Wednesday, July 27, 2011

Getting farmers to grow veggies not so easy

Nutrition activists have argued for some time that more farm subsidies should be going into fruits and vegetables rather than grain and cotton, the commodities that have long dominated the money. But it turns out that getting grain farmers to grow veggies instead is easier said than done, at least in the Midwest.

Farmers who get government payments for land that's traditionally grown corn, soybeans and other subsidized crops have long been barred from planting fruits and vegetables on that acreage. Existing fruit and vegetable growers in California and other states have insisted on that restriction. However, a special provision in the 2008 farm bill allowed some Midwest farmers to start switching some corn and soybean acreage to tomatoes and other vegetables destined for processing. As it turns out, only about 10,215 acres have been planted to vegetables, just 14 percent of the 75,000 acres allowed under the pilot program.

Many farmers already had land to grow vegetables on that wasn't subject to the subsidy restrictions, says Bruce Nelson, administrator of the Agriculture Department's Farm Service Agency. Another factor: Demand for processed vegetables is weak.

Some 155 farms participated in the pilot project. Eight-five percent of the farms and farmers were in just three states - Illinois, Indiana and Minnesota - out of seven that were eligible.

Iowa-Canada comparison illustrates U.S. productivity

Here's a fun fact, mostly because it illustrates the incredible productivity of American agriculture: Iowa alone produces far more grain than Canada, when measured in tons, and more soybeans than China, calculates economist Lester Brown of the Earth Policy Institute.

Over the last five years, Iowa has produced an average of 57 million tons a year to Canada's 49 million tons. Iowa's grain is all corn, Brown says. Canada's is all wheat, which is far less productive per acre. Iowa produces four tons of grain per acre, compared to 1.4 for Canada.

Iowa also produces almost as much soybeans as China does on less than half as much land, Brown says. Iowa produced 13 million tons of soybeans last year from 10 million acres. China produced 15 million tons on 22 million acres.

"Iowa is at the heart of the U.S. Corn Belt, a phenomenally productive piece of agricultural real estate. It enables the United States, with only 4 percent of the world's people to produce 40 percent of the world's corn and 35 percent of its soybeans," writes Brown.

Tuesday, July 26, 2011

Biofuel industry airs frustration with environmentalists

The biofuel industry got to air some of its frustrations with the environmental movement at an Energy Department biomass conference today. One of the sessions at the meeting featured a debate between Brooke Coleman, executive director of the Advanced Ethanol Council, and Nathanael Greene of the Natural Resources Defense Council. The Advanced Ethanol Council is an offshoot of the Renewable Fuels Association and represents companies that are trying to commercialize ethanol made from crop residue and other sources of biomass.

Coleman says environmentalists are making unreasonable demands on the ethanol in terms of performance standards and essentially providing cover for the oil industry and other opponents of the biofuel. "They're all thanking you for it," Coleman told Greene. Advanced ethanol companies already are struggling to get off the ground, and "it's almost like the environmental community is trying to make it worse," Coleman said.

As for Greene, he says that biofuel companies should expect to be held to higher environmental performance standards if they're going to ask the government for help in the form of usage mandates, subsidies and loan guarantees. "And don't whine about it when people say we want to measure that," he said.

"You need only look at what’s happened to the corn ethanol industry … to see what happens if you just bulldoze the public and use their money to support the industry," Greene said. 

What's happened to the corn ethanol industry, of course, is that it has lost a great deal of political support

as the price of corn has risen, pressuring food prices.

Deficit plans offer clues to ag cuts

Congress and the White House still seem far apart on an agreement to raise the debt ceiling, but some of the proposals that have come out may offer some clues as to how much spending will have to be cut in the next farm bill.

The Gang of Six plan called for $11 billion in cuts over 10 years. The proposal did not specify which programs should be targeted but did protect food stamps from cuts. Were the entire cut to come out of the $4.7 billion in direct annual payments that go to grain and cotton growers it would amount to about a 23 percent reduction. (In Iowa, the largest recipient of such subsidies, the typical direct payment averages around $30 an acre.) Now comes Senate Majority Leader Harry Reid's plan, which specifically would cut those direct payments by about 30 percent. The cut would be made by reducing the payment rate. Farmers are now paid on 85 percent of their base acreage. That would be reduced to 59 percent.

I wouldn't put too much stock in what programs these plans target, only the total reduction. Congress will have the last say on how the cut is distributed when the next farm bill is written, presumably in 2012. The chairman of the House Agriculture Committee, Frank Lucas, R-Okla., made clear at a hearing last week that he wants to look at food stamps for savings.

Another note: The Gang of Six plan has to be the high-water mark for what ag interests can expect to get in any deal, given that the Six include Sens. Kent Conrad, D-N.D., and Saxby Chambliss, D-Ga.

Wednesday, July 20, 2011

Threat to crop subsidies raises environmental concerns

 It’s an axiom among many critics of U.S. farm policy that crop subsidies to grain and cotton subsidies encourage practices that are bad for the environment.  What those critics may fail to realize is that producers who take that money have to comply with restrictions on how they farm environmentally sensitive land, such as slopes that are prone to erosion. End those subsidies, or cut them so much that farmers stop taking them, and those producers will be largely free to farm how they like at a time when high commodity prices are encouraging growers to plant fencerow to fencerow.

 With Congress likely to make deep cuts in farm spending as part of a deficit-reduction plan, there’s a chance that the $5 billion in fixed, annual direct payments to growers will be slashed or replaced altogether. Conservationists are worried about what that could mean for highly erodible cropland.

 “The end of direct payments would have a significant impact, a negative impact, on the compliance incentive,” USDA economist Roger Claassen said at a meeting this week of the Soil and Water Conservation Society.

 About 25 percent of cropland is subject to the restrictions. Farmers can meet the requirements in a number of ways, including reduced tillage and planting grass waterways, strips that trap water and sediment flowing from fields. 

 How much of a difference ending direct payments would have on erosion rates isn’t clear. Land that’s subject to those restrictions accounted for 25 percent of the reduction in soil erosion that took place between 1982 and 1997. (The restrictions were put in place in 1985.) But it’s not known exactly how much of the erosion reduction would have taken place anyway.

 One alternative under discussion is to make compliance with the conservation restrictions mandatory for farmers who buy federally subsidized crop insurance. There was just such a requirement from 1985 to 1996.

 The problem is that the farmers who are most dependent on crop insurance live in areas such as the Dakotas, and they are less likely to have problems with soil erosion than farmers in, say, Iowa, who have less need for crop insurance, as Claassen explains. Farmers who are the least dependent on crop insurance could theoretically be tempted to drop their coverage if they don’t want to be bothered with the farming restrictions. 

 The lesson for critics: Be careful what you wish for.

USDA struggles to finance next-gen biofuels

 The Obama administration’s effort to develop next-generation biofuels that will replace corn ethanol is still very much a work in progress. That’s evident from a summary provided to the House Agriculture Committee of a loan guarantee program authorized by the 2008 farm bill.

The USDA’s flagship project, the Range Fuels wood-to-ethanol plant in Georgia, ran into trouble almost immediately. Another project has been de-obligated because the lender no longer qualifies. Here is the summary of the projects:

-Range Fuels, Inc. (cellulosic ethanol) – $80 million guaranteed loan approved 1/16/09. Loan closed on 2/10/10. On January 3, 2011, Range Fuels failed to make the scheduled payment for principal and interest on the bonds. Range Fuels is current on deferred principal/interest only payments and working to find additional partners with capabilities of financial support. The Agency is reviewing a plan from the Lender outlining the potential transfer/sale.

-SoyMor Biodiesel, LLC (waste corn oil/distillers syrup from ethanol) - $25 million application approved on 6/10/09. On September 1, 2010, RD received letter from (American Bank) stating the lender no longer qualifies as an eligible lender, having fallen below the minimum acceptable levels of capital. SoyMor was unable to obtain a new lender. The $25 million was de-obligated.

-Sapphire Energy (algae to advanced aviation fuel) – $54.5 million guaranteed loan approved 12/03/2009. Agency continues to work with lender to close the loan..

-Freemont Community Digester (anaerobic digester/will process community waste, mostly food and beverage; has a contractual arrangement to sell waste CO2) -- $12.75 million loan guarantee approved 10/15/2010. Loan closed; Agency issued a loan note guarantee on Tuesday.

-Enerkem Corp. (Cellulosic Ethanol) – $80 million guaranteed loan approved 1/4/2011.

-INEOS New Planet BioEnergy, LLC (Cellulosic Ethanol) – $75 million guaranteed loan approved 1/4/2011. Agency continues to work with Lender to close the loan.

-Coskata, Inc. (Cellulosic Ethanol) – $87.85 million guaranteed loan approved 6/3/2011. Agency continues to work with Lender to close the loan. 

Monday, July 18, 2011

Guide offers climate advice to meat eaters

No. 2 in carbon footprint, guide says (USDA photo)

 Looking to reduce your carbon footprint? You may want to skip the lamb chop and cut back on the beef. The Environmental Working Group commissioned an assessment of the greenhouse gas emissions of meat and other protein sources and released its findings today.
 Lamb ranked by far the highest in greenhouse gas emissions, followed by beef and cheese. The key reason those are high is that they all come from ruminants that produce a lot of methane during digestion and in their manure.  Lamb ranks No. 1 because it produces the least amount of meat relative to its live weight.
 Lamb generates nearly 40 kilograms of carbon dioxide equivalents for every kilo consumed, giving it a 50 percent greater carbon footprint than beef.
 Beef generates more than 27 kilos of greenhouse gases per kilo consumed, twice the emissions of pork and nearly four times more than chicken.
 By comparison, eggs produce less than five kilos of emissions per kilo eaten. Lentils ranked lowest in emissions, with less than one kilo.
 The analysis, which was performed for EWG by an independent firm called CleanMetrics, attempted to account for everything from the fertilizer that went into growing the feed the animal ate to the methane it emitted, the fuel needed to get the product to market, and even the amount of each food that was typically wasted. Farmed salmon wound up ranking relatively high in part because a lot of the fish is thrown away, according to the report. Discarded food accounts for at least 20 percent of emissions associated with meat and dairy products, EWG said.
 The amount of meat that is wasted varies considerably, according to Agriculture Department data cited by the study. About 40 percent of fresh and frozen fish is discarded, compared to just 12 percent of chicken and 16 percent of beef and 31 percent of turkey.
 EWG’s Meat Eater’s Guide also evaluates the relative healthfulness of different protein sources based on their saturated fat content and other factors.
 “By eating and wasting less meat (especially red and processed meat) and cheese, you can simultaneously improve your health and reduce the climate and environmental impact of food production. And when you do choose to eat meat and cheese, go greener,” the guide says.