bank of America Corp. posted on the bureau’s website. The Humane Society, he wrote, is ‘a powerful, well-funded activist organization pursuing what most reasonable observers would consider an extreme anti-animal agenda.’”

Dean Kleckner, former head of the American Farm Bureau, penned an opinion item regarding egg production that was posted yesterday at the Des Moines Register Online.

In part, Mr. Kleckner stated that, “The crusade against conventional eggs has made surprising advances in recent years. A growing number of restaurants now pledge to use only certain kinds of eggs. On March 22, Subway restaurants announced that they will begin phasing in the use of cage-free eggs as part of their new animal welfare policy. That announcement coincides with the national launch of their breakfast menu.

“The issue is starting to show up on election ballots as well: Seven states have passed restrictions on egg production.

“The assumption is that ‘cage-free’ chickens are somehow superior to ‘caged’ chickens – not from the standpoint of taste or nutrition, but ethics. It’s more humane, goes the thinking, to let cooped-up chickens mill around freely.”

The opinion item noted that, “The truth is more complicated. Arizona Republic columnist Linda Valdez visited an egg farm that uses cages. She confessed to thinking that she would see chickens treated ‘like cogs in an industrial machine.’ She discovered something different. She described a clean, efficient operation that produces good eggs at a reasonable price.

“Then she visited a ‘cage-free’ farm. ‘Layers of chicken excrement build up on the floor,’ she reported. This is what the eggs lay in until someone picks them up.”

Mr. Kleckner added that, “As it turns out, however, this ‘cage-free’ environment is no poultry paradise for the chickens, either. When chickens are crowded together, rather than separated into cages, they peck each other incessantly. It’s animal instinct – an avian attempt to establish a social hierarchy – a behavior we describe as a ‘pecking order.’

“The result isn’t pretty. ‘The cage-free block has twice the mortality rate,’ wrote Valdez. ‘Broken bones are common among the cage-free birds. If the block gets spooked, they pile up on one another, crushing those at the bottom.’

“Maybe ‘cage-free’ is best understood as a euphemism. Perhaps what we have here isn’t a debate between ‘caged’ and ‘cage-free’ chickens, but between ‘protected’ and ‘unprotected’ chickens.”

Brazil Cotton Case

The “Washington Insider” section of DTN indicated yesterday (link requires subscription) that, “In the back and forth over Brazil’s World Trade Organization complaint against U.S. cotton subsidies, this was the week when Brazil had planned to assess nearly $1 billion in trade retaliation against a list of more than 100 imports from the United States, as allowed under a ruling made last year. The sanctions were set to begin this week, but Brazil announced Monday it had received an offer from the United States and will delay the sanctions until April 22 while it studies the U.S. proposal, Brazilian trade officials said Monday.”

“Details about the U.S. offer are just beginning to emerge, but [Brazilian Foreign Trade Secretary Lytha Spindola] confirmed that the United States proposed a $147.3 million annual fund to compensate Brazilian cotton producers. The value was determined by the WTO as the amount of damages caused annually to Brazilian cotton producers by U.S. subsidies. In addition, the United States proposed to reduce the export credits offered to U.S. exporters under its GSM-102 credit guarantee program.”

The DTN update added that, “So, the cotton case negotiations appear to be playing out about as expected, although the producer compensation wrinkle is a surprise. With the highly contentious fall elections just over the horizon, the United States is in no position to change its commodity programs now, especially given the coalition politics behind each and every program. So, the administration is hoping to buy off the Brazilians with a temporary program to hold back the nearly $1 billion in retaliatory measures the Brazilians are threatening to impose on U.S. goods and services.

Thus, the United States could find itself in the very odd position of providing commodity supports to both to U.S. and Brazilian cotton producers, likely a very uncomfortable position.

“So, the eventual outcome of this case and these negotiations is still far from clear.”

Similarly, DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “Under the agreement, the United States will establish a fund of approximately $147.3 million per year to provide technical assistance and capacity building for the Brazilian cotton industry. The fund will continue until passage of the next farm bill or until a mutually agreed solution to the cotton case is reached, whichever is sooner.”

San Francisco Chronicle writer Carolyn Lochhead stated yesterday at the paper’s Politics Blog that, “So here’s the deal: to avoid retaliation by Brazil on U.S. exports of all kinds of things that have nothing to do with cotton, U.S. taxpayers — that’s you — will send the Brazilian cotton industry $147 million a year in aid.

“It apparently has not occurred to the Obama administration (remember all the indignant campaign talk about Washington lobbyists?) or Congress to simply end the subsidies.

So we will continue to subsidize U.S. cotton farmers AND now we’ll also be subsidizing Brazilian cotton farmers.”

And Environmental Working Group Senior Vice-President Craig Cox asked yesterday, “How is it possible that we can’t find money in the budget to meeting funding promises for conservation programs that protect our water and soil quality, but we can send $147 million a year in US taxpayer funds to subsidize Brazilian cotton farmers in order to keep the subsidy spigot open for US cotton farmers?”

With respect to conservation issues, USDA indicated in a news release from yesterday that, “[USDA] today announced the availability of approximately $25 million in fiscal year 2010 to fund projects designed to stimulate the development and adoption of innovative conservation approaches and technologies through its Conservation Innovation Grants (CIG) in fiscal year 2010.

“‘USDA’s investment in these grants will advance our goal of producing long-term dividends in environmental enhancement and protection,’ Agriculture Secretary Tom Vilsack said. ‘The grants will assist producers in using market-based approaches to conservation and innovative technologies that can put conservation on the land.’”

Farm Bill

In an update posted yesterday at the DTN Ag Policy Blog, Chris Clayton pointed to a news release issued yesterday by the Kansas Wheat Growers, which stated in part that, “The National Association of Wheat Growers has identified direct payments and a robust federally-subsidized crop insurance program as major priorities of the 2012 Farm Bill, and NAWG officers are already working with other commodity groups to outline a Farm Bill framework.”

“Senator Pat Roberts (R-Kan.) says [House Ag Committee Chairman Collin Peterson (D-Minn.)] may be gambling by opening up the 2012 Farm Bill discussions so soon. Roberts was the featured speaker at the March 31 gathering of the Kansas City Agribusiness Council.

“‘I think it’s too early to do this. You can look at it two ways. You can bring up the farm bill and say, ‘let’s get to work on it now and prevent bad things from happening,’ or you can bring it up and attract more attention and therefore, more people will get their knives out,’ says Roberts, who adds that the national media is always quick to target agriculture spending when studying ways to reduce federal spending. ‘They don’t realize the amount of cuts we’ve already gone through,’ he says. ‘I am not very optimistic in this climate of wanting to raise the farm bill up right now. Hearings are alright, but I don’t want to be a target.’”

On the issue of direct payments, Mr. Clayton also reminded readers yesterday in his blog update that, “Just last month Peterson told rice producers in Washington, D.C., that if the farm groups want him to do defend direct payments, he’ll do it.”

Sweetener Controversy

Reuters writer Rene Pastor reported yesterday that, “Sugar is being unfairly blamed for obesity problems in the United States at a time when per capita consumption of sweeteners has declined over the past decade, the head of an industry group complained on Wednesday.

“Andrew Briscoe, the president and chief executive of the Sugar Association Inc., told Reuters linking sugar to obesity is misleading because most of the sweeteners used in the beverage industry are from high fructose corn syrup (HFCS).”

The article stated that, “Briscoe said that according to data from the U.S. Agriculture Department and the Centers for Disease Control, U.S. per capital sugar consumption has fallen 40 percent since 1970.

“‘Sugar is not part of the problem,’ he said.”

Climate Issues

Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “Deere & Co. is coming under pressure to drop its support for legislation aimed at cutting greenhouse gas emissions. Two groups, FreedomWorks and the National Center for Public Policy Research announced today that they’re running ads in two cities with major Deere operations – Waterloo, Ia., and Moline, Ill. – aimed at generating complaints to company executives from their employees.

“Deere is part of a coalition called the Climate Action Partnership – DuPont, parent company of Pioneer Hi-Bred is another one – that has been backing climate legislation.

“The ads claim that a cap-and-trade system that the legislation would create to raise the cost of fossil fuels would eliminate many jobs. Viewers are urged to call John Deere’s compliance hotline.”

Reuters writer Alister Doyle, reported yesterday that, “Grazing by cows or sheep can cut emissions of nitrous oxide — a powerful greenhouse gas — in grasslands from China to the United States, according to a study that overturns past belief that farm animals stoke releases.

“Adding to understanding of links between agriculture and global warming, the report in Thursday’s edition of the journal Nature said livestock can help to limit microbes in the soil that generate the gas, also known as laughing gas.”

And Amy Harder reported yesterday at the National JournalOnline that, “Attorneys general from several coastal states are urging the three senators crafting a climate and energy bill to ensure it doesn’t block the EPA from regulating greenhouse gases.

“‘Abandonment of the existing federal authority, prior to having new federal authority in place and functional, would be imprudent given the magnitude, complexity and time sensitivity of global warming,’ the top legal officials of Massachusetts, California, Delaware, Maine, Rhode Island, Maryland and Vermont said in a letter this week. Their call comes after more than a dozen states mounted legal challenges seeking to stop the EPA from regulating emissions.”


A National Farmers Union (NFU) news release from yesterday stated that, “[NFU] President Roger Johnson participated in a press teleconference today on the importance of trade with Cuba. The call, organized by the Center for Democracy in the Americas, included Representative Jo Ann Emerson; Representative Marion Berry; Secretary John Block; Parr Rosson, Professor at the Department of Agricultural Economics at Texas A&M; and Johnson.”

Johnson expressed NFU’s support of the Travel Restriction Reform and Export Enhancement Act (H.R. 4645). This bi-partisan legislation is sponsored by House Agriculture Committee Chairman Collin Peterson and is co-sponsored by 30 other Members of Congress, including Representatives Jerry Moran of Kansas, Marion Berry of Arkansas, and Jo Ann Emerson of Missouri.”

Food Safety

A news release issued yesterday by Senator Tom Harkin (D-Iowa) stated in part that, “[Sen. Harkin] released the following statement today regarding a Department of Health and Human Services (HHS) Office of the Inspector General (OIG) report on the Food and Drug Administration’s (FDA) inspections of domestic food facilities.”

This new report shows what we have feared for too long: that that our domestic food facilities are not being adequately inspected and FDA needs additional authorities to keep the food on our tables safe. This is unacceptable in our modern society and an important reminder that we must provide FDA with the needed tools to properly inspect food facilities and effectively react to problems in order to ensure the safety of the food American families eat. Quite simply, picking up food at the grocery store should not be a health risk.”

CFTC Issues

Damian Paletta reported yesterday at The Wall Street Journal Online that, “Senior Obama administration officials Wednesday said they would fight efforts to broadly exempt companies and others that use derivatives contracts from having to abide by new trading restrictions.

“‘The idea that all end-users of derivatives somehow be absolved from having to clear their trades is something that we do not agree with… and we will fight hard to oppose,’ Treasury Department Deputy Secretary Neal Wolin said during a briefing with reporters.”

The article explained that, “At issue is how much these instruments are used as speculative investments and how much they are used by companies to simply hedge against the risk of fluctuations in commodity prices, interest rates or currency rates.

“Many companies say they use derivatives to hedge risk and shouldn’t be forced to post collateral against their trades.”

The Journal article pointed out that, “One reason the debate has become so complex is because two Senate committees are fighting for jurisdiction over the issue. The Senate Banking Committee has already advanced legislation to the Senate floor that would make it harder for end-users to be exempted from most trading requirements. The Senate Agriculture Committee is working on its own bill, which many expect will be better received by business groups.

“‘We are putting transparency at the forefront of what we’re trying to do,’ said Sen. Saxby Chambliss (R., Ga.), the ranking Republican on the agriculture panel. He said he was ‘very hopeful’ he could reach a deal with his Democrat counterpart, Sen. Blanche Lincoln of Arkansas.

“‘Timetable-wise, I don’t know whether it will be this week, next week, or the week after,’ he said in the interview.”

Keith Good