Food Matters

Something New, Something Better

2012-02-26T08:11:00.000-08:00

I did promise to try to be positive and constructive from time to time. Here's some very practical research being done in this region that could have very real benefits for the bottom lines of farmers, and the environment. It's a cliche, but this is win-win. This is from an article I wrote:

The Right Spray, the Right Amount, in the Right Place

In a perfect world, fruits, vegetables and grains wouldn’t need pesticides. This isn’t a perfect world, and even organic pesticides can cause unintended consequences. What if just the right amount of pesticide could be used, and even more importantly, just where it’s needed. That’s something that’s now possible.

Six years ago a small group at Oxford Frozen Foods were told by their boss, seventy-two year old John Bragg, to find some way to cut down on the company’s environmental footprint, in other words use less pesticides. The company farms over 12 thousand acres of wild blueberries, so the pesticide bill is pretty steep, but Gary Brown, a field manager with Oxford, says there was something else at work. “One of his (Bragg’s) favourite sayings is, you people are not farming for me, you’re farming for my grandchildren.”

The company past the challenge along to David Percival who heads up the Wild Blueberry Research Program at the Nova Scotia Agricultural College. They discovered that there is technology being used in the Florida citrus industry that offered exciting possibilities. This began a research collaboration between the University of Florida, and NSAC that has now led to a workable combination of conventional spray gear, and digital cameras linked to a cab computer and comptroller that can turn on just the needed spray nozzles, even just one, at just at the right time. “We can just apply the agrochemicals where they’re required in the field, we don’t have to do blanket applications, and overall that’s a reduction in the risk right there,” says David Percival.

Both David Percival and Gary Brown credit Dr. Qamar Zaman for moving the project ahead so quickly. Dr. Zaman, an agricultural engineer with training in Pakistan, and England, had experience, including in Florida, with what’s now being called “precision agriculture”. “We gave Dr. Zaman a real challenge” says Gary Brown. “Number one this has got to work, and number two it’s got to be user friendly because it’s going out into the farming community, and number three it’s got to be cost effective, it can’t be expensive equipment that the farmer can’t afford. He has accomplished all three.” Brown says everything but the software package and comptroller could be bought off the shelf at a good electronics store.

There are videos here http://nsac.ca/eng/staff/qzaman/videos/VR%20Sprayer%20-%20Herbicide.wmv that show different spray nozzles going on and off as the spray boom and tractor move along the field, applying the pesticide just where it’s needed. The software is sophisticated enough that it can distinguish between weeds and the main crop. “It can identify the weed by colour, it can identify the weed by height, or it can identify the weed by texture”, says Gary Brown. He has presented the research to the Canadian Horticulture Council which is made up of fruit and vegetable producers from across the country, and he says there’s a lot of interest.

NSAC has started the process of commercializing the technology. “Hopefully that’s something we will do through the coming year. With that being the case I would say the first generation of this should be available in two to three years” says David Percival.

Oxford Frozen Foods used the technology on some of its commercial blueberry fields last Fall to control weeds. Gary Brown says the savings in pesticide use and money were substantial. “We’ve been able to reduce our chemical use in some fields by as much as sixty percent.”

No one can say right now what farmers will have to pay in additional cost to purchase this technology for their spray gear, but some think it should be around seven thousand dollars. That would be a very quick pay back for a large operation using pesticides that are becoming increasingly expensive.

The technology is obviously most suitable for perennial crops like wild and high-bush blueberries, and other fruit trees, but David Percival says with its GPS capability it could be used to prevent any spraying in sensitive environmental areas on any farm. “It allows us to work in fail safes. For example if there is a watercourse in the area, we can build in that we need a buffer of so many meters” say David Percival.

“Precision agriculture” has always had the feel of expensive high technology to it, really only suitable for very large farming operations. The developers of this technology hope the savings it generates will more than offset the reasonable cost, and if it lessens the “environmental footprint” as well, then the benefits will be even greater.

Water in All the Wrong Places

2012-02-20T06:55:00.000-08:00

This really is ironic. When residents and businesses in Charlottetown turn on the tap they draw almost all the water from wells drilled into what's called the Winter River watershed, and it's a lot of water: 18 million liters a day (about 750 thousand two-fours of beer), the highest draw during August (probably drinking the most beer then too). The people who care about the environmental health of this watershed say it's too much. It's more than the sustainable re-charge (essentially rain that trickles through the sandstone into underground aquifers). In fact a section of the Winter River went dry last summer, killing fish, and sending an important warning.

And when it rains, something else happens too: Charlottetown's storm sewers send so much excess water to the waste treatment plant that raw sewage has to be dumped into Charlottetown harbour, shutting down shell fishing, and giving Charlottetown a black eye. The City of Charlottetown is now trying to deal with both issues.

Lessons? There are certainly some when it comes to sewage. In the 1970's when the communities surrounding Charlottetown like Parkdale, East and West Royalty etc, tied into the waste treatment plant on the waterfront a lot of money was saved by combining real sewage and storm drainage into one pipe from each community rather than two. Now millions more will have to be spent to separate storm run-off from sewage, something that could have been done properly in the first place.

The shellfish closures are the result of a change in policy by Fisheries and Oceans and Environment Canada, not really any increase in pollution or run-off from the plant. It's to protect U.S. markets for shellfish that the departments developed protocols to shut down harvesting when there's any risk of contamination. The departments do the same in several bays and estuaries. And Environment Canada was doing it's job when it ordered Charlottetown to fix the problem. It did the right thing.

Solving the supply of water is going to require more than just spending money. It's almost certain that Charlottetown will drill new wells on land its bought in Miltonvale Park. (Residents of Miltonvale Park have been warned that if Charlottetown does this it will draw a lot of water and limit the number of new home lots the community will be able to establish.) But even this new supply of water won't be enough to get the drawdown from the Winter River back to sustainable levels, and cope with any future growth. All this is happening as Stratford and Cornwall, the two fast growing communities on either side of Charlottetown face their own water supply challenges.

Basically it means residents and businesses will have to change the way they use water (conservation, what a concept). Water meters will be part of the mix. Any new homes being built now must have them installed, and everyone interested in this topic says they're coming. It's never easy when we're asked to think about the real cost of things that feel free (water, medical care, creative material on the web, etc.). Perhaps the more important consideration is how much we're wiling to pay for carbonated sugar water, fancy coffees, and hundreds of cable tv channels that offer so little worth watching. It seems sensible to price reasonable water use at a reasonable price, and then quickly increase the cost for residents and businesses using more. Residents may have to sweep their lane rather than use the hose. It'll be OK.

A tip of the hat to Summerside for encouraging people to use off-peak wind power to create and store heat during the night which can be released during the day. Any effort that can "store" renewable energy is very important.

Beavers and Buffers

2012-02-08T12:38:00.000-08:00

Trust me, this does relate to growing food, and no it has nothing to do with eating beavers.

Let's start with buffers. We began hearing about them in the late 1990's with the release of the Royal Commission on the Land. Buffers are a no-go area that were seen as a way to push back farming and forestry from waterways to slow down soil erosion and pesticide run-off. For many landowners buffers (first 10 now 15 meters) represent a loss of productive land, or trees that couldn't be cut. The distribution of waterways around the province means the impact of buffers is very uneven. Some farms have multiple streams running through them and considerable land has been lost. On other farms there is little impact.

On the surface buffers seemed like an easily understood and straightforward approach to protecting waterways, but it's been anything but. High priced lawyers have gone to court to make very technical arguments about the definition of a waterway, and where a buffer should be measured from. Rules over headlands were so complicated that a Department of Justice lawyer was seconded to the Environment Department to try to make sense of it all.

And now beavers have made all of this even more complicated. Beavers are native to PEI but other than trappers (and Richard Brown and his trunk load of dynamite-this was many, many years ago, and he certainly wasn't the only one), beavers have few natural predators. Beavers build dams to expand their territory by flooding land giving them easy access to food (willow and poplar). These wetlands can play a very useful role in the environment, as a water sponge, and filter, but most rural landowners would rather they set-up home on someone else's land. There is a season for trapping beavers, and, like coyotes, if landowners can prove a nuisance, trappers can get a permit to get rid of them.

This flooding certainly changes the "edge" of a waterway, and creates confusion over where a buffer should be measured from. Here's how a buffer zone would normally set-up:

Once beavers build dams, the stream rises, and the edge moves into the buffer, making the buffer appear to be too narrow. This continues to be an issue when wood cutters or farmers try to determine how close they can crop land or cut trees. in other words where does the buffer start.

If beavers have changed a waterway I think the buffer should be measured from wherever the water's edge is when the planting or cutting is taking place. If the reason for the buffer is to keep sediment and pesticides out of waterways, then that's what it should be allowed to do. Yes some kind of record with a picture or video should be taken to establish what was going on at the time, because the stream edge could well change again because of heavy rainfall or more beaver activity, or the dams disappearing.

I realize this is far from a perfect solution and that cutting trees and farming isn't always pretty, but we have to keep going back to the reason for buffers. They're not there to frustrate or bankrupt farmers and forest contractors, they're an imperfect way of finding some balance between resource extraction and protecting the environment. With government cutbacks, more and more of the regulating of buffer zones and wetlands is being pushed back on the private sector (after a day's training) and I'd like to think that this will be done responsibly. If it isn't there will be some kind of backlash. There's growing interest and involvement in watershed improvement groups, and that means more people paying attention to what's going on around waterways. (Full disclosure: I'm involved with the Montague and Valleyfield Watershed Enhancement Co-op and had some experience with buffer zone regulations and beavers which got me thinking about this.)

The bottom line for me is that some kind of common sense needs to prevail. I am eternally sympathetic to the challenges farmers and forest contractors face trying to make a living off the land, and the growing lack of understanding amongst Islanders about how difficult this is but I also get the feeling that when it comes to environmental regulations that there's a constant effort amongst some to push the limits, and then plead ignorance when caught. I want farmers and forest contractors to accept buffers as a part of the price for lower taxes, the growing support for local food, and having good neighbors. There is a lot of anxiety about the environment amongst many Islanders, and farmers and forest contractors need to take concrete steps to regain trust. Fighting to use every square inch and tree in what should be a buffer zone and then blaming beavers isn't the way to do that.

Google and Gzowski

2012-01-28T07:38:00.000-08:00

I can remember when Peter Gzowski first started using the internet a few years before he died. He was like a kid in a candy store. The idea that he could sit in a comfortable chair with a cigarette and coffee and have access to so much information was astounding to the journalist in him. I don't know what he'd think about what's going on now.

Gzowski was a rather grumpy man in person, but magic on the radio. He was one of the best interviewers I've ever heard. He was curious and knowledgeable about a lot of stuff, but I think he did two things that interviewers now could learn from. He didn't want a list of questions from his producers but instead would continually ask "Why are we talking to this person?" It was only when he was satisfied with the answer that he felt ready. And the second flowed from that, he would listen, listen, listen. Nothing is more important to doing a good interview.

I've no doubt if he were still with us, he'd be doing interviews on how naive we've been looking at the internet as a treasure drove of objective information. He'd recognize that the desire to make money would eventually throw us out of the information "Garden of Eden". (I'd bring the "apple of knowledge" into this, but I'm in enough allegorical trouble already).

This week the web's potential for good and evil was brought into sharp focus. In the U.S., lawmakers withdrew two controversial laws designed to update copywrite protections for the producers of creative material. Late this week issues around privacy, and the ability of google to collect huge amounts of information about our web preferences, dominated the news. Four interesting articles (imo) to share that touch on all of these issues. (you won't see Terence Corcoran featured here very often, but in the spirit of reading outside of your comfort zone, and confusing Google, here's one). This first one I think is particularly important.

http://cleantechnica.com/2011/10/31/how-google-is-making-the-climate-war-worse/

How Google is Making the Climate War Worse

I am a huge fan of Google. And the company has done far more than any other company to help solve the problems of climate change by investing in game-changing renewable innovation, and even providing an education on climate change, directly. However, it’s core mission – finding stuff for you – is turning out to hamper progress in a weird way.
Google tries very hard to please you by finding you more stuff just like the other stuff you clicked on last time. That is the essence of google’s great cleverness. But that very brilliance is becoming more and more damaging to the shared view out to an objective fact-based world.
Who hasn’t gotten exasperated with someone else’s ignorance about climate change? Haven’t you finally said: “look, you can just google it!”
But there turns out to be one big problem with just “googling” it. It depends on who you are.
So if last time you looked up climate change and chose to open something by, say, Marc Morano, then Senator Inhofe, and then the Drudge Report, which would all poo-poo climate change, google thinks, “oh, this moron likes denier news about climate change,” and next time, more of its top suggestions for your search will be skewed even further to the right.
As you keep heading further into la-la land, Google is there, holding your hand, assuring you that indeed, this is the objective, google-able truth. Two people with different search histories get two entirely different sets of google “facts” for the identical search terms.
The problem is that science-based types, who click on the fact-laden science-based pdfs from the EPA and reports from the WRI and studies from NOAA – and then get more of these kinds of results; assume that’s what everyone sees when they just “google” it, but there is no one objective science-based google.
Google has become like a good but unobtrusive butler, that always obsequiously aims to please, by always giving you more and more of what you liked last time. Ultimately, as a result, we are now all living in what we believe to be the objective, self-evidently google-able truth. And we are not.
Climate scientists keep turning out more and better climate science, and scratch their heads at the apparent lack of effect on “rational” hearts and minds, but it is simply not being found by the other side, because googling it turns up the opposition. While scientists wring their hands over the problem that they are not communicating well enough, there is nothing they can do differently.
Together with the outright (deliberate) propaganda by the 1% against the 99%, Google’s (accidental) amplification of that propaganda, a mere accident of our technological history, is fueling part of the rage of this internet age. The civil war on science it amplifies – even by accident – is a danger to our survival, as it saps our commitment to change before it’s too late.

http://opinion.financialpost.com/2012/01/27/terence-corcoran-the-internets-collectivist-blarney/

The Internet’s collectivist blarney
Jan. 27, 2012

Terence Corcoran Jan 27, 2012

The copyright war is a corporate battle, not a fight for freedom

The collapse of two U.S. online anti-piracy bills continues to generate triumphalism within the Internet Liberation Party. It is now entrenched mythology that the voice of the people, expressed through the Internet, last week gunned down million-dollar Hollywood lobby campaigns and saved the Internet for freedom, democracy and the right to endless zero-cost downloads of Avatar and The Dark Knight.

The story line goes like this: All the “old media” spending by industry in support of the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA) proved useless in the face of the new era. “A new and profoundly different political force has emerged in the last few months, a constituency that identifies itself not by local interests but as citizens of the Internet,” wrote Larry Downes in Forbes.

Scores of similar comments are all over cyberspace. The SOPA-killers are millions of Americans caught up in a “newfound civic energy,” said Lorelie Kelly, director the New Strategic Security Inititive, writing in Huffington Post Friday. The ability to shape legislation through the push of a button on their computer represents “rewiring the Town Square to enable continual, sustained participation in our own self-governance.”

Before this revolutionary fervour goes too far — and the Internet is nothing if not a institution that wants to go too far —there are a couple of problems, practical and ideological, with the mythology. First, despite the claims to novelty and precedent, the anti-SOPA activists proved nothing more than that it is still possible to mobilize a mob with collectivist blarney. A second related issue is the degree to which the mobilization of the mob was carefully orchestrated by a cabal of tech corporations led by Google with a vested interest in keeping the Internet free of the constraints of copyright for their own benefit and at the expense of trade, commerce, creativity and the rights of others.

All of this and more can be found in a new book by Robert Levine, provocatively titled Free Ride: How Digital Parasites are Destroying the Culture Business, and How the Culture Business Can Fight Back. (See excerpt here.) Free Ride should be must reading for all creators of cultural property, including newspaper owners, and for all the scoffers who write letters to the editor ridiculing the idea that we are in the midst of a total war on copyright. It’s the Occupy movement plundering the Internet.

War brings destruction, which is what Mr. Levine — a former executive editor of Billboard magazine — documents in his book. From filmmakers to the music industry to journalism providers and beyond, the official and unofficial rejection of copyright as a legitimate claim to ownership threatens to turn markets and commerce, the backbone of cultural economic activity, into chaos.

As Mr. Levine outlines in detail in Free Ride, the ideological cover for the anti-copyright movement is created and funded by the tech industries with household names that are at the heart of the Internet, especially Google.

Google’s backing can be found behind a host of celebrity Net activists and high-sounding institutions. In a chapter titled “Geeks Bearing Gifts: Google’s War on Copyright,” Mr. Levine follows the money and Google to Lawrence Lessig’s Creative Commons and scores of foundations and think-tanks, not to mention the candidacy of Barack Obama’s 2008 run for the presidency.

Throughout Free Ride, Mr. Levine homes in on what he refers to as “Silicon Valley libertarianism that rejects any form of Internet regulation — except, in most cases, when it happens to help the technology business itself.” But the net-neutrality libertarianism here is not the brand that puts much stock in markets and individual rights. “In the world of net neutrality, everyone works for the benefit of all, and individual rights mostly just get in the way. This fits with the trend toward deconstruction, which has made academics ever more skeptical of the Romantic ideal of individual genius. All artists build on the work of others, just as programmers combine existing bits of code.”

Put another way, the overriding idea behind the open Internet is that “if we all create culture, why should any one person own it?” Mr. Mr. Levine is no corporate shill. In an interview, he described himself as a “centrist Democrat” who is “actually pretty progressive.” In fact, he sees copyright “as a progressive notion.” So when venture-capital firms and high-tech giants line up against copyright, he sees a corporate assault on a progressive structure that protects the rights of creators and enhances the operation of a market for culture products.

For the moment, the anti-copyright ideologues have the mob in their pockets. Mr. Levine says one way to change the debate is to reframe the issue. This is not Hollywood culture industries against the public interest, nor is it the tech industries against the public good. “This is the entertainment business versus the technology business,” both of which are in the business of maximizing value for their shareholders. “When people look at Google they see a benevolent force and when they look at Universal they see a malevolent force.” To change the public debate, said Mr. Levine, we need to see that reality. “That’s why I wrote Free Ride.”

http://motherjones.com/kevin-drum/2012/01/end-privacy-google

The End of Privacy
by Kevin Drum

A few days ago Google announced a new privacy policy: If you're signed into any Google service, the information that Google collects from you can be combined with information from every other Google service to build a gigantic profile of your activities and preferences. On Tuesday I wrote that I was pretty unhappy about this, and a lot of people wanted to know why. After all, Google says this new policy will mean a better computing experience for everyone:

Our recently launched personal search feature is a good example of the cool things Google can do when we combine information across products. Our search box now gives you great answers not just from the web, but your personal stuff too…But there's so much more that Google can do to help you by sharing more of your information with…well, you. We can make search better—figuring out what you really mean when you type in Apple, Jaguar or Pink. We can provide more relevant ads too. For example, it's January, but maybe you're not a gym person, so fitness ads aren't that useful to you. We can provide reminders that you're going to be late for a meeting based on your location, your calendar and an understanding of what the traffic is like that day.

So what's my problem? Easy. In that mass of good news, the real reason for Google's announcement was stuffed quietly into the middle: "We can provide more relevant ads too."

This is so obvious that no one even paid attention to it. Of course Google wants to target its ads better. That's where most of its revenue comes from. Yawn.

So again: What's my problem? Why do I care if Google serves up ads that are a little more suited to my tastes? The truth is that I don't. What I do care about, though, is the obvious corollary: Google's main purpose in life, as you'd expect from any big, public company, is making money. And the way they make money is by helping third parties sell you stuff. Here, then, is the nut of the thing, from the same blog post announcing the new privacy policy:

Finally, what we're not changing. We remain committed to data liberation, so if you want to take your information elsewhere you can. We don't sell your personal information, nor do we share it externally without your permission…

Do you find that reassuring? I decidedly don't. If Google can change its privacy policy today, it can change it tomorrow. And it will. No company is an unstoppable juggernaut forever, and Google is already showing signs of becoming an ordinary corporation that has to scrap for profits just like everyone else. This is what's motivating their policy change this week, and someday it's likely to motivate them to sell my personal information after all.

It won't be mandatory, of course. If I want to close my Google accounts, they'll let me. But if I use an Android smartphone—and this is plainly one of the primary targets of Google's new policy—that will be pretty hard. And after years of using Google products like Gmail and YouTube, it's not as easy as it sounds to simply export all your data and move to a new platform. In reality, very few people will do this. Google is counting on the fact that they'll grumble a bit, like I'm doing, and then get on with their lives.

And maybe I should too. That's certainly the primary advice I got after writing Tuesday's post. Perhaps, as David Brin has been telling us for years, traditional notions of privacy are going away whether we like it or not, so we might as well like it. Complaining about it won't do us any more good than complaining about the end of transatlantic ocean liners or old-time radio shows.

And yet…I'm just not there yet. It's bad enough that Google can build up a massive and—if we're honest, slightly scary—profile of my activities, but it will be a lot worse when Google and Facebook and Procter & Gamble all get together to merge these profiles into a single uber-database and then sell it off for a fee to anyone with a product to hawk. Or any government agency that thinks this kind of information might be pretty handy.

So that's why I'm unhappy. I don't believe for a second that Google's policy against selling personal information will last forever. Maybe I should just relax and accept that this is the direction the world is going, but for now I think I'll continue to fight it.

http://pogue.blogs.nytimes.com/2012/01/19/put-down-the-pitchforks-on-sopa/?scp=1&sq=pogue%20sopa&st=cse

David Pogue
Put Down the Pitchforks on SOPA

By now, you’ve probably heard of the Stop Online Piracy Act (SOPA) and the Protect I.P. Act (PIPA). These are anti-piracy bills that had been making their way through the House and Senate, respectively. (and have now been withdrawn-I.P.)

You might have been made aware of these proposed bills Wednesday, when Wikipedia and other Web sites “went dark” in protest. (Google covered up its logo with a big black rectangle, as though censored.)

I’ve been watching these doings with fascination. One reason: it’s the first time so many big Web sites have banded together for a political action.

But I’ve also been a little alarmed. Of the millions joining in outraged protests, I’ll bet that only a few have actually read the proposed bills. Everyone else is, no doubt, swept away by the Web sites’ shock language. These bills, say the opponents, will allow Hollywood to censor free speech, kill innovation, and “fatally damage the free and open Internet,” as Wikipedia put it. Light the torches! Grab the pitchforks!

In a perverse stroke of curiosity, I thought maybe I’d actually study these bills.

Nobody’s disputing that these bills have been put together by the entertainment industries — movies, TV, music. The bills are intended to address their chronic frustration: that most of the piracy sites, which make movies, TV, music and book files available free, are overseas. Even though they get more visits than Google or Wikipedia, American laws can’t touch them.

The SOPA and PIPA bills would try to shut down these overseas piracy sites by exerting leverage on companies here in the United States, where they do have jurisdiction.

For example, they’d force American service providers to block the domain names (for example, “piracy.com”) of overseas piracy sites. They’d allow the government to sue American sites like Google and Facebook, and even blogs, to remove links to the piracy sites. And they’d give the government the right to cut off the piracy sites’ funding; they could force forcing American payment companies (like PayPal) and advertisers to cut off the foreign accounts.

The outrage reminds me of the controversy over global warming. Yes, there are climate-change deniers. But nobody seems to notice that they’re in two totally different camps, making totally different arguments. Some people deny that there’s been any climate change at all. Others acknowledge the climate change, but deny that people have anything to do with it. These two categories of people actually aren’t on the same side at all.

In SOPA’s case, too, there are two groups. Some people are O.K. with the goals of the bills, acknowledging that software piracy is out of control; they object only to the bills’ approaches. If the entertainment industry’s legal arm gets out of control, they say, they could deem almost anything to be a piracy site. YouTube could be one, because lots of videos include bits of TV shows and copyrighted music. Facebook could be one, because people often link to copyrighted videos and songs. Google and Bing would be responsible for removing every link to a questionable Web site. Just a gigantic headache.

But there’s another group of people with a different agenda: They don’t even agree with the bills’ purpose. They don’t want their free movies taken away. A good number of them believe that free music and movies are their natural-born rights. They don’t want the big evil government taking away their free fun.

For the record, I think the movie companies have approached the digital age with almost slack-jawed idiocy. The rules for watching online movies from authorized sites are absurd (24 hours to finish the movie? Have they never heard of bedtime?). And there are plenty of movies, even big ones, that you can’t rent or stream online at all. (The original “Star Wars” trilogy, the first three “Indiana Jones” movies, and hundreds of others.)

It should occur to these movie studios that if you don’t give people a legal way to buy what they want, they’ll find another way to get it.

At the same time, what the piracy sites are doing doesn’t seem quite fair, either. Yes, it’s a quirk of the Internet that you can duplicate something infinitely and distribute it at no cost. But that doesn’t make it O.K. to shoplift, especially when the stolen goods are for sale at a reasonable price from legitimate sources. Yes, even if the company you’re robbing is huge, profitable and led by idiots.

In this case, the solution is to work on the language of the bills to rule out the sorts of abuses that the big Web sites fear. (And to fix the other minor point, which is that the bills won’t work. For example, they’d make American Internet companies block your access to domain names like “piracy.com,” but you’d still be able to get to them by typing their underlying numerical Internet addresses, like 197.12.34.56. In other words, anybody with any modicum of technical skills would easily sidestep the barriers.)

As it turns out, that’s exactly what’s happening. Dozens of members of Congress, and the White House itself, have dropped support of the bills; their sponsors are considering big changes to the proposals. (They might look, for starters, at the suggestions in Wednesday’s Times editorial: “The legislation could be further amended to narrow the definition of criminality and clarify that it is only aimed at foreign sites. And it could tighten guarantees of due process. Private parties must first get a court order to block business with a Web site they deem infringing on their copyrights.”)

In other words, the protests were effective. There’s no chance that the bills will become law in their current forms.

But it was a sloppy success; the scare language used by some of the Web sites was just as flawed as the Congressional language that they opposed. (I actually have sympathy — just a tiny bit — for the music business’s frustration. It was put nicely by Cary Sherman, chief executive of the Recording Industry Association of America: “It’s very difficult to counter the misinformation when the disseminators also own the platform.”)

Finally, not enough people have acknowledged that the opposition was arguing two totally different different points — the “you’re going about it the wrong way” group and the “we want our illegal movies!” group.

In the new world of Internet versus government, the system worked; the people spoke, government listened, and that’s good. But let’s do it responsibly, people. Both sides have an obligation to do the right thing.

Mashed Potatoes

2012-01-22T10:47:00.000-08:00

This will read as criticism, but it really isn't. I have many scars from thirty years of covering primary industries like farming and fishing FOR a general audience. The mix of competing interests and messages, trying to determine what a story is and how to make it compelling, all conspire at times to hide what's really going on.

I was always guilty (and continue to be ) of paying too much attention to the interests of primary producers. My reasoning is that they matter in a province like PEI, and that virtually everywhere else in the media, from advertising to current affairs shows, and certainly the news, urban consumers are the audience everyone is broadcasting too. Think of CBC buying the digital network Country Canada, and then turning it into Bold, an arts and culture channel. Think of how Radio Noons across the country have disappeared replaced with phone-in shows. Given the demographic changes in Canada, these are smart programming decisions. I stubbornly tried to fight the tide, and usually lost. No right or wrong here, just differences of opinion.

So think back to this weeks story about potato supplies on PEI. "PEI Facing Potato Shortage" was the headline that ended up in newspapers, radio and television newscasts across the country. The first sentence in most of the print stories anyway was "Although store shelves are still full..... " So let's look at what's really going on here:
1. The potato harvest is smaller than a year ago when there was a bumper crop, and, fortunately, huge export sales to Russia which suffered a drought.
2. Potatoes are being shipped more quickly than last year.
3. Potato supplies are low in many other areas.
4. Prices are certainly profitable to farmers right now, but not gold-plated.

The information came out of an industry gathering near Charlottetown hosted by the United Potato Growers of Canada, and included industry and marketing experts from across North America.

Here's where messaging, and who that message is intended for, makes the story a little more complicated. The job of United Potato Growers is to make sure that farmers are getting the best possible price. It sounds simple and straightforward, but it's not. By law United can't set the price , it can only provide information, and try to persuade the players in the marketing chain that prices should be higher, and that's a tough job. There are many, many sellers on PEI and elsewhere, and very few buyers. A handful of wholesalers and retailers dominate the food business (think Loblaws amd Sobeys) and they have access to produce from virtually everywhere. They see their job as putting good quality produce on the shelves at the cheapest price. This works well for consumers, not so much for producers, but that's my my bias showing again.

What's really at play is a kind of psychological warfare: once one of the hundreds of potato sellers agrees to a price, then everyone else is expected to match it, and it's hard to say no to sale. Producers constantly live with the anxirety that they won't sell their potatoes and will end up feeding them to cattle in the Spring. And it's THESE producer/dealers that the United officials were really trying to talk to this past week: "There's no over supply, don't worry about moving your crop,and make sure you're getting as much money as possible" Industry watchers know this kind of market situation doesn't come along very often, and farmers can't squander it.

So it was really more of a pep talk to farmers, than a warning to consumers. Sobeys has just run a sale on potatoes and it was able to strong arm enough farmers to agree to take a lower price DESPITE the market conditions. That's what United is trying to stop.

The irony in all of this of course is that most consumers would hardly notice the difference paying one or two dollars more for a bag of potatoes, but it's a world of difference at the farm gate. The big food retailers have become used to setting prices based on their needs (marketing flyers to get people into the stores), and they have enough economic power to get their way most of the time. United is saying this is a moment when farmers can and should ask for more.

So if you're a consumer, don't worry there will always be potatoes on the shelves at reasonable prices. New potatoes from Florida will be coming soon (that will cost you I agree). To my friends in the media whatever story I would have done on this would have probably missed the point too: "PEI Facing Potato Shortage" is just too good a headline to pass up, and my explanation wouldn't have been as much fun. I'd probably have concluded that everyone who wants to buy potatoes is getting them, farmers are making some money, so really there's just the right amount.

Changing the Rules

2012-01-15T15:11:00.000-08:00

Doing some paid work (9-5) so haven't tended the blog as much as I should.

Through last week we saw/read a lot about hearings on the Northern Gateway Pipeline. The National Energy Board will spend months considering the merits of a costly venture to use a a pipeline to bring Alberta oilsand's bitumen to a new marine terminal in Kitimat B.C., and then onto tankers for shipment to Asia. Opponents say the pipeline and tankers go through some of the most pristine and precious natural areas left in Canada, and the risk of a catastrophic spill is just too great. Proponents naturally talk about the jobs and economic opportunities, along with the importance of finding new markets for oilsand's crude.

I was also pursuing another set of hearings with its own environmental risks, the spill of heavy water at the Point Lepreau nuclear facility, and the discovery during hearings by the Canadian Nuclear Safety Commission that "old, heavily tritiated" heavy water is being reused at the plant. Gordon Edwards of the Canadian Coalition for Nuclear Responsibility says this is just a cost cutting measure by N.B. Power and unnecessarily puts plant workers, and even the public at risk.(see the last two posts)

It took Paul Wells of Macleans to pull these two stories together. It turns out that slowly over the last few years the Conservative Government has been shifting responsibility for environmental assessment away from the government agency set up to do this ( the Canadian Environmental Assessment Agency) to groups many think are just too close to industry. Here's Well's take:

http://www2.macleans.ca/2012/01/09/joe-oliver-vs-the-radicals-or-among-them/#more-232571

Joe Oliver vs. the radicals, or among them
by Paul Wells

The Natural Resources Department was always where you worked if you thought environmentalists were a bunch of kooks. In the late 1990s, when the world was young and Kyoto was fresh and new, Natural Resources used to leak like a firehose right into the notebook of a colleague of mine at the National Post. Herb Dhaliwal, then the minister in charge, made a great show of driving an SUV the size of a hockey rink.

But the leaks were always anonymous and Herb’s SUV was a bit of an inside joke. Times change, and now we have Joe Oliver, who’s written (well, whose signature appears under) an open letter as significant in the annals of Conservative government as the ones Stéphane Dion used to write for Jean Chrétien.

There’s nothing subtle about it.

There are two main points to Oliver’s letter. First, the diversifying-energy-export notion the Prime Minister was so big on in his year-end interviews.

Remember that battle in the early years of this government over whether China should be embraced or shunned? Roughly, the fight between David Emerson and Jason Kenney? Over. Done. Kenney, who is not used to losing in today’s Ottawa, lost big.

But there’s more (in the letter):

This is just a hunch, but I suspect the next massive round of Conservative Party advertising won’t be aimed against an opposition party. This is the sound the Harper machine makes when it’s gearing up for a big fight.

This has been coming for a while. The 2010 Throne Speech promised to “untangle the daunting maze of regulations that needlessly complicates project approvals.” That year’s budget said: “Responsibility for conducting environmental assessments for energy projects will be delegated from the Canadian Environmental Assessment Agency to the National Energy Board and the Canadian Nuclear Safety Commission for projects falling under their respective areas of expertise.” The oil industry couldn’t have been happier. But until now there’s been no follow-up.

Note the change in tone employed, one measure of the distance between a minority and a majority government. In 2010, the Harper government was laying down markers deliberately, but not rushing, not kicking up a fuss. That’s changed.

Elizabeth May, the Green Party leader, really didn’t like Oliver’s letter. Oliver almost immediately moderated his tone in spoken remarks. No matter. This letter, certainly vetted by the PMO if it didn’t originate there, is the script for what comes next. It ends: “It is an urgent matter of Canada’s national interest.”

More on Used Heavy Water and Tritium

2012-01-10T10:39:00.000-08:00

Here's a link to an interview with Gordon Edwards who heads up the Canadian Coalition for Nuclear Responsibility. He says measuring heavy water leaks in litres is silly, it's the amount of radioactive tritium in the water that really matters. And he has important information on why NOT replacing the heavy water at the point lepreau station (see last two posts) puts plant workers at least, if not the public, at risk.

Here's the interview:
http://www.box.com/s/4m90ayvx540puxc201p9

More on Lepreau

2012-01-09T12:01:00.000-08:00

A good look at the Point Lepreau issues in the last post from Robert Jones at CBC Saint John.

http://www.cbc.ca/informationmorningsaintjohn/2012/01/09/three-incidents-at-lepreau-raise-concerns/

Conflicted Over Nukes

2012-01-08T10:27:00.000-08:00

From the '60's through to the '90's it was almost a no-brainer to be opposed to nuclear energy. The real and cultural fallout from Three Mile Island, Chernobyl, the movie The China Syndrome, all cemented the idea that this was bad stuff. Climate change has forced many to re-think. Smart (IMO) commentators who care about the environment like Stewart Brand and the U.K. Guardian's George Monbiot have written persuasively that we may not like nuclear energy, but when the alternative is burning coal, and all of the C02 belching that goes with it, the nuclear option is far superior. Even the Fukushima disaster last Spring in Japan hasn't shaken Monbiot's resolve.

From http://www.monbiot.com/2011/08/08/the-moral-case-for-nuclear-power/

"In last week’s New Scientist, David Strahan points out that Germany’s decision to shut its nuclear plants will, despite its massive investment in new renewables, create an extra 300 million tonnes of carbon dioxide between now and 2020. That will cancel out almost all the savings (335Mt) brought about in the entire European Union by the new Energy Efficiency Directive.

In June, Angela Merkel announced that she would bridge the generation gap caused by shutting down nuclear plants by doubling the volume of coal-fired power stations Germany will build over the next ten years. Outrageously, her government will help pay for them with a fund originally intended to reduce greenhouse gas emissions. This shows what a fix you can get yourself into when getting rid of nuclear power takes precedence over dealing with climate change."

There are pocketbook issues as well for homeowners and businesses in the Maritimes. Other than some small amounts of hydro generation in New Brunswick when rivers are running high (usually just in the Spring, but this past year generation has carried on through most of the year), power from the Point Lepreau nuclear generating station in New Brunswick is by far the cheapest available. Lepreau of course is three years and counting late in a major refurbishment, and more than a billion dollars over budget. On top of that here on PEI it's costing Maritime Electric ratepayers almost 2 million dollars a month to replace the electricity it used to get from Lepreau. Government officials hope the Federal government will agree to cover these added costs, but that seems increasingly unlikely now that it's found a private sector buyer (Quebec's SNC Lavelin) for AECL, the former crown corporation in charge of designing and building nuclear plants. If and when Island ratepayers start to payoff this growing liability (about $65 Million right now) , they will be in for a nasty surprise. See more here:
http://foodmatters-petrie.blogspot.com/2011/06/politics-and-power-electric-stuff.html

Whatever we think of nuclear, given the time and money already invested in refurbishing Point Lepreau, it will likely be up and running in the next year, and a week ago I would have said that's a good thing. I still think it's a better alternative than burning coal, but a couple of sources of information dug up by Kip Smith, a man with an inquiring, and tenacious mind when it comes to things environmental and corporate, has got me thinking again.

One was a hearing on that small spill of radioactive heavy water at Point Lepreau during December. The Canadian Nuclear Safety Commission is the federal agency that oversees the country's reactors and it held a hearing into the spill in mid December. There was more information on the spill just today (Sunday, Jan 8,2012):

Damaged pump diaphragm caused heavy water spill at N.B.'s Point Lepreau nuclear plant

The Canadian Press

Officials at New Brunswick Power have pegged a damaged pump diaphragm as the culprit of a recent radioactive heavy water spill at the Point Lepreau nuclear power plant.

Staff were evacuated from the plant in mid-December after four to six litres of the heavy water spilled from a monitoring equipment.

Officials say the moderator system at the plant, located in Lepreau near Saint John, will be reloaded with heavy water over the next few days.
The heavy-water system was being refilled at the time of the spill as part of the utility’s plan to restart the generating station after it was refurbished.
The plant’s restoration is three years behind schedule and $1-billion over the original $1.4-billion budget.
NB Power says there were no health concerns for workers or the public and officials will continue to investigate the incident."

This is how we'd like to think of this story: a faulty piece of equipment, no human error, no harm done. Listening to the hearing itself (which does require some patience) there were a couple of unsettling disclosures. One was that the plant is re-using heavy water, which caught the chair of the commission Michael Binder unawares:

From the hearing:

http://www.nuclearsafety.gc.ca/eng/commission/webcasts/2011/december-15-2011-commission-public-meeting.cfm

"Sorry, just to piggyback,
let me understand, are they not going to use fresh heavy
water, are they using old heavy water? I mean, I thought
this whole plant is being refurbished. Why do they still
have old heavy water?
DR. RZENTKOWSKI: Yes, they are using the
old heavy water which was stored before the refurbishment
started. There is no tritium removal facility at the
Point 1 Lepreau site.
THE CHAIRMAN: So they’re using old heavy
water; is that ---
DR. RZENTKOWSKI: That’s correct. Because
in the overall risk assessment, which was conducted by
Point Lepreau before this decision has been made, it was
concluded that it’s safer to reuse the old heavy water
instead of transporting the heavy water, most likely to
Ontario, for tritium removal and then transporting this
back. So the risk associated with radiation exposure
would be definitely higher.
THE CHAIRMAN: Is it safer or cheaper?
DR. RZENTKOWSKI: That’s an interesting
question, but I can only confirm that the risk assessment
has been done.
THE CHAIRMAN: NB Power, do you want to
comment?
MR. THOMPSON: For the record, Paul
Thompson, Nuclear Safety and Reg Affairs Manager.
We looked into the aspects of the best way
to go. We did -- looked at all the various options; have
concluded that the risks were very manageable. We’ve
performed a formal benefit cost approach on this and
demonstrated that we can manage the additional challenges
that are posed by reusing the water.

And there are other challenges in shipping
that amount of water offsite, so it was a matter of
balancing the various challenges that we have. We
concluded that it is manageable and we’ve got the
appropriate procedures in place, as is demonstrated by
this particular event.
THE CHAIRMAN: Okay. Thank you."

And Chair Binder was also concerned that there WAS a leak at all (a small one thankfully) even though all of the equipment was supposed to have been thoroughly tested:

"Just an observation. Since
this plant is almost finished refurbishing, it's a bit
unsettling to hear about hydrazine and heavy water leak
one after another.
So that's the discomfort level that we all
feel about this and hopefully the root cause will deal
with some of those issues.
DR. RZENTKOWSKI: I would only like to
mention, I am not going to defend New Brunswick Power by
any means, that those activities are non-routine
activities conducted during the return to service.
So some mistakes may happen, and I was glad
to see that they responded properly and they minimized any
consequences on workers and the environment.
THE CHAIRMAN: NB Power, last word?
MR. KENNEDY: Yes, Mr. Chair. For the
record, it's Blair Kennedy.
Just to emphasize that NB Power, Point
Lepreau generating station, take these events very
seriously and we will be looking into these issues and we
have -- we consider these to be low-level events from a
point of view at the Point Lepreau generating station.
But you can rest assured that safety and
quality is foremost in our mind at Point Lepreau
generating station.
THE CHAIRMAN: Okay. Thank you. Thank you
very much."

Here's the thing about nuclear energy: as taxpayers and citizens we put a lot of money and faith in the technology and competency of the people in charge of these reactors. I wanted a little more than boilerplate assurances from the NB Power operators, and I still don't know from the hearing whether old heavy water is being used for cost or safety reasons. (I'll keep trying to find out).

All of this was bad enough until I saw another unsettling article today (Sunday January 8, 2012) that questions many of the risk assumptions the nuclear industry and the media have been operating on for decades. Some of this is heavy going, but the conclusions are very troubling.

http://www.truth-out.org/science-skew-nuclear-power-industry-after-chernobyl-and-fukushima/1325956958

Science with a Skew: The Nuclear Power Industry After Chernobyl and Fukushima

by: Gayle Greene, The Asia-Pacific Journal | News Analysis

It is one of the marvels of our time that the nuclear industry managed to resurrect itself from its ruins at the end of the last century, when it crumbled under its costs, inefficiencies, and mega-accidents. Chernobyl released hundreds of times the radioactivity of the Hiroshima and Nagasaki bombs combined, contaminating more than 40% of Europe and the entire Northern Hemisphere. But along came the nuclear lobby to breathe new life into the industry, passing off as “clean” this energy source that polluted half the globe. The “fresh look at nuclear”—in the words of a New York Times makeover piece (May 13, 2006)—paved the way to a “nuclear Renaissance” in the United States that Fukushima has by no means brought to a halt.
That mainstream media have been powerful advocates for nuclear power comes as no surprise. “The media are saturated with a skilled, intensive, and effective advocacy campaign by the nuclear industry, resulting in disinformation” and “wholly counterfactual accounts…widely believed by otherwise sensible people,” states the 2010-2011 World Nuclear Industry Status Report by Worldwatch Institute. What is less well understood is the nature of the “evidence” that gives the nuclear industry its mandate, Cold War science which, with its reassurances about low-dose radiation risk, is being used to quiet alarms about Fukushima and to stonewall new evidence that would call a halt to the industry.
Consider these damage control pieces from major media:
~~ The “miniscule quantities” of radiation in the radioactive plume spreading across the U.S. pose “no health hazard,” assures the Department of Energy (William Broad, “Radiation over U.S. is Harmless, Officials Say,” NYT, March 22, 2011).
~~ “The risk of cancer is quite low, lower than what the public might expect,” explains Evan Douple, head of the Radiation Effects Research Foundation (RERF), which has studied the A-bomb survivors and found that “at very low doses, the risk was also very low” (Denise Grady, “Radiation is everywhere, but how to rate harm?” NYT, April 5, 2011).
~~ An NPR story a few days after the Daiichi reactors destabilized quotes this same Evan Douple saying that radiation levels around the plant “should be reassuring. At these levels so far I don’t think a study would be able to measure that there would be any health effects, even in the future.” (“Early radiation data from near plant ease health fears,” Richard Knox and Andrew Prince,” March 18, 2011) The NPR story, like Grady’s piece (above), stresses that the Radiation Effects Research Foundation has had six decades experience studying the health effects of radiation, so it ought to know.
~~ British journalist George Monbiot, environmentalist turned nuclear advocate, in a much publicized debate with Helen Caldicott on television and in the Guardian, refers to the RERF data as “scientific consensus,” citing, again, their reassurances that low dose radiation incurs low cancer risk. Everyone knows that radiation at high dose is harmful, but the Hiroshima studies reassure that risk diminishes as dose diminishes until it becomes negligible. This is a necessary belief if the nuclear industry is to exist, because reactors release radioactive emissions not only in accidents, but in their routine, day-to-day operations and in the waste they produce. If low-dose radiation is not negligible, workers in the industry are at risk, as are people who live in the vicinity of reactors or accidents—as is all life on this planet . The waste produced by reactors does not “dilute and disperse” and disappear, as industry advocates would have us believe, but is blown by the winds, carried by the tides, seeps into earth and groundwater, and makes its way into the food chain and into us, adding to the sum total of cancers and birth defects throughout the world. Its legacy is for longer than civilization has existed; plutonium, with its half life of 24,000 years, is, in human terms, forever.
What is this Radiation Effects Research Foundation, and on what “science” does it base its reassuring claims?

The Atomic Bomb Casualty Commission (ABCC), as it was originally called, began its studies of the survivors five years after the bombings.    (It was renamed the Radiation Effects Research Foundation in the mid seventies, to get the “atomic bomb” out, at around the same time the Atomic Energy Commission (AEC) was renamed the Department of Energy (DOE). Japan, which has the distinction of being twice nuked, first as our wartime enemy then in 2011 as our ally and the recipient of our GE reactors, has also been the population most closely studied for radiation-related effects, for the Hiroshima and Nagasaki bombings created a large, ready-made population of radiation-exposed humans. “Ah, but the Americans—they are wonderful,” exclaimed Japan’s radiation expert Tsuzuki Masao, who lamented that he’d had only rabbits to work on: “It has remained for them to conduct the human experiment!”
The ABCC studied but did not treat radiation effects, and many survivors
were reluctant to identify themselves as survivors, having no wish to bare their health problems to US investigators and become mired in bureaucracy and social stigma. But sufficient numbers did voluntarily come forth to make this the largest—and longest—study of radiation-related health effects ever. No medical study has had such resources lavished on it, teams of scientists, state of the art equipment: this was Atomic Energy Commission (AEC) funding. Since it is assumed in epidemiology that the larger the sample, the greater the statistical accuracy, there has been a tendency to accept these data as the gold standard of radiation risk.
The Japanese physicians and scientists who’d been on the scene told horrific stories of people who’d seemed unharmed, but then began bleeding from ears, nose, and throat, hair falling out by the handful, bluish spots appearing on the skin, muscles contracting, leaving limbs and hands deformed.   When they tried to publish their observations, they were ordered to hand over their reports to   US authorities. Throughout the occupation years (1945-52) Japanese medical journals were heavily censored on nuclear matters. In late 1945, US Army surgeons issued a statement that all people expected to die from the radiation effects of the bomb had already died and no further physiological effects due to radiation were expected. When Tokyo radio announced that even people who entered the cities after the bombings were dying of mysterious causes and decried the weapons as “illegal” and “inhumane,” American officials dismissed these allegations as Japanese propaganda.
The issue of radiation poisoning was particularly sensitive, since it carried a taint of banned weaponry, like poison gas. The A-bomb was not “an inhumane weapon,” declared General Leslie Groves, who had headed the Manhattan project. The first western scientists allowed in to the devastated cities were under military escort, ordered in by Groves. The first western journalists allowed in were similarly under military escort. Australian journalist Wilfred Burchett, who managed to get in to Hiroshima on his own, got a story out to a British paper, describing people who were dying “mysteriously and horribly” from “an unknown something which I can only describe as the atomic plague… dying at the rate of 100 a day,” General MacArthur ordered him out of Japan; his camera, with film shot in Hiroshima, mysteriously disappeared.
“No Radioactivity in Hiroshima Ruin,” proclaimed a New York Times headline, Sept 13, 1945. “Survey Rules out Nagasaki Dangers,” stated another headline: “Radioactivity after atomic bomb is only 1000th of that from luminous dial watch,” Oct 7, 1945.   There were powerful political incentives to downplay radiation risk. As State Department Attorney William H. Taft asserted, the “mistaken impression” that low-level radiation is hazardous has the “potential to be seriously damaging to every aspect of the Department of Defense’s nuclear weapons and nuclear propulsion programs…it could impact the civilian nuclear industry… and it could raise questions regarding the use of radioactive substances in medical diagnosis and treatment.”   A pamphlet issued by the Atomic Energy Commission in 1953 “insisted that low-level exposure to radiation ‘can be continued indefinitely without any detectable bodily change.’” The AEC was paying the salaries of the ABCC scientists and monitoring them “closely—some felt too closely,” writes Susan Lindee in Suffering Made Real, which documents the political pressures that shaped radiation science. (Other good sources on the making of this science are Sue Rabbit Roff’s Hotspots, Monica Braw’s The Atomic Bomb Suppressed, and Robert Lifton and Greg Mitchell’s, Hiroshima in America). The New York Times “joined the government in suppressing information on the radiation sickness of survivors” and consistently downplayed or omitted radioactivity from its reportage, as Beverly Ann Deepe Keever demonstrates in The New York Times and the Bomb. Keever, a veteran journalist herself, writes that “from the dawn of the atomic-bomb age,…the Times almost single-handedly shaped the news of this epoch and helped birth the acceptance of the most destructive force ever created,” aiding the “Cold War cover-up” in minimizing and denying the health and environmental consequences of the a-bomb and its testing.
The Atomic Bomb Casualty Commission scientists calculated that by 1950, when the commission began its investigations, the death rate from all causes except cancer had returned to “normal” and the cancer deaths were too few to cause alarm.

“It’s nonsense, it’s rubbish!” protested epidemiologist Dr. Alice Stewart, an early critic—and victim—of the Hiroshima studies. Stewart discovered, in 1956, that x-raying pregnant women doubled the chance of a childhood cancer: this put her on a collision course with ABCC/RERF data, which found no excess of cancer in children exposed in utero to the blasts. Nobody in the 1950s wanted to hear that a fraction of the radiation dose “known” to be safe could kill a child. During the Cold War, officials were assuring us we could survive all-out nuclear war by ducking and covering under desks and the U.S. and U.K. governments were pouring lavish subsidies into “the friendly atom.” Stewart was defunded and defamed.
She persisted in her criticisms of the Hiroshima data which were repeatedly invoked to discredit her findings, pointing out that there was no way the survivors could have returned to “normal” a mere five years after the atomic blasts. This was not a normal or representative population: it was a population of healthy survivors, since the weakest had died off.   Her studies of childhood cancer had found that children incubating cancer became 300 times more infection sensitive than normal children. Children so immune-compromised would not have survived the harsh winters that followed the bombings, when food and water were contaminated, medical services ground to a halt, and antibiotics were scarce—but their deaths would not have been recorded as radiation-related cancer deaths.   Nor would the numerous stillbirths, spontaneous abortions, and miscarriages (known effects of radiation exposure) have been so recorded.   Stewart maintained that were many more deaths from radiation exposure than official figures indicated.
Besides, the survivors had been exposed to a single, external blast of radiation, often at very high dose (depending on their distance from the bombs), rather than the long, slow, low-dose exposure that is experienced by people living near reactors or workers in the nuclear industry.   Stewart’s studies of the Hanford nuclear workers were turning up cancer at doses “known to be too low” to produce cancer, too low as defined by the Hiroshima data: “This is the population you ought to be studying to find out the effects of low-dose radiation,” she maintained, not only because the workers have been subjected to the kind of exposure more likely to be experienced by downwinders to reactors and accidents, but also because records were kept of their exposures (the nuclear industry requires such records).
In the Hiroshima and Nagasaki studies, by contrast radiation exposure was estimated on the flimsiest of guesswork. The radiation emitted by the bombs was calculated according to tests done in the Nevada desert and was recalculated several times in subsequent decades. Researchers asked such questions as, where were you standing in relation to the blast, what was between you and it, what had you had for breakfast that morning, assuming that the survivors would give reliable accounts five years after the event.
“Bible arithmetic!” Stewart called the Hiroshima data: “it has skewed subsequent calculations about the cancer effect of radiation, and not only the cancer effect, but many other effects –immune system damage, lowered resistance to disease, infection, heart disease, genetic damage. These are serious misrepresentations because they suggest it’s safe to increase levels of background radiation.”    In fact, as the Hiroshima studies went on, they turned up numerous radiation effects besides cancer—cardiovascular and gastrointestinal damage, eye diseases, and other health problems—which bore out her prediction.    Stewart was also proved right on the issue of fetal X-rays, though it took her two decades to convince official bodies to recommend against the practice, during which time doctors went right on X-raying pregnant women.   It took her another two decades to build a case strong enough to persuade the US government, in 1999, to grant compensation to nuclear workers for cancer incurred on the job. (It helps, in this area, to be long-lived, as she commented wryly).
Twice, she has demonstrated that radiation exposures assumed “too low” to be dangerous carry high risk—two major blows at the Hiroshima data.
Yet this 60-year old RERF data set continues to be invoked to dismiss new evidence—evidence of cancer clusters in the vicinity of nuclear reactors and findings from Chernobyl.

More than 40 studies have turned up clusters of childhood leukemia in the vicinity of nuclear facilities, reckons Ian Fairlie, an independent consultant on radioactivity in the environment and a former member of the Committee Examining Radiation Risks of Internal Emitters (an investigatory commission established by the U.K. government but disbanded in 2004). Fairlie describes this as a “mass of evidence difficult to contradict”—yet it continues to be contradicted, on the basis of the Hiroshima studies.   Generally when a cancer cluster is detected in the neighborhood of a reactor, the matter gets referred to a government committee that dismisses the findings on the grounds that radioactive emissions from facilities are “too low” to produce a cancer effect—“too low, according to RERF risk estimates.
But in 2007, something extraordinary happened, when a government-appointed committee formed in response to the pressure of concerned citizens turned up increased rates of childhood leukemia in the vicinity of all 16 nuclear power plants in Germany.   The Kinderkrebs in der Umgebung von Kernkraftwerken study, known by its acronym KiKK, was a large, well-designed study with a case-control format (1592 cancer cases and 4735 controls).     The investigators—who were not opposed to nuclear power—anticipated they’d find “no effect... on the basis of the usual models for the effects of low levels of radiation.” But they found, to their surprise, that children who lived less than 5 km from a plant were more than twice as likely to develop leukemia as children who lived more than 5 km away.   This was inexplicable within current models of estimating radiation risk: emissions would have had to have been orders of magnitude higher than those released by the power stations to account for the rise in leukemia. So the investigators concluded that the rise in leukemia couldn’t have been caused by radiation.
The findings are not inexplicable, explains Fairlie, when you understand that the data on which risk is calculated, the Hiroshima studies, are “unsatisfactory.” Fairlie’s criticism of these data echoes Stewart’s: “risk estimates from an instantaneous external blast of high energy neutrons and gamma rays are not really applicable to the chronic, slow, internal exposures from the low-range alpha and beta radiation from most environmental releases.” (my emphasis) Fairlie points out a further problem with the Hiroshima data: its failure to take into account the dangers of internal radiation. As Sawada Shoji, emeritus professor of physics at Nagoya University and a Hiroshima survivor, confirms, the Hiroshima studies never looked at fallout: they looked at “gamma rays and neutrons emitted within a minute of the explosion,” but did not consider the effects of residual radiation over time, effects from inhalation or ingestion that “are more severe.” The distinction between external and internal radiation is important to keep clear. A bomb blast gives off radiation in the form of high-energy subatomic particles and materials that remain as fallout in the form of radioactive elements such as strontium 90 and cesium. Most of this is likely to remain on the ground, where it will radiate the body from without, but some may be ingested or inhaled and lodge in a lung or other organ, where it will continue to emit radioactivity at close range. Nuclear proponents cite background radiation to argue that low-dose radiation is relatively harmless, asserting (as Monbiot argued against Caldicott) that we’re daily exposed to background radiation and survive. But this argument misses the fact that background radiation is from an external source and so is a more finite exposure than radioactive substances ingested or inhaled, which go on irradiating tissues, “giving very high doses to small volumes of cells,” as Helen Caldicott says.   (Caldicott explains, when physicists talk about “permissible doses,” “[t]hey consistently ignore internal emitters — radioactive elements from nuclear power plants or weapons tests that are ingested or inhaled into the body,… They focus instead on generally less harmful external radiation from sources outside the body.” )
The KiKK study “commands attention,” Fairlie insists. But it got no mention in mainstream media in the U.S. or the U.K.—until The Guardian, in early May of 2011, gave this spin to it: “Plants have been cleared of causing childhood cancers,” declared the headline. “Government’s advisory committee says it is time to look elsewhere for causes of leukaemia clusters.”   What “elsewhere,” what other causes are cited for cancer clusters in the vicinity of reactors? Infection, a virus, a mosquito, socioeconomics, chance say the experts quoted in The Guardian.   The U.K. government is now moving ahead with plans to build eight new reactors.
When new evidence comes into conflict with old models, reinvoke the old models rather than looking at the new evidence.   The world is flat. So is it flat in Chernobyl.

“There is no evidence of a major public health impact attributable to radiation exposure two decades after the accident at Chernobyl,” announced the New York Times, a few days after the Fukushima reactors began to destabilize (Denise Grady, “Precautions should limit health problems from nuclear plant’s radiation,” March 15, 2011) The Times bases this claim on a 2005 World Health Organization (WHO) study that found “minimal health effects” and estimated that only 4000 deaths “will probably be attributable to the accident ultimately.” The worst effect of the accident is a “paralyzing fatalism,” an expert tells the Times, which leads people to “drug and alcohol use, and unprotected sex and unemployment” (Elisabeth Rosenthal, “Experts find reduced effects of Chernobyl,”Sept 6, 2005). “Radiophobia,” this is called—an attitude problem.
The Times did not mention that the International Atomic Energy Agency (IAEA), which is mandated with the promotion of nuclear energy, has an agreement with WHO that gives it final say over what it reports, an entangling alliance much decried by independent scientists. Nor did it mention two other studies that came out in 2006, “The Other Report on Chernobyl” and “The Chernobyl Catastrophe” by Greenpeace, both of which gave much higher casualty estimates than the widely publicized WHO/IAEA report. Nor did it breathe a word about Chernobyl: Consequences of the Catastrophe for People and the Environment, by Alexey Yablokov et al., translated into English and published by the New York Academy of Sciences in 2009—which estimates casualties at 985,000, orders of magnitude more than the WHO/IAEA report.
Yablokov et al. draw on “data generated by many thousands of scientists, doctors, and other experts who directly observed the suffering of millions affected by radioactive fallout in Belarus, Ukraine, and Russia,” and incorporate more than 5000 studies, mostly in Slavic languages (compared with the 350 mentioned in the 2005 report, most of which were in English). The authors are impeccably credentialed: Dr. Alexey Yablokov was environmental advisor to Yeltsin and Gorbachev; Dr. Vassily Nesterenko was former director of the Institute of Nuclear Energy in Belarus. Nesterenko, together with Andrei Sakharov, founded the independent Belarusian Institute of Radiation Safety BELRAD, which studies –as well as treats—the Chernobyl children. When he died in 2008 as a result of radiation exposure incurred flying over the burning reactor (which gave us the only measurement of radionuclides released by the accident), his son Dr. Alexey Nesterenko, third author of this study, took over as director and senior scientist at BELRAD. Dr. Janette Sherman, consulting editor, is a physician and toxicologist.
Comparing contaminated areas of Belarus, Ukraine, and Russia with the so-called “clean areas,” the studies document significant increases in morbidity and mortality in contaminated regions: not only more cancer, especially thyroid cancer, but a wide array of noncancer effects — ulcers, chronic pulmonary diseases, diabetes mellitus, eye problems, severe mental retardation in children, and a higher incidence and greater severity of infectious and viral diseases. Every system in the body is adversely affected: cardiovascular, reproductive, neurological, hormonal, respiratory, gastrointestinal, musculoskeletal, and immune systems. The children are not thriving: “Prior to 1985 more than 80% of children in the Chernobyl territories of Belarus, Ukraine, and European Russia were healthy; today fewer than 20% are well.”   In animals, too, there are “significant increases in morbidity and mortality… increased occurrence of tumor and immunodeficiencies, decreased life expectancy, early aging, changes in blood and the circulatory system, malformations.”
Parallels between Chernobyl and Hiroshima are striking: data collection was delayed, information withheld, reports of on-the-spot observers were discounted, independent scientists were denied access “The USSR authorities officially forbade doctors from connecting diseases with radiation and, like the Japanese experience, all data were classified.”    With the “liquidators,” as they’re called, the 830,000 men and women conscripted from all over the Soviet Union to put out the fire, deactivate the reactor, and clean up the sites, “It was officially forbidden to associate the diseases they were suffering from with radiation.” “The official secrecy that the USSR imposed on Chernobyl’s public health data the first days after the meltdown… continued for more than three years,” during which time “secrecy was the norm not only in the USSR, but in other countries as well.”
But the parallels are political, not biological, for the Hiroshima data have proven to be an “outdated” and useless model, as Stewart said, for predicting health effects from low-dose, chronic radiation exposure over time.    The Hiroshima studies find little genetic damage in the survivors, yet Yablokov et al. document that “Wherever there was Chernobyl radioactive contamination, there was an increase in the number of children with hereditary anomalies and congenital malformations. These included previously rare multiple structural impairments of the limbs, head, and body,” devastating birth defects, especially in the children of the liquidators. The correlation with radioactive exposure is so pronounced as to be “no longer an assumption, but…proven,” write the authors. As in humans, so in every species studied, “gene pools of living creatures are actively transforming, with unpredictable consequences”: “It appears that [Chernobyl’s irradiation] has awakened genes that have been silent over a long evolutionary time.”    The damage will play out for generations — “at least seven generations.”
Such findings have provided radiation experts a chance to reexamine their hypotheses and theories about radiation effects, observes Mikhail Malko, a researcher at the Joint Institute of Power and Nuclear Research in Belarus. But rather than using new evidence to enlarge their understanding, experts have found ways of dismissing these studies as “unscientific”: they are said to be observational rather than properly controlled, “Eastern European” and not up to Western scientific protocols, and inconsistent with the hallowed Hiroshima data.
Radiation scientists denied that the thyroid cancer that increased exponentially after the accident could be a consequence of radiation: it manifested in only three years, whereas it had taken ten years to appear in Hiroshima, and it took a more aggressive form. They explained the increase in terms of improved screening, iodine substances used to treat the children, or pesticides—even though epidemiological studies kept turning up a link with radiation contamination. Finally in 2005, a case-control study headed by Elisabeth Cardis confirmed a dose-response relationship between radiation and thyroid cancer in children in terms that had to be acknowledged.
Chernobyl does not usually provide the kind of neat laboratory conditions that allow such precise dose-response calculations. But neither did Hiroshima, where radiation exposure was guesstimated years after the fact and recalculated several times according to new findings. Yet scientists have accepted the Hiroshima uncertainties –all too readily— and have allowed this data to shape policy affecting all life on this planet, while citing the less-than-ideal conditions for studying Chernobyl as an excuse to ignore or discredit these findings, dismissing them according to a model more questionable than the data they’re discounting. The Chernobyl effects demonstrate that “Even the smallest excess of radiation over that of natural background will statistically…affect the health of exposed individuals or their descendants, sooner or later.” But as with Stewart’s findings about fetal x-rays and nuclear workers, as with the studies that turn up cancer clusters around reactors, so with Chernobyl — it can’t be radiation that’s producing these effects because the Hiroshima studies say it can’t. As independent scientist Rudi Nussbaum points out, the “dissonance between evidence and existing assumptions about… radiation risk,” the gap between new information and the “widely adopted presuppositions about radiation health effects,” has become insupportable.
Chernobyl is a better predictor of the Fukushima consequences than Hiroshima, but we wouldn’t know that from mainstream media.   Perhaps we would rather not know that 57% of Chernobyl contamination went outside the former USSR; that people as far away as Oregon were warned not to drink rainwater “for some time”; that thyroid cancer doubled in Connecticut in the six years following the accident; that 369 farms in Great Britain remained contaminated 23 years after the catastrophe; that the German government compensates hunters for wild boar meat too contaminated to be eaten – and it paid four times more in compensation in 2009 than in 2007. Perhaps we’d rather not consider the possibility that “the Chernobyl cancer toll is one of the soundest reasons for the ‘cancer epidemic’ that has been afflicting humankind since the end of the 20th century.”
“This information must be made available to the world,” write Yablokov et al.   But their book has met “mostly with silence,” as he said in a press conference in Washington DC, March 15, 2011. The silence of mainstream media has stonewalled information about Chernobyl’s health effects as effectively as the Soviets’ blackout concealed the accident itself, and as the Allies’ censorship hid the health effects of the Hiroshima and Nagasaki bombings.

“We need to quash any stories trying to compare this [Fukushima] to Chernobyl,” “otherwise it could have adverse consequences on the market.” “’This has the potential to set the nuclear industry back globally…We really need to show the safety of nuclear,” that “it’s not as bad as it looks.” These statements were made in a few of the more than 80 emails which the Guardian got access to, which were not intended for the public eye. “British government officials approached nuclear companies to draw up a co-ordinated public relations strategy to play down the Fukushima nuclear accident just two days after the earthquake and tsunami,” reports the Guardian, “to try to ensure the accident did not derail their plans for a new generation of nuclear stations in the UK.”
Comparisons with Chernobyl have been conspicuously absent from mainstream media, even when Fukushima was upgraded, in early June, to a level on a par with Chernobyl, level 7, the highest. Even when Arnold Gundersen, a nuclear engineer turned whistleblower who has been monitoring Fukushima from the start, asserted that this accident may actually be more dire than Chernobyl. Gundersen, an informed, level-headed commentator who inspires confidence, points out that there are four damaged reactors leaking into the atmosphere, ocean, and ground in an area more populated than the Ukraine: “You probably have the equivalent of 20 nuclear reactor cores…that is 20 times the potential to be released than Chernobyl.” (Fairewinds, June 16, 2011). But apart from the damage control piece it published March 15 (cited above) and Helen Caldicott’s passing reference to “research by scientists in Eastern Europe” (op-ed, “After Fukushima: Enough is enough,” December 2)—the Times has barely mentioned Chernobyl (and even Caldicott did not mention the Yablokov study by name). What Chernobyl has wrought, which has been documented so clearly by Yablokov et al., is simply too dangerous to give press to, undercutting as it does the nuclear industry’s claims to safety and viability.

The New York Times has done good reporting on Japanese blunders and corruption. It has described the way plant operators and government officials minimized the severity of the meltdown, the corporate and government cover-ups and irresponsibility (Norimitsu Onishi and Martin Fackler, “Japan held nuclear data, leaving evacuees in peril,” August 8, 2011). It has pointed out complicity between industry and regulators (Norimitsu Onishi and Ken Belson, “Culture of Complicity Tied to Stricken Nuclear Plant,” April 27, 2011). It has done pieces on citizens’ opposition (Onishi and Fackler, “Japan ignored or long hid nuclear risks,” May 17, 2011; Ken Belson, “Two voices are heard after years of futility”, August 19, 2011) and on grass-roots initiatives to gather data where bureaucrats failed (Hiroko Tabuchi, “Citizens’ testing finds 20 radioactive hot spots around Tokyo,” Aug 1, 2011). Tabuchi even takes a swipe at the “tameness of Japanese mainstream media,” which is commendable, though her statement is a model of “tameness” compared to Nicola Liscutin’s denunciation of Japanese mass media as “little more than the mouthpiece of the government and TEPCO.”   Human interest stories abound in the Times, as in other major media, stories of workers sent in to quiet the reactors, of people living in the vicinity of the reactors.   In one such piece, “Life in limbo for Japanese near damage nuclear plant,” May 2, 2011, Fackler and Matthew Wald refer to “a lack of hard data about the health effects of lower radiation doses delivered over extended periods” – a “lack” that’s assured, as we’ve seen, by the stonewalling of evidence endemic in the media.
As laudable as some of the Times coverage has been, what it targets is the ineptitude and corruption of the Japanese, what happened over there as opposed to what goes on here, where our own dirty linen remains unwashed, as it were, and out of sight. How much easier to criticize the lax regulatory mechanisms and lack of transparency of the Japanese than to shine a light on ourselves, on the insidious but largely invisible working of the nuclear lobby and lobbyists in this country, on the complicity of our own government and media with the nuclear industry.
A fascinating expose by Norimitsu Onishi, “Safety myth left Japan ripe for nuclear crisis” (June 25, 2011), invites comment along these lines. Onishi investigates the “elaborate advertising campaigns” led by Tepco and the Ministry of Economy to convince the public of the safety of nuclear power. Hundreds of millions of dollars were spent to rally support: “Over several decades, Japan’s nuclear establishment has devoted vast resources to persuade the Japanese public of the safety and necessity of nuclear power. Plant operators built lavish, fantasy-filled public relations buildings that became tourist attractions.” In one of these, “Alice discovers the wonders of nuclear power. The Caterpillar reassures Alice about radiation and the Cheshire Cat helps her learn about the energy source”.
Lest we feel smug, recall the promotion of “the friendly atom” by Walt Disney’s book and film, Our Friend the Atom, read and viewed by millions of schoolchildren (when they weren’t doing “duck and cover” drills).
What Onishi describes as happening in Japan happened in the U.S. as well— perhaps Onishi means to evoke such resonances— where a powerful propaganda campaign was launched, with hundreds of millions of dollars behind it, to promote “Atoms for Peace,” the new energy source “too cheap to meter” (though there was nothing “cheap” about it: it required enormous government subsidies, and still does).   This propaganda machine is described in the 1982 study Nukespeak: The Selling of Nuclear Technology in America: “Beginning in the mid-1950s, the AEC conducted a huge public relations operation to promote the vision of Atoms for Peace,” using “a wide range of PR techniques, including films, brochures, TV, radio, nuclear science fairs, public speakers, traveling exhibits, and classroom demonstrations” (traveling AEC exhibits with names like “Power Unlimited,” “Fallout in Perspective,” and “The Useful Atom”).
“Millions of kits of atomic energy information literature were distributed to elementary, high school, and college students.”   The public relations departments of reactor manufacturers such as Westinghouse and General Electric were also mobilized to prepare communities for nuclear facilities coming soon to their neighborhoods and to prime the general population to welcome the new technology. The connection with mainstream media could hardly be more direct, since “Westinghouse owned CBS for many years, and General Electric, NBC,” as Karl Grossman points out.   This same PR apparatus has been busy, in recent decades, conjuring the “nuclear renaissance” from the ashes of Chernobyl, selling nuclear power as “clean, green, and safe.”
The Times coverage of Fukushima has raised hopes in some quarters that this current disaster may have opened a space for public debate in mainstream media about nuclear power. But how real is this debate, when so many fundamental issues remain hidden? How open a discussion can this be, when Chernobyl and the German reactor study go unmentioned, when we have to turn to alternative media to learn that the Yablokov study even exists—or to learn that, as Alexander Cockburn reports, Obama was the recipient of generous campaign contributions from the nuclear industry (which may cast some light on his enthusiastic support of nuclear power)? How open a discussion is this, when the ABCC/RERF radiation risk assessments that enable the industry to exist remain unaddressed?   A serious consideration of the Yablokov study and the German reactor study would reveal them to be “skewed” and useless, as we’ve seen; but   rather than go this route, the Times calls on RERF experts to do damage control for the industry.    So RERF reassurances about radiation risk remain unchallenged and in place as the invisible buttressing of the nuclear industry, as the basis of radiation safety standards throughout the world.
Contrast the response of U.S. media to the response of the German press:   “Fukushima marks the end of the nuclear era” (Spiegel, March 14, 2011); “Germany can no longer pretend nuclear power is safe…. it is over. Done. Finished.” (March 14, 2011)   To Spiegel, Fukushima is a warning that cries out for an end to nuclear power; to the Times, Fukushima is a warning that we should build our reactors more efficiently and regulate them more carefully, rather than cease building them at all (Editorial, “In the wake of Fukushima,” July 23, 2011). In the months after Fukushima, “Spiegel’s most popular online feature as the drama unfolded was an evolving digital map of the ‘radiation plume,’” observes Ralph Martin; “the German electorate made nuclear power their top concern—they made Fukushima theirs,” whereas “the reaction of American media…[was to] regard the events as yet another story, without any larger social ramifications,” without much relevance to ourselves.   And so nuclear power marches on: “Alabama nuclear reactor, partly built, to be finished,” Matthew Wald, August 19, 2011; “Two utilities win approval for nuclear power plants,” Matthew Wald, December 23, 2011 (neither of these is a particularly long or noticeable article, and neither is front page).
There has been precious little mention in U.S. mainstream media of the plume Spiegel was tracing, except to whisk it away as presenting “no health hazard” (Broad, cited above), though the worldwide fallout from Fukushima has occasioned much discussion on the Web. Gundersen cites evidence that the early releases, which were revealed to be more than double what we were initially informed, contained “hot particles” of cesium, strontium, uranium, plutonium, cobalt 60 that have turned up in automobile engine filters, and according to what’s been detected in air filters, a person in Tokyo was breathing about ten hot particles a day through the month of April. A person in Seattle was breathing about five, that same month.

Not to worry: “The effects of radiation do not come to people that are happy and laughing. They come to people that are weak-spirited, that brood and fret.” So says Dr. Yamashita Shunichi, who has been assigned to head the official study of radiation health effects in the Fukushima population. Yamashita was sent by the Japanese government from Nagasaki University, where he was part of the RERF studies, revered for their long experience with the A-Bomb survivors. Mandated with addressing the concerns of the citizens and correcting their misconceptions, Yamashita rallies the population with stirring words: “The name Fukushima will be widely known throughout the world…This is great! Fukushima has beaten Hiroshima and Nagasaki. From now on, Fukushima will become the world number 1 name. A crisis is an opportunity. This is the biggest opportunity. Hey, Fukushima, you’ve become famous without any efforts.”
We’re in good hands.

Now Comes the Hard Part

2011-12-30T16:37:00.000-08:00

This is what happens when governments spend more money than they take in, and PEI has been doing that almost continuously for twenty-five years, Liberals and Conservatives both. Robert Ghiz's late father Joe left office when budget cutting rather than nation building became government's preoccupation, and it was left to Catherine Callbeck to do the heavy lifting. In the Spring of 1995 Callbeck's Liberal government broke a signed agreement with the public service and implemented the infamous 7.5% wage roll-back. This did a lot to get Conservative Pat Binns elected in 1996, and in 1999 there were a brief few minutes of a budget surplus, then it was back to business as usual. Robert Ghiz says he's not going anywhere and will be around to fight the next election in 2015. He has a lot of difficult decisions to make.

The Guardian headline "Province Reviewing Aid for Struggling Beef Plant" was not unexpected, despite promises of ongoing support for the plant during the election campaign. And it's obvious from reader comments that a lot of Islanders think it's a no-brainer... "shut it down.", "bad management" and "greed" jumped out, although greed normally means someone is making more money than they should and I'm not sure who that is.

The meat packing business in North America is very competitive, and like so much else, size matters. The margin.. the difference between what a plant pays a farmer for live cattle, and what it can sell finished carcasses for.... is tiny, so volume is everything, and volume is the one thing the Atlantic Beef Products Plant doesn't have, and it's been that way on PEI for decades.

In the early 1980's Canada Packers, a meat packing giant in Canada at the time, announced it was going to shutdown its Charlottetown plant because it was unprofitable. This began a long-standing practice of PEI governments using taxpayer dollars to keep local markets and meat packing jobs here, first with Canada Packers which became Maple Leaf Foods, then the NOFG operation, and now Atlantic Beef. Was it/is it money wasted?

A lot of people did the kind of work few of us would take on, bought homes, raised families, and they certainly wouldn't think it was wasted. Beef and pork farmers get paid based on prices established at the Chicago Board of Trade (a North American price), and have always taken discounts over the years to help local meat plants stay in business. Even now some cattle farmers send their livestock to the closest federally inspected plant in Ontario where prices are higher, although other farmers say that transportation costs and wear and tear on the cattle eat that up.

The irony right now is that losses at the beef plant have gone up specifically because cattle prices are finally returning to profitable levels in Canada, after five lost years caused by the discovery of one "mad-cow" in Alberta, and the loss of the U.S. market for several years. Until wholesale prices from the supermarket chains go up to cover these added costs (and Atlantic Beef is competing against beef imports from South America and boxed beef from huge slaughter plants in Western Canada), losses will continue but again provincial dollars aren't going to secret Swiss bank accounts, but circulated and taxed here in the Maritimes.

And there's more to consider. Food/farm thinkers know that a farmer from Swoope Virginia called Joel Salatin has become the poster boy for progressive, sustainable agriculture. At the heart of his Polyface Farms is something PEI is very good at producing: grass. It adds organic matter to the soil and is the best way to prevent errosion. Teamed with alfalfa and clover, it "fixes" nitrogen from the air cutting down on the need for commercial fertilizer, and of course the manure from livestock is essential to healthy soil. There could also be financial benefits from growing grass which soaks up carbon dioxide, if and when carbon credit trading ever begins in Canada. But here's the thing... there's only one reason to continue to grow grass, and that's if there's cattle to eat it (Salatin is very firm on this), and PEI won't have much of a livestock industry if the only federally-inspected plant in the Maritimes is closed. Then there are the tourists who fully expect to see cows grazing in fields, and hay being cut, and don't think this doesn't matter. It almost seems like "beef plant aid" is as much an investment in the economy and the environment as the tax holiday for aerospace firms, or subsidies for public transportation, or the hundreds of other ways taxpayers money is spent.

Here's what I'm hoping. Both Nova Scotia and New Brunswick had been contributing to the losses at the plant, but new governments there facing their own huge deficits stopped paying. Obviously there's little incentive for them to contribute again if PEI ensures the plant will stay open. The only thing that will get them to re-think is if farmers in the other respective provinces become concerned too that it will close. I think the other provinces should contribute, and I'm hoping this is Robert Ghiz's play. (He is a good poker player and knows how to bluff).

There have been lots of different mixes of managers and staff over the years: a very experienced manager from New Zealand, a marketing expert from Moncton who lasted only a few months, board appointments from very successful meat packing operations in the region, brokers with lots of contacts an experience, but it keeps coming back to economic basics, small margins, not enough volume. Margins could improve with specialty products ("natural" beef, grass-fed or pastured beef which has a big following in the U.S. North-East, organic beef, kosher and/or halal) all are being considered. It's a chicken and egg problem for the plant: it can't market any of these until it has them, farmers won't make production changes until they know there's a buyer willing to pay the premium price, and everyone is in survival mode at the moment (farmers have millions of dollars in federal loans to repay).

So you've got a livestock industry worth about $125 million, putting money into the pockets of hundreds of people beyond the farmgate. The "aid" for the meat plant should be judged on the same basis as other expenditures, and if viewed fairly I think will be seen as an excellent investment.

A Time to Reflect

2011-12-25T03:54:00.000-08:00

And it's also a time to be lazy. I'm going to suggest that people interested in farm/food issues take a look here:

http://bittman.blogs.nytimes.com/2011/12/23/food-links-for-the-solstice/

If I print the piece I'll lose all of the links to dozens of important food stories gathered by Mark Bittman (that's the lazy part).

For those who are blessed like myself, a time to give thanks. For those who are struggling a wish for some moments of peace in the days ahead.

And when you're eating/feasting... don't forget to thank a farmer. And if you know who that farmer is, even better.

The Journey May Be More Important

2011-12-21T12:32:00.000-08:00

One of the benefits of writing a blog is that you don't have to explain yourself before making a stab at something. Often it was the story meetings at CBC that were the most discouraging part of the day. If something didn't have the tried and true story elements of complaint,crisis or conflict, it would be a very hard sell. So here's something that would never have made it to air. What does PEI's Royal Commission on Land Use (Round Table in 1997) have in common with some new work by very smart energy thinker Amory Lovins? Both were/are trying to solve very serious environmental problems, both trying to find the right mix of government regulations, and personal responsibility to make things better.

It was fifteen years ago when the Round Table On Resource Land Use and Stewardship (chaired by farmer Elmer MacDonald, and included fishermen, foresters, environmentalists, tourism operators, and more) made a series of recommendations to try (amongst other things) to protect water resources from soil erosion and pesticide run-off. It followed a time of quick expansion of the potato industry (driven by newly built french fry plants). There was a huge jump in land prices, and many farmers cut back on crop rotations to cover these increased costs, and perhaps worse started cropping sloped fields around waterways. The new markets were badly needed after PVYn put so many seed growers outs of business, and the new jobs at the fry plants were welcome, but there were environmental costs as well: fishkills, increased nitrates, soil erosion..

Some Round Table recommendations were followed: a buffer zone between row crops and waterways, fencing cattle out of streams, a mandatory three year crop rotation is on the books but not enforced. There was one forgotten recommendation that I think deserves more attention (and gets us closer to Amory Lovins). The Roundtable said what if organic matter (measured as a percentage of soil structure) were measured in fields on a regular (yearly?) basis, and used as a way to measure progress or failure in improving soil quality. The information would be available to everyone. I would add a further idea that improvements in organic matter be the basis for continuing to get lower land taxes and cheaper fuel. If the organic matter is going up, then farmers enjoy the benefits of lower taxes. If organic matter falls, then they don't. I say let farmers decide how this can be accomplished. Those that think that 3 year rotations aren't necessary get to do what they think is best. There may be some fields that need four and five year rotations to start to improve. Either way there's tangible evidence and reward or penalty. It sets up a different dynamic that creates a measurable benchmark that moves soil management in the right direction, treats all farmers the same but doesn't treat them like children. And because it's the organic matter that's first to be lost when there's soil erosion from wind or water, there's good reason to take steps to prevent it. It also gives landowners who lease and rent their land reason to pay attention rather than just collecting the rent and hoping things will be OK.

Most farmers will meet this standard, and will be left to manage their land as they see fit. Those that don't will pay a steep price. As it stands we have regulations that are loosely enforced because that's what the politicians want, enforcement officers who are treated more like Dirty Harry than a helpful agent of government, and many in the public with very little confidence that government or farmers are doing the right thing.

Too simplistic? Too idealistic? Maybe. There's got to be something better than what we're doing now.

I think many of the same dynamics are at work when it comes to climate change. From everything that's happened in the last two weeks we know the Government of Canada says some nice things but is entirely hostile to the idea that climate change is real, and urgent action is needed. As citizens again we wait for some big policy announcement that will bludgeon the private sector into doing the right thing, when we know full-well that won't happen. Amory Lovins in his new book Reinventing Fire: Bold Business Solutions in the New Energy Era is suggesting governments set goals and standards but give people and corporations more leeway in how to reach them. He's not going soft on the need for change, he just thinks a more decentralized approach will get us much further, much more quickly.

Amory Lovins has written a lot of sensible things when it comes to energy over the years. I always remember his analysis that a huge percentage of our energy demand is for relatively low-grade temperature requirements (180 degree F. water for space heating, 120 degree F. water for domestic hot water for example) but North Americans use incredibly high grade energy to get it (oil, natural gas, electricity from nuclear, etc.) He called for a better match of energy source with energy use (wood waste, biomass, solar, etc for low grade demand; high grade fossil fuel for transportation and industry until better technology comes along). He's not ideologically driven and definitely believes in the private sector. He just thinks governments are wrong-headed in what they use the tax system and other incentives to support, the very things that are causing so much damage.

I don't agree with everything in this take on what Canada needs to do now on climate change, but I do like shifting responsibility for change onto people and corporations, and giving them the right incentives. A price on carbon is the simplest policy choice (and the analysis of how this is working in British Columbia is very positive), but all three major Federal parties have backed away from it for strictly political (and very stupid and shortsighted) reasons. So we need something a little more complicated. It's better than doing nothing.

http://www.theglobeandmail.com/report-on-business/commentary/neil-reynolds/post-kyoto-a-search-for-a-subtle-skill-in-tackling-climate-change/article2278297/

Post-Kyoto, a search for ‘a subtle skill’ in tackling climate change

The Kyoto Protocol was very much the north wind in Aesop’s fable of the wind and the sun. Which of those elements could more quickly induce a man to discard his cloak – or a country to discard its carbon?
It is remarkable that so many people still think that the wind should have prevailed, that force (implicit or explicit) should have won over persuasion. Even Environment Minister Peter Kent, in his repudiation of Kyoto, appeared to suggest that a stronger wind than Kyoto might still be needed down the road. Let’s hope not. Let’s hope that, next time, Canada goes with the solar power.

It is by no means utopian to bet on the sun. Amory Lovins, the celebrated American environmental scientist, has argued for years that greenhouse gas emissions can be best controlled (and reduced) by radically decentralized decision-making in the private-sector economy.
In his new book, Reinventing Fire: Bold Business Solutions in the New Energy Era, Mr. Lovins asserts that using only the profit incentives inherent in the marketplace and minimal government subsidies, the United States could entirely eliminate oil, coal and nuclear energy from its economy, and simultaneously reduce natural gas consumption by as much as one-third, by 2050. This transformation could happen, he says, through greater energy efficiency, without new taxes or new laws.
Equally persuasive as an alternative to the hypocrisy of international treaties, and equally radical, is the eloquent “Hartwell paper,” so-called for the English castle in which academics from OECD countries convened in 2010 to analyze the collapse the previous year of the Kyoto agreement at the Copenhagen round of Kyoto summits.
Co-published in May, 2010, by Oxford University and the London School of Economics as “A New Direction for Climate Policy After the Crash of 2009” it reflects the judgment of people who endorse “decarbonization” – but who deem the Kyoto accord an utter and abject failure.
“There is no evidence that … the ‘Kyoto’ type approach [to climate control] has produced any discernible acceleration of decarbonization whatsoever: not anywhere, not in any region,” the paper states. This was particularly true in Canada. The Kyoto Protocol required a reduction in greenhouse gas emissions of 6 per cent (from 1990 levels); in fact, Canada increased emissions by 36 per cent.
Kyoto became impossibly burdened by the conflicting agendas of too many countries, the Hartwell paper argues. The moment of truth came at Copenhagen when the debate degenerated from windy rhetoric to blackmail – “when utopian talk of global solutions and universal solutions” by rich countries gave way to petty demands for cash by poor countries.
But the fundamental error of Kyoto, the Hartwell paper argued, was its erroneous assumptions that science can successfully dictate public policy and that climate change could be “solved” by government decree. A less doctrinaire policy would have put it differently, the paper said, citing a 2010 article in The Economist: “Action on climate is justified, not because the science is certain, but precisely because it is not.”
Any credible carbon policy must therefore reflect a certain scientific humility. The public will quickly tire of policy wars that cannot be won: the war on cancer, on drugs, on poverty. As with all other such wars, the war on carbon will never be won; atmospheric carbon will be, at best, managed.
If there must be a war on carbon, the Hartwell paper argued, it should be a guerrilla war – fought differently in different countries with decentralized targets on diverse fronts: on adaptation to climate change, on energy efficiency, on forest policy, on biodiversity, on air quality. Each foray must be fought for its own sake. The accumulation of incremental victories will significantly reduce carbon emissions. More fundamentally, each foray must have widespread public support.
The Hartwell paper offers a nice analogy. Imagine an English landscape gardener who must design a driveway to a great castle. He will not force a roadway through to the castle in a straight line. He will make it follow a circuitous route, passing here though a stand of great trees and there across an open field. He will incorporate many different perspectives and will achieve an aesthetic result. The sequel to Kyoto, whatever it may be, should exhibit “a subtle skill … the capacity to deliver an ambitious objective harmoniously.”
Please, Mr. Kent: No more complex, top-down regulatory regimes. They aren’t necessary. They, too, will fail.

A Good Question

2011-12-17T08:04:00.000-08:00

I started reading a columnist called George Monbiot in the UK Guardian just after the devastating tsunami in Japan last March. There was a lot of understandable lashing out at the risks of using nuclear energy. Monbiot could have joined the bandwagon, but took a more challenging path. He's very critical of the management and regulating of nuclear energy but when the alternative is burning coal, he says environmentalists have to listen to their heads, not their hearts (he says it a little more forcefully than that).

This week he asked a very simple question, one that needs to be asked. His only mistake? He didn't mention Canada as a climate laggard.

http://www.guardian.co.uk/environment/georgemonbiot/2011/dec/16/durban-banks-climate-change/print

Why is it so easy to save the banks – but so hard to save the biosphere?

They bailed out the banks in days. But even deciding to bail out the planet is taking decades.

Nicholas Stern estimated that capping climate change would cost around 1% of global GDP, while sitting back and letting it hit us would cost between 5 and 20%. One per cent of GDP is, at the moment, $630bn. By March 2009, Bloomberg has revealed, the US Federal Reserve had committed $7.77 trillion to the banks. That is just one government's contribution: yet it amounts to 12 times the annual global climate change bill. Add the bailouts in other countries, and it rises several more times.

This support was issued on demand: as soon as the banks said they wanted help, they got it. On just one day the Federal Reserve made $1.2tr available – more than the world has committed to tackling climate change in 20 years.

Much of this was done both unconditionally and secretly: it took journalists two years to winkle out the detail. The banks shouted "help" and the government just opened its wallet. This all took place, remember, under George W Bush, whose administration claimed to be fiscally conservative.

But getting the US government to commit to any form of bailout for the planet – even a couple of billion – is like pulling teeth. "Unaffordable!" the Republicans (and many of the Democrats) shriek. It will wreck the economy! We'll go back to living in caves!

I'm often struck by the wildly inflated rhetoric of those who accuse environmentalists of scaremongering. "If those scaremongers have their way they'll destroy the entire economy" is the kind of claim uttered almost daily, without any apparent irony.

No legislator, as far as I know, has yet been able to explain why making $7.7tr available to the banks is affordable, while investing far smaller sums in new technologies and energy saving is not.

The US and other nations began talking seriously about tackling climate change in 1988. Yet we still don't have a legally binding global agreement, and we are unlikely to get one until 2020, if at all. Agreements to help the banks are struck at economic summits without breaking sweat, yet making progress at climate summits looks like using a donkey to tow a 44-tonne truck.

That said, the outcome at Durban, after some superhuman feats of traction, was better than most environmentalists expected. After Copenhagen and Cancún, it seemed implausible that rich and poor nations would ever agree that they would one day strike a legally binding treaty, but they have. That doesn't mean that the outcome was good: even if everything happens as planned, we are still likely to end up with more than 2C of warming, which threatens great harm to many of the world's people and places.

The clearest account of the negotiations and the outcome of the Durban meeting that I have read so far has been written by Mark Lynas, who attended as an adviser to the president of the Maldives. The byzantine complexity he documents is the result of 20 years of foot-dragging and obstruction. When powerful countries want to do something, they do it swiftly and simply. When they don't, their agreements with other nations turn into a cat's cradle.

Here are some of the key points:

• The most important negotiations boiled down to a battle between two groups: the European Union, least developed countries (LDCs) and small island states on one side, which pressed for steeper, faster cuts, and the US, Brazil, South Africa, India and China on the other side, seeking to resist that pressure.

• The first group (EU + LDCs) succeeded in one respect: the other nations agreed to work towards a legally binding deal "applicable to all parties". In other words, unlike the Kyoto protocol, which governs only the greenhouse gas emissions of a group of rich nations, this will apply to everyone. (It doesn't necessarily mean that all nations will have to reduce their emissions however).

• The first group failed in its attempt to get this done quickly. The poorest nations wanted a legally binding outcome by the end of next year. But the US-China group held out for 2020, and got it. Unless this changes, it makes limiting the global temperature rise to 2C or less much harder - perhaps impossible.

• The Kyoto protocol, though it will remain in force until either 2017 or 2020, is now a dead letter. In fact, Lynas suggests, unless the loopholes it contains are closed it could be worse than useless, as they could undermine the voluntary commitments that its signatory nations have made.

• The countries agreed to create a green climate fund to help developing nations limit their greenhouse gas emissions and adapt to the impacts of global warming. But, with three exceptions - South Korea, Germany and Denmark - they didn't agree to put any money into it. The fund is supposed to receive $100bn a year: a lot of money, until you compare it to what the banks got.

• Between now and 2020, all we have to rely on are countries' voluntary commitments. According to a UN study, these fall short of the cuts required to prevent more than 2C of global warming - by some 6bn tonnes of carbon dioxide.

• But as the Durban agreement conceded, 2C is still too high. It raised the possibility of pledging to keep the rise to no more than 1.5C. This would require a much faster programme of cuts than it envisages.

So why is it so easy to save the banks and so hard to save biosphere? If ever you needed evidence that our governments operate in the interests of the elite, rather than the world as a whole, here it is.

www.monbiot.com

This Welcome Change May Be Illegal

2011-12-15T05:47:00.000-08:00

I was looking forward to meeting Albert Wada back in 2005. He had taken on a task that was badly needed in the North American potato industry, trying to convince farmers that they were their own worst enemies, over planting every Spring, and suffering through bad prices through the Fall and Winter. He had a lot at stake himself in this effort. Wada Farms grows twelve thousand acres of potatoes near Blackfoot, Idaho, the heart of the U.S. potato industry. Albert Wada is an unimposing man, but with very strong beliefs. He sums up the marketing challenge for farmers this way:

"They occupy the lowest position in the economy… above them in the marketing chain are processors, packers, sales organizations, marketers, brokers, transporters, wholesalers and retailers…

Farmers get paid after all of them subtract their expenses and margins…

Risk must be passed back to the farmer for those above them to remain healthy and viable…"

Wada was determined to make things better. There is a law in the U.S. called the Capper-Volstead Act which allows farmers to set up co-operatives to control the marketing of farm products, usually to hold back surpluses and keep prices from falling. (It's a role the U.S. Government used to play until the 1970's). Wada spent months visiting potato growing areas in the U.S. to get farmers to join what became the United Potato Growers of America.

Wada did visit PEI as well. Canada does not have anything comparable to Capper-Volstead but there were efforts here too to cut back acreage. (remember all the controversy over using potato board levies to pay farmers to cut plantings). Wada was successful in the U.S., and here, to better link potato demand to production, and prices did improve. There is also much better communication between provinces with the creation of the United Potato Growers of Canada. It can't control marketing or production, but growers here at least share market information and try to keep prices from falling.

Now all of Wada's efforts may be for naught. A large produce marketer in New York State called Brigiotta’s Farmland Produce and Garden Center Inc., went to court and made this argument: Capper-Volstead does allow farmers to control the marketing of farm products, but not the production. In other words the effort by United to limit planting is illegal. U.S. District Court Judge Lynn Winmill ruled last week it is:

"The Court first notes that there are no cases where a court specifically approved, under the Capper-Volstead Act, a pre-production agricultural output limitation as opposed to a post-production marketing decision such as withholding of product from market. Likewise, there are no cases where a court has concluded that Capper-Volstead immunizes cooperatives and their members who seek to collectively implement production controls in order to raise prices.

However, the language of the Capper-Volstead Act itself indicates that it does not apply to production limitations. The Court must construe statutory terms in accordance with their ordinary meaning. Federal Deposit Ins. Corp. v. Meyer, 510 U.S. 471, 476 (1994); United States v. Nader, 542 F.3d 713, 717 (9th Cir. 2008). The key phrase of the Act, “processing, preparing for market, handling, and marketing,” applies to acts done to an agricultural product after it has been planted and harvested. Thus, under the plain language of the statute, coordinating and reducing acreage for planting is not allowed.

Still, Defendants argue that because Capper-Volstead cooperatives are allowed to fix prices, they must also be allowed to restrict production. This argument is unpersuasive. The reason an agricultural cooperative can fix the price at which their good is sold is because if the price rises, farmers will produce more and consumers will not be overcharged. Individual freedom to produce more in times of high prices is a quintessential safeguard against Capper-Volstead abuse, which Congress recognized in enacting the statute.

For these reasons, the Court concludes that acreage reductions, production restrictions, and collusive crop planning are not activities protected by the Capper- Volstead Act.

There is some better news for Canadian growers. United of Canada had originally been linked to the lawsuit, but has now been excused.

Maritime potato farmers went through a similar exercise years ago. In the mid '80's there was an effort to set-up the Eastern Canadian Potato Marketing Agency (yes a dreaded supply management marketing board), that would have controlled potato production and could have had an extraordinary impact in PEI and New Brunswick. Potato production would not have jumped on PEI during the 1990's, with all of the environmental and marketing problems associated with it. A court case killed this effort too. Irving owned Cavendish Farms argued in Federal Court that potato production could not be reasonably controlled through acreage quotas because of variations in weather year to year. The judge agreed, and the proposed agency was dead.

Getting farmers to work together is very difficult. Their instincts are that they're smarter, and work harder than their neighbours, and cutting back production is for sissies. Now a very genuine effort to bring some sense to the North American potato industry is at risk. Consumers will likely benefit, and farmers once again will be left licking their wounds and wondering what they have to do to regain some marketing clout. With increasing price competition at the retail level (hello Walmart), national business commentators smelling blood in their effort to kill supply management in dairy poultry and eggs, and a Federal Government that's decided the only worthwhile Canadian farmer is one who can compete at a global scale, the challenges for farmers in high cost areas like the Maritimes will only get more difficult.

Change is Hard

2011-12-12T05:32:00.000-08:00

“Power concedes nothing without a demand. It never did and it never will.” I was reminded of this famous quote by Fredrick Douglass who had such an influence on Martin Luthor King last week. It was in an excellent New Yorker article comparing the Occupy movement, and the effort by environmentalists to stop the Keystone XL Pipeline. (I'll post the article below).

The reasons for, and the possibility of, change in the food system were in the air last Thursday at the second M.E.A.L. (Meet Eat and Learn) in Charlottetown. The organizers brought in an interesting mix of local food producer/activists (including organic farmer Reg Phelan, Green Party Thinker Peter Bevan-Baker, Chef Ilona Daniel, Julie Shore of Prince Edward Distillery), former PEI agriculture minister Tim Carroll talked about regulatory measures that would give farmers more control over the food production, there was a beautiful film from documentary maker Mille Clarkes, and for me a welcome edition, some "real-politic" discussion of slugging it out in the commodity world from Lori Robinson who heads one of the most progressive and successful potato industry enterprises in Albany (her bottom line came from her late father: no soil-no business).

There was a lot of good energy (and excellent local food) in the room, and for a few moments it did seem possible that engaged consumer/citizens could drag a reluctant food system to something more rational, sustainable, and beneficial for all. Walking out of the Farm Centre and immediately seeing the eery green from the Sobeys Food Palace sign next door, and the busy parking lot there too, was as bracing as the cold night air. This isn't going to be easy.

So back to “Power concedes nothing without a demand". What should the demand be? For years I've thought the major supermarkets should have a row or two devoted to local stuff at fair-trade prices (ie. the farmer isn't competing with China or Argentina, but is assured a reasonable return... maybe the provincial government could guarantee any losses). I don't think there will be. Just as Islanders stepped up to pay more for wind energy when Maritime Electric created the opportunity a few years ago, and just as we all shell out $200 a year and clean out peanut butter jars to make the Waste Watch program work, I think given the chance enough Islanders would support paying a little more for local food IF they know the money gets into the pockets of farmers. This won't in any way solve the financial/debt burden carried by many farmers, but it will break the pattern of big retailers/food processors essentially saying to consumers:" Don't you worry dear about where your food comes from, we'll guarantee its quality and value, you just have to keep coming to our store to get it."

If you have a demand you think would move the food system in a better direction let me know and I'll post it..

A piece today that reinforces how difficult change will be (including a lessening in demand for organic food), an interesting commentary on how disengaged many people have become, and as promised the New Yorker article which is a must-read.

http://www.theglobeandmail.com/report-on-business/economy/grocery-store-wars-expected-to-cool-food-prices/article2267506/

Grocery store wars expected to cool food prices
by tavia grant • Dec. 12, 2011

Hot food inflation has left many Canadians gasping this year, but the pace of increases should cool off next year as competition heats up among grocery stores.

Retail food prices are expected to rise no more than 2 per cent in 2012, a report to be released Monday by the University of Guelph says.

That’s less than half the current pace of food inflation, which is running at 4.3 per cent. Any cooling of food prices will no doubt come as a relief to households, which are struggling with high levels of consumer debt, tepid wage increases and a rising cost of living.

“It’s been a hard year for Canadian consumers in food retail stores, especially those with less means,” said Sylvain Charlebois, associate dean of research and graduate studies at Guelph’s College of Management and Economics. “2012 will likely be a year where food prices will give consumers a welcome break.”

A range of factors have driven up food prices this year – from higher feed costs to volatile weather patterns and a diminished impact from the currency. Canada is not alone – the United Nations measure of world food prices hit a record in February, though prices have since eased.

Competition is a key reason for an expected moderation in Canada. Wal-Mart Canada is opening new super-centres next year, while Target is planning on entering the Canadian market in 2013. Both moves are expected to put pressure on Canada’s existing grocers – Loblaw, Sobeys and Metro – to trim prices to hang on to market share.

“The Canadian consumer will benefit from what will likely happen in the next couple of years in the food distribution sector,” said Prof. Charlebois, who co-wrote the food price forecast with Guelph economics professor Francis Tapon. “There will likely be a price war.”

Canada’s food inflation has been running above the 4-per-cent mark for the past five straight months, a much hotter pace than the overall rate of inflation which is currently 2.9 per cent. The Bank of Canada, too, sees food inflation subsiding next year.

Any food price increases will have a bigger impact on poorer households. The one-fifth of Canadian households with the lowest income spend 16.3 per cent of their budgets on food. By contrast, the richest one-fifth allocate about 7.5 per cent to food, according to Statscan’s survey of household spending.

Canadians, on average, devote about 10 per cent of their household budgets to food, a share that has diminished considerably from 30 years ago when it was about a quarter of the budget, Prof. Charlebois said.

The university sees meat prices rising by no more than 3 per cent. Bakery goods, whose prices have escalated rapidly in the past two years, are seen increasing 3 per cent amid softening commodity prices.

Elsewhere, Canada’s strong currency should keep a check on import prices, limiting fresh vegetable price increases to between 1 per cent and 3 per cent. Restaurant price increases – which are typically more difficult to predict – should stay below 2 per cent.

Meantime, squeezed households will curtail consumption of pricier products, such as organic foods, in favour of cheaper conventional fare, the university said.

Food prices are tricky to predict because so many factors can affect their prices. The university’s forecast last year came close though – it expected prices would rise between 5 per cent and 7 per cent this year. As of October, food prices in stores are up 4.9 per cent, meaning it missed its target by just 0.1 per cent.

http://www.theglobeandmail.com/news/politics/john-ibbitson/in-an-age-without-mediators-many-feel-left-out-of-the-political-process/article2267498/

In an age without mediators, many feel left out of the political process

What do some poor, uneducated, rural, aboriginal or immigrant Canadians have in common with members of Parliament? All are outsiders.
So concludes a new study of why Canadians don’t vote. There are lessons in it for everyone who wonders how you sustain a democracy in an age of declining civic engagement.

Samara, a new organization dedicated to increasing active citizenship, conducted a series of focus groups over the summer and fall in which they asked people who considered themselves outside the political process why they felt that way. The respondents were, for the most part, less affluent, less educated, more rural or more likely to be aboriginal or immigrant, and they self-identified as non-voters. They said that whenever they tried to find a daycare space, to get into a job training program, to get a speed bump installed on a dangerously busy street – to engage, in other words, with government – they gave up in frustration.
So they washed their hands of the whole thing, including voting.
This contrasted with a control group of sorts: people who voted, who tackled bureaucracies, who set about making change, and who succeeded. These engaged citizens found the sclerosis of government no less frustrating, but they had the education, the time and the confidence to overcome obstacles.
“The political system has separated the Canadian public into insiders who have the capacity and energy to fight and remain engaged in the system, and outsiders who simply walk away out of frustration or disappointment,” the report concluded.
’Twas ever thus. But the authors noted with bemusement that the outsiders who had given up on the system used the same expressions and voiced the same sentiments as former members of Parliament who had been interviewed in an earlier study. MPs, too, had tried to engage the bureaucracy, to effect change, to influence the real decision-makers. More often than not, they left public life frustrated. Even the insiders feel like outsiders now.
The poor and less educated have always been on the outside looking in, but at least in the past the great majority of people, regardless of class, voted, which is the easiest and most visible way to engage with government. But now only between 50 and 60 per cent of voters bother to cast a ballot at federal or provincial elections, and the number continues to decline. What’s happening?
It may be that, in the past, working and lower-middle-class voters had more social levers. They had the union, or the church, or the service club, or the PTA. Their MPP or MP saw themselves as spokesmen for their constituents within caucus.
MPs still do valuable constituency work. But they have lost much of their ability to mediate between voters and the all-powerful Centre in government. Beyond that, churches are in decline, and unions, and organizations like Rotary or Kiwanis. Without mediation, society is splintering into those who have the will and skill to engage with and influence government, and those who just carry on.
The good news is that even the most disengaged voters remain, according to Samara, enthusiastic about democracy itself. “Democracy’s great; it’s the politics I hate,” is how the authors summed it up.
Maybe we need to bend our minds to finding new mediators. Who replaces the priest? What is the next Lions Club? What can an MP be, if he can no longer be simply “a good constituency man?”
There are no easy answers to this. But if you have thoughts, please feel free to e-mail (jibbitson@globeandmail.com) or add a comment to the online version of this column. I’ll post, and comment on, the most thoughtful responses online later Monday.

Taking It to the Streets
by Jane Mayer

Last spring, months before Wall Street was Occupied, civil disobedience of the kind sweeping the Arab world was hard to imagine happening here. But at Middlebury College, in Vermont, Bill McKibben, a scholar-in-residence, was leading a class discussion about Taylor Branch’s trilogy on Martin Luther King, Jr., and he began to wonder if the tactics that had won the civil-rights battle could work in this country again. McKibben, who is an author and an environmental activist (and a former New Yorker staff writer), had been alarmed by a conversation he had had about the proposed Keystone XL oil pipeline with James Hansen, the head of NASA’s Goddard Institute for Space Studies, and one of the country’s foremost climate scientists. If the pipeline was built, it would hasten the extraction of exceptionally dirty crude oil, using huge amounts of water and heat, from the tar sands of Alberta, Canada, which would then be piped across the United States, where it would be refined and burned as fuel, releasing a vast new volume of greenhouse gas into the atmosphere. “What would the effect be on the climate?” McKibben asked. Hansen replied, “Essentially, it’s game over for the planet.”

It seemed a moment when, literally, a line had to be drawn in the sand. Crossing it, environmentalists believed, meant entering a more perilous phase of “extreme energy.” The tar sands’ oil deposits may be a treasure trove second in value only to Saudi Arabia’s, and the pipeline, as McKibben saw it, posed a powerful test of America’s resolve to develop cleaner sources of energy, as Barack Obama had promised to do in the 2008 campaign.

But TransCanada, the Canadian company proposing the project, was already two years into the process of applying for the necessary U.S. permit. The decision, which was expected by the end of this year, would ultimately be made by Obama, but, because the pipeline would cross an international border, the State Department had the lead role in evaluating the project, and Secretary of State Hillary Clinton had already indicated that she was “inclined” to approve it. Both TransCanada and the Laborers’ International Union of North America touted the construction jobs that the pipeline would create and the national-security bonus that it would confer by replacing Middle Eastern oil with Canadian.

The lineup promoting TransCanada’s interests was a textbook study in modern, bipartisan corporate influence peddling. Lobbyists ranged from the arch-conservative Grover Norquist’s Americans for Tax Reform to TransCanada’s in-house lobbyist Paul Elliott, who worked on both Hillary and Bill Clinton’s Presidential campaigns. President Clinton’s former Ambassador to Canada, Gordon Giffin, a major contributor to Hillary Clinton’s Presidential and Senate campaigns, was on TransCanada’s payroll, too. (Giffin says that he has never spoken to Secretary Clinton about the pipeline.) Most of the big oil companies also had a stake in the project. In a recent National Journal poll of “energy insiders,” opinion was virtually unanimous that the project would be approved.

McKibben concluded that the pipeline couldn’t be stopped by conventional political means. So, in June, he and ten other activists sent an open letter to the environmental community saying, “It’s time to stop letting corporate power make the most important decisions our planet faces. We don’t have the money to compete . . . but we do have our bodies.” Beginning in August, the letter said, volunteers would be needed to help provoke mass, nonviolent arrests at the White House. The activists called for civil disobedience, with the emphasis on the “civil”: “Come dressed as if for a business meeting—this is, in fact, serious business.” Waves of neatly outfitted people started showing up at the White House, and by the time the action ended, on September 2nd, more than a thousand had been arrested at the front gate for trespassing.

Still, the protesters didn’t feel that they were being taken seriously, so, as the last of them were being handcuffed and led away, McKibben met across the street with a senior White House official. He said that although the environmental movement had supported the President, wherever he went now demonstrators would be there, too. “We’re not going to do you the favor of attacking you,” he said. “We’re going to do the much more dangerous thing of saying we need to hear from the Obama who said those beautiful things in the campaign. We expect him to do what he promised.” In other words, where the Tea Party took inspiration from the Revolution, the anti-pipeline activists would draw from “Lysistrata”; instead of going to war against the President, they threatened to get out of bed with him unless he shaped up. Knowing that Obama wanted their support in 2012, they would attract his attention by playing hard to get.

In the following weeks, while the President was on his jobs tour, he was confronted at practically every stop by people wearing Obama buttons and carrying signs that quoted him saying that we can “be the generation that finally frees America from the tyranny of oil.” Major environmental groups, who had been working against the pipeline from the beginning—among them the Sierra Club, Friends of the Earth, and the Natural Resources Defense Council—led a broader campaign. Volunteers swarmed Obama campaign offices in almost every state, and placed calls to the finance chair of the Democratic National Committee. Ranchers and indigenous people—cowboys and Indians—whose lands would be affected united in opposition at public hearings. Nobel laureates denounced the project. The Republican governor and both senators from Nebraska, whose vulnerable water supply stood to be crossed by the pipeline, sided against it. So did the Dalai Lama. Meanwhile, the environmental movement was not without its own deep-pocketed heavy hitters, who now played an inside game: some Democratic funders, like Susie Tompkins Buell, the founder of the Esprit clothing company, signalled that they would withhold support from the President’s reëlection campaign.

On November 6th, exactly a year before the election, the protest returned to Washington. This time, twelve thousand people encircled the White House. President Obama was reportedly out, playing golf, but the message evidently got through to him. Four days later, he issued a statement saying that the decision on the pipeline permit would be delayed until at least 2013, pending further environmental review. In addition, in response to claims of conflict of interest, the State Department’s inspector general launched an investigation into the permit process. Since then, TransCanada, which previously insisted that no other pipeline route was feasible, has announced a new route through Nebraska. “There are no final victories in a fight like this,” McKibben acknowledged.

Yet the Occupy movement could do worse than to learn from the pipeline protest. The difference between the focussed, agenda-driven campaign fought by the environmentalists and the free-form, leaderless one waged by the Occupiers, the historian Michael Kazin says, is that the environmentalists grasped the famous point made by Dr. King’s political forebear, Frederick Douglass: “Power concedes nothing without a demand. It never did and it never will.” ♦

Football and Food

2011-12-07T05:31:00.000-08:00

The "free market" crowd has been in high dudgeon for the last few weeks. First applauding the Federal Government's moves to dismantle the "one desk" marketing role of the Canadian Wheat Board for wheat and barley, and now exposing the "price fixing for their friends" activities of the supply management marketing boards. In both cases the benefits of the "free" market are held up as the better alternative for everyone.

Question: Is there anything more red meat, capitalistic, money making, market oriented than the National Football League? It generates billions of dollars, is watched by hundreds of millions of people, and is more American than apple pie. BUT what really makes it work? Why is a team from little Green Bay Wisconsin able to win a Superbowl, and is well on its way to winning another, when other teams from much bigger markets flounder? How can Green Bay afford to pay the big salaries of the talented players on their roster, who can go elsewhere, to a bigger market where the money should be better? (That's how a free market is supposed to work) Why is the league so competitive that almost every fan in every city feels they have a chance at winning a playoff berth at the beginning of the year, when that can't be said in hockey or baseball? Two words: revenue sharing.

It started with the creation of the American Football League in 1959, but new NFL commissioner Pete Rozelle quickly introduced it to the NFL in 1961. He cleverly got the 3 U.S. television networks to bid up the price for carrying NFL games (now worth billions), and convinced some very reluctant owners that the league would be better off to split this television revenue evenly between all teams, big and small, and this principle survives to this day. That's why Green Bay can compete with the New York's and Chicago's, and that's why NFL fans are so devoted to their teams, they really do have a chance to be successful year after year.

OK Petrie what the hell does this have to do with food?

When you look at the Canadian Wheat Board, the marketing principle is that all wheat and barley grown by farmers large and small is pooled under one roof (figuratively). Sales people benefit from larger marketing clout (some reports say this has meant a billion dollars a year more revenue), and this money is then shared equally amongst all participating farmers, based on the volume of their shipments. There are producers who farm close to the U.S. border who could make more money selling to American mills in spot markets, and will now get their chance to do that. It's the smaller farmers further away from large markets who will lose out (think Green Bay).

Supply management has some of the same principles: a regulated system that carves out a certain market share, and assures farmers a fair price, and gives many more people a chance to succeed, not just farms close to large population centres.. As I've written about many times, Maritime farmers have become slightly uncompetitive in "free-market" commodities. They face higher feed and energy costs, pay more money to get their goods to the big consumer markets in Central Canada. Supply management on the other hand has kept farmers in this region competitive, and is more important to maintaining some profitability in Maritime agriculture than most of us realize.

So when Greenbay wins another Superbowl next month, just remember that it wasn't thanks to the "free market", but something most Americans, and business writers in Canada's national press, would say is heresy. Sharing wealth? That's socialism isn't it??

Let the People Speak

2011-12-05T04:55:00.000-08:00

When the broadcast consortium that organized the Leaders Debate in the last federal election was looking for a host with talent and credibility, it chose Steve Paikin. Paikin is the regular host of a program called the Agenda on TV Ontario. TVO is a kind of hybrid broadcaster, somewhat like the CBC because of some government funding and an educational/cultural mandate, and partly PBS because it does separate fundraising as well.

I have a lot of respect for Paikin and what the Agenda tries to do. It's not afraid to load up the set with smart people, and led by a competent host, tackle some complex subjects. (the BBC does this well too).

The Agenda had a go with the debate over the future of supply management the other night, and while it missed a couple of important points in my view, it was as good a discussion as you'll get. It took the time to discuss the history of the marketing boards (always important in my view), and expose some of the hypocrisy of the Americans when it comes to trade. (the U.S. allows fewer dairy product imports than Canada does). I think it missed the environmental consequences in New Zealand of developing an export oriented business based on cheap milk (google: dirty dairying-new zealand), but there was new information to me that consumers in New Zeland pay more for milk than Canadians do. And the other point is that there are just a few farm products here where the supply really can be managed properly. Anything grown outside is linked to the vagaries of the weather, and yields fluctuate year by year, that's why grain and vegetable growers couldn't even consider the marketing scheme.

Here's the link to the program: http://ww3.tvo.org/video/168633/food-and-market

Meanwhile the Globe and Mail commentators (Jeffery Simpson this time) continued their relentless trashing of supply management: http://www.theglobeandmail.com/news/opinions/jeffrey-simpson/it-hurts-dancing-to-supply-managements-tune/article2257216/comments/

What was just as revealing were the comments of readers to Simpson's commentary. A sample here:

ERB60
Forget everything else, I would end supply management simply because it is stupid and serves no real purpose. Why are a couple of farm groups singled out for this practice and the rest of the economy faces the open market. It is just dumb.

dorfarm11
There are a few inconvenient truths that Mr Simpson overlooks, I suspect in part because he hates rural Canadians. If you remove supply management, dairy and poultry producers will have to sell their produce to oligopalistic or monopolistic entities. Can you honestly argue that a functioning "marketplace" would exist with thousands of sellers to only one or two buyers?
Producing milk is not like producing widgets--cows don't come with an "on/off" switch.

Tony Kwan8
Mr. Simpson takes it as a given that supply management is an evil without any benefits and therefore not worth protecting, particularly if it compromises Canada's chances of entering into a new free trade pact.

Perhaps a few issues are worth pondering first.

One, given the strength of the farm lobby in the U.S., it seems very unlikely that the Americans will end their heavy subsidies to agriculture. So, why then would it be acceptable for them to remain in effect protectionist but not for us to do the same?

Two, are we to regard Canadian farmers as disposable and/or obsolete pieces of machinery? Mr. Simpson doesn't seem to think there are any social or adjustment costs to be considered.

Three, favouring local food production means much lower transportation costs and, therefore, a much smaller carbon footprint.

Four, should we pay such short shrift to food security/sovereignty?

bobs1
It seems to me most people on this board are losing site of the real costs of supply management. The few farmers involved are hurting the chance of millions of Canadians to benefit under this free trade deal. The government has to eliminate this gross trade restriction before we lose our chance for added trade in the Pacific.

Ron Conway
Farmers in Ontario receive about .45 cents for a litre of whole milk( similar in butterfat that you
get in a 3.25% homo bag) delivered to the dairy. This means that the dairy pays the farmer
$1.80 for the 4 litre bag of homo milk that sells for $5.60 retail- Why is everyone worrying about what the farmer is paid- Worry about the profit the dairy or the store is making.

Bikie
If the price of membership in the TPP is lower prices on milk, cheese, eggs, turkey and pork, I am all for it!

suthainn
Supply management forces consumers to pay more for their eggs, chicken and milk products at the retail level. This will not cost the gocernment more... that is a good thing....it will reduce food prices.... that is a good thing. The producers left in the dairy and poultry industry will expand and continue making money as they no longer need to purchase expensive quota.

win-win-win

Of course in the end it will be the judgement and negotiating skills of Steven Harper's government (that's what he wants it called right??) that will determine what happens. There's no doubt that New Zealand and the U.S. want an end to the import controls used to maintain supply management, and if Harper starts talking about "consumer freedom", then we'll know the jig is up. Bottom line for me: they'd better negotiate smart, not the ham handed way they deal with most issues.

Follow the Money Part 3

2011-12-01T03:49:00.000-08:00

There's a clear linkage (better understood in Europe where many starved during the Second World War) between national sovereignty and food production. It's one reason governments everywhere have a hand in the business of agriculture. In most developed countries (Europe for the reason stated above, and the United States for other reasons -put Earl Butz in the search engine below), there are huge transfers of public funds to promote production of certain commodities, and most often benefit the big and already rich (whether they fall into the 1% I'm not sure, but they're up there).

Canada does have "risk management" programs like crop insurance, and disaster relief, but also has something else that's under ferocious attack at the moment: supply management. Anyone who reads the blog knows I do support supply management with all of its flaws (the high price of quota being the worst). One of the reasons I like it is that farmers get a much fairer share of the consumer dollar, and that consumer dollar is the only source of revenue for dairy, poultry and egg producers, there's no other taxpayer contribution coming from government like there is for corn, feedgrains, sugar, etc in the U.S., and as we'll see in Europe.

For understandable reasons Canada wants a seat the what's called the Trans-Pacific Partnership trade talks, and for the first time ever a Canadian Prime Minister has indicated a willingness to alter/abandon supply management to get it. National business columnists sound like Mr. Spock in a Star Trek episode, that the interests of the few (12 thousand farmers) must be sacrificed for the interests of the many (the rest of us).

Two recent items to consider: one a very convincing defense of supply management by the current president of the PEI Federation of Agriculture, and the second a blistering piece about how perverse agricultural subsidies can be. There are a lot of reasons for Canadians to take a breath, and think about which system works better.

http://www.theguardian.pe.ca/Opinion/Letters-to-editor/2011-11-23/article-2811939/Dont-sacrifice-a-system-that-works/1

Don't sacrifice a system that works

By Bertha Campbell
Commentary
Over the past few weeks I have been astounded to hear that supply management will be ‘on the table' in Canada's upcoming trade negotiations. I can't help thinking that our prime minister is being reckless with Canadian agriculture, with the livelihoods of Canadian farm families, but most of all, he is tampering with a decades-old system which I believe is a model for sustainability.
We are at a time in history when we are realizing that in order for life to be sustainable on this planet, we must use less, waste less, pollute less, consume less, etc. We are all being encouraged to do things that are not just economically sustainable but also environmentally and socially sustainable as well. This is known as ‘the triple bottom line'.
Our 40-year-old supply management system for dairy, egg and poultry farm products is a system that I believe does take into account ‘the triple bottom line'. The following bullets help to demonstrate that supply management in its design has many attributes that improve our environmental, economic and social sustainability.
• The principle of supply management is that we focus on our own domestic market, and that supply is matched to demand. We don't overproduce causing waste in society, as is the case in some countries that have subsidies and other schemes that lead to overproduction.
• We stay within our borders and don't dump oversupply into other countries, including developing nations, causing them economic woes by distorting their markets.
• -We don't transport our products half-way around the world, thus acknowledging that ‘how food is shipped and handled' can be as important from a sustainability point of view, as how it is produced.
• Many of our dairy-processing businesses in the Atlantic region are structured as co-operatives, and co-operatives have an inherent set of values that guide them to consider people and environment (workers, members, communities) as well as the economic bottom line.
• Society has the secure knowledge that our dairy and poultry products are safe, because they were produced in our own backyard by Canadian farmers under stringent regulations.
• Supply management ensures that our Canadian farmers will get a fair return for their labours because the price they receive is established according to a cost of production formula. This helps to ensure stability on the farm, and thus sustainability of our country's food supply. It also means that farmers are able to achieve their returns from the marketplace, not from taxpayers' dollars.
• The cost of production formula also ensures that consumers never pay more than the documented cost of production, allowing predictability and fairness in pricing for the shopping public.
Remembering that natural resources are not limitless, we must consciously choose to do things that help to minimize the impact we have on our world. As shown above, supply management seems to be a good fit for living more sustainably. It is a system more focused on conservation, self-reliance and food security, and less inclined towards unlimited growth and over consumption.
If you agree, let's be sure to let our politicians know that we believe supply management makes our country ‘greener'. Our federal politicians need not succumb to pressure from other world powers; those countries may simply be ‘green' with envy.
Bertha Campbell is president of the P.E.I. Federation of Agriculture.

http://www.monbiot.com/2011/11/28/big-farmer/

Big Farmer
Nov. 28, 2011

The poorest taxpayers are subsidising the richest people in Europe: and this spending will remain uncut until at least 2020.

By George Monbiot. Published in the Guardian 29th November 2011

What would you do with £245? Would you a. use it to buy food for the next five weeks?, b. put it towards a family holiday?, c. use it to double your annual savings?, or d. give it to the Duke of Westminster?

Let me make the case for option d. This year he was plunged into relative poverty. Relative, that is, to the three parvenus who have displaced him from the top of the UK rich list(1). (Admittedly he’s not so badly off in absolute terms: the value of his properties rose last year, to £7bn). He’s the highest ranked of the British-born people on the list, and we surely have a patriotic duty to keep him there. And he’s a splendid example of British enterprise, being enterprising enough to have inherited his land and income from his father.

Well there must be a reason, mustn’t there? Why else would households be paying this money – equivalent to five weeks’ average spending on food and almost their average annual savings (£296)(2) – to some of the richest men and women in the UK? Why else would this 21st Century tithe, this back-to-front Robin Hood tax, be levied?

I’m talking about the payments we make to Big Farmer through the Common Agricultural Policy. They swallow €55bn (£47bn) a year, or 43% of the European budget(3). Despite the spending crisis raging through Europe, the policy remains intact. Worse, governments intend to sustain this level of spending throughout the next budget period, from 2014-2020(4).

Of all perverse public spending in the rich nations, farm subsidies must be among the most regressive. In the European Union you are paid according to the size of your lands: the greater the area, the more you get. Except in Spain, nowhere is the subsidy system more injust than in the United Kingdom. According to Kevin Cahill, author of Who Owns Britain, 69% of the land here is owned by 0.6% of the population(5). It is this group which takes the major pay-outs. The entire budget, according to the government’s database, is shared between just 16,000 people or businesses(6). Let me give you some examples, beginning with a few old friends.

As chairman of Northern Rock, Matt Ridley oversaw the first run on a British bank since 1878, and helped precipitate the economic crisis which has impoverished so many. This champion of free market economics and his family received £205,000 from the taxpayer last year for owning their appropriately-named Blagdon Estate(7). That falls a little shy of the public beneficence extended to Prince Bandar, the Saudi Arabian fixer at the centre of the Al-Yamamah corruption scandal. In 2007 the Guardian discovered that he had received a payment of up to £1bn from the weapons manufacturer BAE(8). He used his hard-earned wealth to buy the Glympton Estate in Oxfordshire(9). For this public service we pay him £270,000 a year(10). Much obliged to you guv’nor, I’m sure.

But it’s the true captains of British enterprise – the aristocrats and the utility companies, equally deserving of their good fortune – who really clean up. The Duke of Devonshire gets £390,000(11), the Duke of Buucleuch £405,000(12), the Earl of Plymouth £560,000(13), the Earl of Moray £770,000(14), the Duke of Westminster £820,000(15). The Vestey family takes £1.2m(16). You’ll be pleased to hear that the previous owner of their Thurlow estate, Edmund Vestey, who died in 2008, managed his tax affairs so efficiently that in one year his businesses paid just £10. Asked to comment on his contribution to the public good, he explained, “we’re all tax dodgers, aren’t we?”(17).

British households, who try so hard to keep the water companies in the style to which they’re accustomed, have been blessed with another means of supporting this deserving cause. Yorkshire water takes £290,000 in farm subsidies, Welsh Water £330,000, Severn Trent, £650,000, United Utilities, £1.3m. Serco, one of the largest recipients of another form of corporate welfare – the private finance initiative – gets a further £2m for owning farmland(18).

Among the top blaggers are some voluntary bodies. The RSPB gets £4.8m, the National Trust £8m, the various wildlife trusts a total of £8.5m(19). I don’t have a problem with these bodies receiving public money. I do have a problem with their receipt of public money through a channel as undemocratic and unaccountable as this. I have an even bigger problem with their use of money with these strings attached. For the past year, while researching my book about rewilding, I’ve been puzzling over why these bodies fetishise degraded farmland ecosystems and are so reluctant to allow their estates to revert to nature. Now it seems obvious. To receive these subsidies, you must farm the land(20).

As for the biggest beneficiary, it is shrouded in mystery. It’s a company based in France called Syral UK Ltd. Its website describes it as a producer of industrial starch, alcohol and proteins, but says nothing about owning or farming any land(21). Yet it receives £18.7m from the taxpayer. It has not yet answered my questions about how this has happened, but my guess is that the money might take the form of export subsidies: the kind of payments which have done so much to damage the livelihoods of poor farmers in the developing world.

In one respect the government of this country has got it right. It has lobbied the European Commission, so far unsuccessfully, for “a very substantial cut to the CAP budget”(22). But hold the enthusiasm. It has also demanded that the EC drop the only sensible proposal in the draft now being negotiated by member states: that there should be a limit to the amount that a landowner can receive(23). Our government warns that capping the payments “would impede consolidation” of landholdings(24). It seems that 0.6% of the population owning 69% of the land isn’t inequitable enough.

If subsidies have any remaining purpose it is surely to protect the smallest, most vulnerable farmers. The UK government’s proposals would ensure that the budget continues to be hogged by the biggest landlords. As for payments for protecting the environment, this looks to me like the option you’re left with when you refuse to regulate. The rest of us don’t get paid for not mugging old ladies. Why should farmers be paid for not trashing the biosphere? Why should they not be legally bound to protect it, as other businesses are?

In the midst of economic crisis, European governments intend to keep the ultra-rich in vintage port and racehorses at least until 2020. While inflicting the harshest of free market economics upon everyone else, they will oblige us to support a parasitic class of tax avoiders and hedgerow-grubbers, who engorge themselves on the benefactions of the poor.

A Better Conversation

2011-11-27T07:26:00.000-08:00

Some time in the next few months Islanders will once more be thinking about fish kills. In mid July thousands of dead fish were found in three rivers in Western PEI. It was the most serious fishkill in recent memory and very troubling to many. Traces of pesticide were found in samples taken from the rivers. One farmer Avard Smallman has already pleaded guilty to a buffer zone violation and will be fined. Warren Ellis is the other farmer charged under the Environmental Protection Act. He will go to trial, or possibly reach a plea agreement first, in the next few weeks.

The fact that there were violations of the fifteen meter buffer regulation was a great relief to many in the farming community. If there hadn't been, then the critics of a fifteen meter buffer would have the ammunition to call for even stricter rules.

If there was anything positive to be taken away from this very disturbing incident, it's this: despite many heavy rain days, there were no fishkills in the majority of the province's watersheds. In a handful, there's been a conscious effort not to just follow the law, but do more. Here's a story I wrote a few months ago about an inspiring group of people in Eastern PEI. I think there are good lessons for us all in their experience.

Souris Watershed: A Rare Success or a Model for the Future

It took months of meetings, a lot of trust, and a heavy dollop of government money, but people in a large area of Eastern PEI are part of the most successful effort ever in the province to collectively protect and improve water resources.

It started with a series of public meetings through the Fall and Winter of 2005-2006. The two linchpins of the meetings were to speak honestly about the serious environmental degradation in the watershed, and just as importantly, to not lay blame, but figure out who had to do what to make things better.

The area’s farmers knew they’d be fingered by most as the cause of the problems, so they initially went to these meetings more to protect their interests than anything else. “I think farmers were really scared of having the community tell them what was going to happen.”   Bear River farmer Kevin MacIsaac was one of the area’s farmers who was at these community meetings. “I think there was some fear in the room, and that was probably a reason to get more proactive, but that fear went away fairly quickly once everyone was in the room and talking about common goals.”

Retired school teacher Fred Cheverie agreed to be the coordinator for the meetings. “Once farmers understood that we weren’t trying to shut them down, but work with them, then people starting talking. I think the greatest thing to come out of it was the respect people developed for each of the industries.”

The Souris watershed had all the problems common to watersheds around the province: fish kills from pesticide run-off, high bacteria counts from poor manure handling, serious soil erosion, and high nitrate levels caused by excess fertilizer leaching into waterways. The nitrates, along with phosphorus, fertilize choking amounts of algae. That’s bad enough, but as the algae dies, bacteria breaking it down use up precious oxygen reserves in the water, weakening and often killing fish and shellfish stocks. So these meetings were made up of people with vastly competing interests, all seeing their livelihoods at stake. It was Fred Cheverie who insisted that the tone remain civil and respectful. He says it was the only way to move forward. “When farmers get respect, and they in turn respect the organization, things go a lot smoother.”

Respect is not something many Islanders feel towards farmers. The media dwells on the serious financial problems facing agriculture during the fall and winter, and environmental concerns the rest of the year. These same Islanders generally want to see a lot more sticks rather than carrots used to get farmers to take environmental protection seriously.

Without really knowing it, the community used concepts developed for what’s called “conflict resolution”. It essentially states that the default position for most people is to only see the differences between themselves and others, and to argue what these “others” are doing wrong.   Conflict resolution theory suggests looking for common “interests” instead, in other words the goals that various groups can agree on. This requires time and trust, and the Souris Wildlife Federation used both.

“Go slow, take your time, make sure everyone understands everything, be up front, never make a promise you can’t keep, simple stuff, common sense” says Fred Cheverie. “You have to remember that the bulk of the land is owned by farmers, so you’re going to have to work with them, you’re going to have to get along with them.”

Farmer Kevin MacIsaac says Fred Cheverie’s stature in the community was critical. ”Everyone has respect for him. He’s seen the farming side, he’s also a fisherman and a hunter, and a wildlife person, so people knew he would be able to recognize both sides. Some of the people from wildlife and the watershed, they were just looking for ways to improve things, and that’s all we were too. It was important to get it all on the table, rather than have people walking behind each other and laying blame.”

This process had one other critical component, money, but that came only after the community had done the heavy lifting of developing a comprehensive watershed plan that almost all stakeholders committed to. (there was some money, available to any community, for coordination and costs for these early meetings).

This was the first time on PEI that governments used public funds to compensate farmers for taking steps beyond what the law requires, to protect water resources. At the time it had the awkward name “ecological goods and services”. Now it’s referred to something a little easier, Alternate Land Use Services, better known as ALUS. Here are some examples of land use practices that get small per hectare payments: retiring sensitive land by expanding buffer zones and grassed headlands, retiring high-sloped land, taking additional steps to prevent soil erosion.

Taxpayers may wonder why farmers need to be paid to do things that should be the law, or their civic duty at least. This is where the farm financial crisis comes in. There are increased demands for food safety and environmental protection, but no mechanism for farmers to recover these higher costs out of the market. In fact over the last decade debt levels on most farms have increased yearly, and are now at record levels. It’s instructive to look at how other jurisdictions view public money going to farmers who protect the environment.   This is from the European Commission which spends $53 billion euros a year supporting agriculture. Farms in France for example get more than thirty thousand dollars a year for taking minimal steps to protect the environment. Farms on PEI get a few hundred dollars at best.

“European Union farmers benefit from income support for supplying the kind of public goods which cannot be provided purely by the market – environmental protection, animal welfare, highquality and safe food. European Union standards in these areas are amongst the highest in the world. As a consequence, producing food in Europe is more expensive than in countries where such standards are not obligatory.
As high-cost producers of food, European farmers would find it very difficult to compete
against farmers in other countries without public support. Indeed, as the impact of climate change increases, the cost of sustainable farming is only likely to rise.”

The Souris Watershed has become the poster child of co-operation between farmers and other interest groups. It’s been rewarded with a lot more government support than other watersheds in the province, more than half a million dollars for the initial two year project (most coming from the Federal government), then in June almost a million dollars to conduct research to quantify the impact of changing farming practices. (Government departments and university researchers will get this money, not farmers). This new research will look at the impact of fall versus spring plowing. Many farmers worry that if they don’t plow sod in the Fall, that a rainy Spring might put them weeks behind planting their crops. But there are serious environmental consequences linked to Fall plowing: land is bare through the winter, and that can mean considerable soil erosion. As well, researchers worry that the nitrogen in a sod/hay crop that’s plowed in the Fall will add to the already high nitrate load in this and other watersheds. Some are hoping that if Spring plowing releases enough nutrients from the sod that can then be utilized by the cash crop and cut down on the need for expensive fertilizer, that farmers will be given one more good reason to keep the plow in barn in the Fall.

It’s taken decades for the many environmental problems in the Souris watershed and elsewhere to develop. There have been numerous studies, Royal Commissions, new regulations, government threats and promises, but little tangible evidence that things are getting better. Throw in a lot of defensiveness, even hostility from primary producers that non farmers just don’t understand that fewer and fewer of them are expected to produce huge quantities of cheap food, and the challenges just get bigger.

The Souris watershed experience offers the best example for breaking this logjam. The trouble is there aren’t a lot of Fred Cheveries around the province who command the respect of people in the community, and have the time, patience and inclination to take on months of meetings. And there certainly aren’t the financial resources that Souris enjoyed because it was the first to see this process through.

There is a lot of evidence that public resources should be used to fairly cover the additional costs farmers take on to protect water resources, but this is a public expenditure that’s competing against many others during a time of restraint and cuts.

But there are other lessons from Souris that communities can draw on, that trust and respect are needed to move forward, and at least neither of these cost any money.

Something Else You Can't Count On

2011-11-23T14:39:00.000-08:00

Fair trade was always one of those rock solid programs that allowed me to shop and buy with a clear conscience. The idea is simple and powerful: products with the fairtrade logo are produced sustainably by farmers and producers who are paid fairly. In other words a fairer share of my dollar goes to the person who produced the product, not to a long list of middle people who grab most of the cash in a normal marketing chain. Over the years larger processors and retailers have gotten into the fairtrade game. These bigger companies mean more producers will benefit, so it's got to be a good thing. Right??
Now we learn that one fairtrade organization (it won't surprise you which one) wants to change the rules. Big companies like to deal with big suppliers. They feel assured they can get the consistency of supply and quality they're looking for, but it often leaves small producers unable to participate. We're not there yet, but this looks like an unfortunate first step.

http://www.nytimes.com/2011/11/24/business/as-fair-trade-movement-grows-a-dispute-over-its-direction.html?_r=2&hpw

As Fair Trade Movement Grows, a Dispute Over Its Direction

By WILLIAM NEUMAN

A tempest in a coffee pot is bubbling in the world of “fair trade,” the socially responsible food movement that seeks to lift farmers in the developing world out of poverty by offering them a premium for crops like coffee, cocoa and bananas. And the fight will soon reach your local Starbucks, Wal-Mart and Whole Foods.
Fair Trade USA, the movement’s leading advocate in the United States, angered critics by saying it would cut its ties at year’s end with the main international fair trade group and make far-reaching changes in the sorts of products that get its seal of approval.
The changes include giving the fair trade designation to coffee from large plantations, which were previously barred in favor of small farms. The group is also proposing to place its seal on products with as little as 10 percent fair trade ingredients, compared with a minimum of 20 percent required in other countries.
The group says the changes will benefit more poor farmers and farm workers around the world and make it easier for large corporations to sell fair trade products. Sales of fair trade goods in 2010 were $1.3 billion in the United States and $5.8 billion globally. Fair Trade USA said it hoped to double sales in the United States by 2015.
Critics accuse Fair Trade USA of watering down standards, perhaps motivated by the bigger fees to be earned from certifying a higher volume of products. Some sellers of fair trade products fear small coffee farmers will lose market share to the big plantations and that companies will have an incentive to include only the minimum amount of fair trade ingredients in their products.
“It’s a betrayal,” said Rink Dickinson, president of Equal Exchange, a pioneer importer of fair trade coffee, chocolate, tea and bananas, based in Massachusetts. “They’ve lost their integrity.”
Paul Rice, chief executive of Fair Trade USA, said the fair trade movement was dominated by hard-liners who resisted needed changes. “We’re all debating what do we want fair trade to be as it grows up,” Mr. Rice said. “Do we want it to be small and pure or do we want it to be fair trade for all?”
He dismissed criticism that his group was seeking to increase revenue for its own sake. “The more we grow volume, the more we can increase the impact” of fair trade, he said.
As part of his efforts to expand the fair trade designation, Mr. Rice is cutting ties between his group and an umbrella organization, Fairtrade International, which coordinates fair trade marketing activities in close to two dozen countries. He said his group paid outsize fees to Fairtrade International — about $1.5 million last year — and received little in return. The international group has also rejected the changes put forth by Mr. Rice.
“The best thing we can do is make sure we’re staying true to the principles that got us to where we are,” said Rob S. Cameron, the chief executive of Fairtrade International. “I’m not going to water those principles down.”
The brouhaha has surprised many companies that sell fair trade products and will soon be forced to take sides. For consumers who pay attention to where their food comes from and how it is produced, the result could be confusion as they try to sort through a proliferation of competing fair trade labels with differing claims.
The logo overload will include a redesigned Fair Trade USA seal; a Fairtrade International seal, which previously did not appear in this country; and labels from smaller programs, like one run by Catholic Relief Services.
Coffee, which Mr. Rice said accounted for more than 70 percent of the fair trade market in the United States, is at the center of the dispute.
Green Mountain Coffee Roasters, which calls itself the largest buyer of fair trade coffee in the world, said that it would continue to work with Fair Trade USA as it sought to increase the amount of fair trade coffee it used.
The company is participating in a pilot project with Fair Trade USA involving a 500-acre organic coffee plantation in Brazil, a farm that previously would have been too large to get fair trade certification.
“Our ongoing commitment to small-scale farmers remains intact,” Sandy Yusen, a Green Mountain spokeswoman, said. “We also believe that Fair Trade USA’s vision presents new opportunities that allow us to impact even more farmers and workers.”
Ms. Yusen said that Green Mountain bought 26 million pounds of fair trade coffee in 2010; in that year, it paid $1.6 million in licensing fees to Fair Trade USA, making it the largest source of revenue for the nonprofit group, according to federal tax filings. The fees are meant to pay the cost of auditing a company’s production to make sure its fair trade claims are accurate.
Starbucks, which has about 11,000 coffee shops in the United States, also said that it planned to continue using Fair Trade USA to certify coffee it sells in this country. However, the company said that it had not decided whether to place a fair trade label on coffee grown on large plantations. Starbucks said that about 8 percent of the coffee used in its global operations came from fair trade farms in 2010, or about 21 million pounds.
Wal-Mart and Whole Foods also sell fair trade coffee and use fair trade ingredients in store-brand products; both companies said they were evaluating the situation.
About two dozen countries have fair trade labeling organizations that license companies to market fair trade products. Fairtrade International provides a uniform logo for use on packaging in most countries.
Most fair trade programs around the world already allow bananas, tea and flowers to be grown on large farms. But traditionally, fair trade coffee and cocoa had to come from small farms organized into cooperatives. The farmers receive a premium for use in community projects, like paying for schools or medical care.
Those poor farmers were once isolated from markets in the developed world and had to sell at a low price. Fair trade organizations help them improve product quality and, most important, give them access to a world market.
Mr. Rice said bringing large plantations into the fair trade sphere would mean that workers on those plantations, whom he called “the poorest of the poor,” could also begin to receive benefits. “We’ve developed a vision for that bigger, better model of fair trade,” he said.
But critics say that large plantations do not need help getting access to major markets, and the small coffee farmers who have been at the heart of fair trade could be squeezed out.
“Starbucks, Green Mountain and other coffee companies will be able to become 100 percent fair trade not because they’ve changed their business practices one iota but because Fair Trade USA has changed the rules of the game,” said Dean Cycon, founder of Dean’s Beans Organic Coffee Company, in Orange, Mass.
Seth Goldman, the co-founder of Honest Tea, said the rift had prompted his company, now owned by Coca-Cola, to take a closer look at the workings of fair trade. He said that in the first 10 months of this year, Honest Tea paid about $51,000 in premiums destined to help farmers or farm workers. At the same time, it paid $37,000 in licensing fees to Fair Trade USA.
Mr. Goldman said he would like to see more money go to help farmers and less to pay administrative and auditing costs.
He said the company would decide in the next few weeks whether it would continue to work with Fair Trade USA or arrange to use the Fairtrade International logo on its products instead.
He called the dispute a mess, but added, “Opening up a can of worms gives us a chance to understand what’s in the can.”

Lots of Cliches, Less Common Sense

2011-11-18T17:18:00.000-08:00

Business commentators have been salivating for years at the prospect of putting the final nail into the coffin of supply management. It's really because of the public disclosure rules in these national marketing schemes that they have large numbers to throw around to make their case. I suspect if the total "goodwill" value of any profession (doctor,lawyer,accountant) were added up, the number would be pretty big too. And on the matter of income note below the fact that because dairy farmers make a middle class wage, and even worse, much more than other farmers, it follows that they're making too much. Back in March I wrote about supply management and the fight that was brewing. First a very smart (normally) National Post commentator who hammered supply management all week, and I re-posted the March piece.

John Ivison

National Post

Don't bet the farm on dairy quotas

Ed Fast was in typical ministerial doublespeak mode. Yes, supply management will be on the table in any forthcoming talks into a potential AsiaPacific free trade deal, the Trade Minister told reporters in the foyer of the House of Commons.
Yes, the Harper government will vigorously defend the protected dairy and poultry sectors.
No, he would not speculate on the outcome of any negotiations.
So if you are a dairy farmer who has borrowed $1-million to buy the quota that gives you the right to send milk to market, you are reassured, right?
There's no way the Conservatives are going to negotiate away the value of your asset, in order to win trade concessions from other countries at the Trans-Pacific Partnership (TPP) talks, right?
Don't bet the farm on it. Personally speaking, knowing the issue is "on the table" would certainly make me less inclined to pay $28,000 for every cow (or at least the right to sell milk from that cow).
The total value of milk quotas in Canada now is a staggering $30-billion, with many farmers deeply in debt, having borrowed the money to enter the industry from banks. That $30-billion would be the cost of compensating all farmers at current values and creating a free market in dairy and poultry products overnight.
That is unlikely to happen. For one thing, the knowledge that the issue is "on the table" is likely to send quota prices south.
For another, were the government to decide it wants an orderly phaseout of supply management, it is far more likely to start issuing new quotas that would lower prices gradually.
In all trade negotiations there are winners and losers - and the losers in this case appear to be the farmers who have racked up debt to buy quotas that may end up being as worthless as Nortel stock.
One farmer told me that for $1-million in quotas, he would typically gross $230,000. With expenses running at about 70%, he is left with $70,000 on which to live and pay down debt.
Those are pretty generous profit margins, compared to the all-farm average, but it will still create a political firestorm if quota values of dairy farmers in Ontario and Quebec are slashed so Western beef farmers can gain access to overseas markets.
One potential solution could be for governments to use the proceeds from new quota sales to help compensate farmers who want to leave the business.
What's increasingly clear is that the writing is on the wall and it was inscribed by Prime Minister Stephen Harper when he accepted President Barack Obama's offer to explore membership of the Trans-Pacific Partnership.
The Dairy Farmers of Canada are one of the country's most powerful lobby groups and will likely fight a noisy and ugly rearguard action. If the government decides to use up its political capital, we can expect to see herds of Holsteins grazing on the lawn of Parliament Hill and ministers being egged by irate farmers.
But trade liberalization appears inexorable, as countries seek to kick-start their economies. Mr. Harper said in the House of Commons he intends to protect supply management at the TPP negotiating table, but the road to most successful free-trade deals is paved with similarly good intentions.
TPP participants such as New Zealand are determined Canada's protected dairy industry is going to be opened up, by dropping tariff levels to zero over 10 to 15 years.
This should be welcomed by Canadian consumers. More imports mean cheaper prices and relief from rates that are more than double those paid in the U.S. for liquid milk, eggs, butter and cheese. It could even prove a boon for efficient dairy farmers, who would be free to export to expanding markets, rather than eking out a living in a shrinking Canadian market.
The time is right for liberalization in the dairy industry. The Conservatives have just fought - and apparently won - a battle with the monopoly Wheat Board to allow farmers to sell on the open market.
If free trade really is a linchpin of the Conservative growth strategy, as Mr. Fast claimed Tuesday, this relic of 1970s command economics will have to go the way of Soviet-style pre-fabricated concrete architecture and rusty tractors.

Petrie

March 5

Supply management in a handful of agricultural commodities in Canada (dairy, eggs and poultry) has the same allure as the designated hitter in baseball. Those that care, care a lot. The rest, not so much.

It's a highly regulated marketing system designed initially to tackle a decades long struggle to stabilize the dairy industry. The first scheme was set-up in 1974 by the godfather of supply management, Eugene Whelan, Minister of Agriculture under Pierre Trudeau. The government had been offering price subsidies to dairy farmers throughout most of the last century, but like the Americans and Europeans now, found that a subsidy, on its own, generally leads to huge surpluses. (see http://www.jstor.org/pss/20001616 if you want to know more.)

Whelan was determined to try something very different: limit the production of milk to what the market demands through the use of quotas , and in return guarantee farmers a fair return. Hence the term supply management. By law the cost of production formula must use the most efficient farmers. Table milk we use on our cereal is given the highest price, milk used for butter the lowest. The government would no longer be involved in propping up the price, it would flow through the dairies to the supermarket, and be paid by consumers. .

To make the system work, Canada had to bring in strict import controls. If say New Zealand butter, or American yogurt was selling for 10% less than Canadian dairy products, the system would quickly break down. Canada uses high tariffs, and other restrictions to keep most, but not all, imported dairy products out.

Many, many dairy farmers hated the idea at the time, sold their herds and went into pork production. Even Trudeau (so the story goes) had to tell the Liberal Cabinet, you may not like what Whelan's going to propose, but we're going to do it anyway.

Whelan later introduced supply management into egg and poultry production. All three benefit from being able to control production through management practices, unlike many other crops which are weather dependent, and production fluctuates year by year.

The business press hated it then, and hates it now. Columnists in the National Post, Globe and Mail, etc. repeatedly argue that Canadians pay too much at the checkout, that supply management only survives because of its importance to the huge Quebec dairy industry, and that it should have disappeared during past trade negotiations like the Americans wanted, but federal politicians didn't have the guts to kill it.

To an economist's eye, supply management is far from perfect. Whelan initially insisted that the quotas would belong to the people of Canada, and be free. Now the piece of paper with the quota contract is the most valuable thing on the farm. Banks allow farmers to use the quota as collateral to borrow money. More on what's wrong with supply management here: http://www.iedm.org/files/fev05_en.pdf

Other people, including myself, think that supply management is similar to what Churchill famously said about democracy: "Democracy is the worst form of government, except for all those other forms that have been tried from time to time."

Yes consumers pay more than what an American does for cheese and chicken, but unlike Americans, as taxpayers, Canadians don't pay again with a subsidy check sent to the farmer in the mail.

There are a couple of other overlooked benefits. A PEI dairy farmer can manage a herd of seventy to a hundred cows and make a reasonable living. A dairy farmer in Maine would need two to three times that number of cows to make the same living. Supply management also leads to a much more even split of the consumer dollar between the farmer, the food processor, and the food retailer. Farmers usually get what's left over from the consumer dollar after everyone else has been paid.

Supply Management has most recently been vilified in the news because Canada has been refused a seat at on-going trade negotiations called the Trans-Pacific Partnership. It's an ambitious trade deal that includes important growing Asian economies. The hangup, those import restrictions on dairy products, but don't forget that Japan too is insisting it has to protect some parts of it farming community as well.

See: http://www.embassymag.ca/page/view/transpacific-01-06-2010

Now maybe there's a small reason that Canadians can get behind supply management. Throughout this week (March 1-5, 2011) there have been many alarming stories about rising food prices. Climate catastrophes in Russia, Australia, Western Canada, are driving up the price of wheat, cooking oil, sugar, and, wait for it, dairy products.

http://www.bloomberg.com/news/2011-03-01/milk-powder-prices-jump-15-4-to-record-amid-asian-demand-fonterra-says.html

But here's the thing. Supply management means dairy prices are established here by domestic rules and regulations, not by international trading forces.

So when you hear (as you will, even on CBC) or read, that dairy prices are going up because of global climate and insecurity issues, you can think, that's not true. When the dust settles it will be interesting to see where Canadian dairy prices are in relation to those on the world market. It might not look so bad. Remember that when you read Terence Corcoran in the National Post, or Jeffery Simpson in the Globe and Mail, and a host of other business writers lecturing about the evils of supply management. They probably stopped thinking about this issue twenty years ago. You can bring them up to date.

And It Continues (See Last Post)

2011-11-15T02:37:00.000-08:00

John Ivison

National Post

Pacific trade talks could bring end of supply management in Canada

Nov. 14, 2011 •

Chris Wattie/Reuters

“Look, Barack, I'm serious. Canada is way bigger than Turks and Caicos.”

OTTAWA — Stephen Harper’s foreign policy has been governed by the desire to remain as friendly as possible with the United States, while still maintaining a fig leaf of self-respect.
In recent weeks, that policy has been called into question, as U.S. lawmakers have made a series of policy decisions – Buy America, the new entry fee for travellers, and the Keystone pipeline delay – that have left the impression that Canada’s clout in Washington is somewhere on a par with Turks and Caicos.
Yet, in Honolulu on the weekend, a remarkable shift in Canadian trade policy took place that may, in part, have been an attempt by U.S. President Barack Obama to mend fences with the Harper government.
At the APEC summit in Hawaii on Saturday, Ed Fast, Canada’s Trade Minister, made some lukewarm noises about this country’s participation in the new Asia-Pacific free trade group that includes the U.S., Australia, New Zealand and six other countries. The resistance to the Trans-Pacific Partnership was blamed on the insistence by some participants, principally the U.S. and New Zealand, that Canada first agree to dismantle the supply management system that puts tariffs on imports of milk, butter and cheese. “We have made it clear that Canada will not pre-negotiate, we believe all of those issues should be discussed at the negotiating table,” said Mr. Fast.
But less than 24 hours later, Mr. Harper was telling reporters that Canada had given a formal indication of interest in joining the TPP “demonstrating our commitment to further deepen trade links in the Asia-Pacific region.” While he defended supply management as “valuable” in fostering a healthy dairy and poultry sector, he said everything is on the table during negotiations.
So what happened to shift opinion? People close to the negotiations said Japan’s decision to explore participation made the difference. While Japanese business is keen to increase its range of free trade deals, the new Prime Minister Yoshihiko Noda is conscious of the opposition that would be created if he granted access to subsidized U.S. and cheap Vietnamese rice.
Since the Americans are keen to bind the Japanese in a trade deal, it seems likely that Japan’s heavily subsidized rice sector will be sheltered, in the same way the U.S. intends to continue to protect its dairy, sugar and peanut producers by introducing a special “liberalization” schedule.
Having carved out an exemption for the Japanese, it looks as though Mr. Obama decided he was in Mr. Harper’s debt and made a similar arrangement for Canadian poultry and dairy, reversing the position of U.S. trade negotiators, who were keen to keep Canada out of the talks.
Peter Clark, one of Canada’s leading trade strategists, said the prospect of Canada joining the talks came up in the discussion between Mr. Obama and Mr. Harper, when the President said he’d like Canada and Mexico to participate. “It was totally unexpected – you’ve got two politicians here trying to make each other look good,” he said. Mr. Harper reciprocated at his press conference in Honolulu when he was asked to comment on the U.S. decision to delay the Keystone pipeline. While he made clear his government’s intention to attempt to diversify the market for Canadian energy exports into Asia, he resisted the urge to take Mr. Obama into the boards. “I think Canadians would be wrong to interpret any of these decisions as against Canada. This is simply political season in the United States and decisions are being made for domestic political reasons that often have little or nothing to do with what other countries may think,” he said.
With the Beyond Borders trade and security agreement likely to be signed by the President and the Prime Minister in early December, this weekend’s development is an affirmation of the Harper government’s prudent policy of reasonable accommodation of the U.S. – progress over the approach of successive Liberal governments, who, in the words of former diplomat Colin Robertson, delighted in “tweaking the beak of the American eagle to underline Canadian independence.”
It’s a good result for the Prime Minister but he is still left with the prospect of dismantling supply management – a system that inflates prices for Canadian consumers and flies in the face of everything else he believes in. Pre-negotiated reform may be off the table but concerted opposition remains among the other nine or so participating countries.
There will be pressure on Canada to phase out protection of the dairy and poultry industries over time and Mr. Harper’s decision to participate in the TPP talks may signal the slow death of supply management, regardless of the assurances to the contrary given in the House of Commons.
A free trade deal that includes the NAFTA countries and Japan is a glittering prize worth potentially billions of dollars, not least for Canada’s beef producers. The country’s economy cannot be held to ransom by 12,000 dairy farmers.

Now It Begins

2011-11-14T02:52:00.000-08:00

I've written a lot about supply management (there's a search box at the bottom of the page). It's given egg, poultry and dairy farmers considerable stability. Prices are slightly higher than the U.S., but taxpayers/consumers only pay once, unlike what happens in the U.S. and Europe where government support is required. Dairy exporters like New Zealand and the EEC would love to crack open the import controls necessary to make supply management work, and want to use negotiations for a new trade deal to accomplish this. This is from a business publication:

"The Trans-Pacific Strategic Economic Partnership Agreement, or TPP, began as a four-country Pacific free trade agreement that came into force in 2006. Initially it encompassed only New Zealand, Chile, Brunei and Singapore. However, those countries want to expand to more markets. Canada could have joined years ago, but has so far remained on the sidelines while its major competitors jump on board."

The hang-up for Canada joining these talks: Canada's defense of supply management. Over the weekend that changed.

http://news.nationalpost.com/2011/11/13/canada-wants-to-join-u-s-and-asia-pacific-region-free-trade-deal-harper/

Canada to strike new U.S. and Asia-Pacific region free trade deal: Harper
Nov. 13, 2011 •

By Jason Fekete

HONOLULU — Prime Minister Stephen Harper announced Sunday Canada will apply to join a new free trade agreement with the United States and the Asia-Pacific region, and suggested that Canada’s farm supply management systems could be on the table for negotiation.

Mr. Harper also said Canada will look further into selling its oil and gas to Asian countries due to U.S. delays in approving the Keystone XL pipeline.

Mr. Harper, who met U.S. President Barack Obama over lunch on the fringes of the Asia-Pacific Economic Cooperation summit in Honolulu, said Canada will formally ask to join the emerging Trans-Pacific Partnership trade group of nine Asia-Pacific countries.

A handful of countries in the TPP negotiations — including possibly New Zealand and the United States — have been resisting Canada’s entry into the group because of the Canadian supply management system that protects fewer than 20,000 dairy and poultry farmers behind a tariff wall and hands them production quotas.

The Conservative government has repeatedly said it will strongly defend Canada’s supply management system and that it wasn’t yet in the country’s interest to join the trade group — something reaffirmed Saturday by International Trade Minister Ed Fast.

But Sunday, Mr. Harper stressed his government now wants into the TPP, currently being negotiated among the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. He said he was informed that Mr. Obama has asked for Canada to join the trade agreement.

The Prime Minister said Canada can “easily meet” the broad strokes of the agreement unveiled Saturday by Mr. Obama, even if it means throwing into the mix a supply management system that forces Canadians to pay higher prices for products like milk, cheese, chicken and eggs.

“It has been told to me that President Obama, in fact, was very strong indicating that he would like to see Canada join the Trans-Pacific Partnership. We are indicating today our formal intention, we’re expressing formally our willingness to join the Trans-Pacific Partnership,” Mr. Harper said.

“We will make an application and I am optimistic we will participate in the future,” he added. “Whenever we enter negotiations, as we’ve done in the past with other countries, as we’re doing right now with Europe, we always say that all matters are on the table. But of course Canada will seek to defend and promote our specific interests in every single sector of the economy.”

Japan announced Friday it was entering negotiations into the TPP and appears willing to dismantle some of its tariff walls for rice and grain farmers.

The prime minister met Mr. Obama later amid a growing number of cross-border irritants, including the Keystone XL, Buy American provisions, the Beyond the Border initiative and new $5.50 travel surcharge to the United States.

Mr. Harper said he’s disappointed with the Obama administration’s decision to delay a ruling on the TransCanada Corp.’s Keystone XL pipeline and consider rerouting it, but believes the project will proceed because it’s critical for both the Canadian and American economies.

“We are disappointed. Nonetheless, I remain optimistic that the project will eventually go ahead because it makes eminent sense, and I would also point out, I think it’s important to note that there has been extremely negative reaction to this decision in the United States because this pipeline and this project is obviously what’s in the best interests of not just the Canadian economy but also the American economy,” Harper said.

“I do think as well though — and I think this is important to say — this does underscore the necessity of Canada making sure that we’re able to access Asian markets for our energy products and that will be an important priority of this government going forward and I indicated that (Saturday) to President Hu of China.”

The Obama administration announced Thursday it is delaying a final ruling on Keystone XL oil sands pipeline until after the November 2012 presidential election while the government looks to reroute it. The $7-billion Keystone XL would carry up to 830,000 barrels of oil per day from northern Alberta to refineries on the Gulf Coast of Texas.

The U.S. State Department said it’s ordering a new review of the project aimed at rerouting Keystone XL around sensitive ecosystems along its proposed path through Nebraska.

Canada’s ticket to selling its petroleum to Asia is Enbridge Inc.’s $5.5-billion Northern Gateway pipeline, which would ship oil sands bitumen from northern Alberta to a marine facility in Kitimat, B.C., where oil would be unloaded onto tankers for export.

The broader goal of the TPP is to create a tariff-free region and members view it as a critical multilateral agreement, especially with the ongoing troubles from the Doha Round of World Trade Organization negotiations.

Mr. Obama said Saturday he’s “confident” the TPP members can complete the free-trade agreement, hopefully within a year, and have it serve as a model for future pacts.

Mr. Harper, meanwhile, downplayed perceived strains in the Canada-U.S. relationship — be it on Keystone, Beyond the Border or Buy American — blaming domestic American politics for the decisions.

“Remember, not all these things are final decisions. I think Canadians would be wrong to interpret any of these decisions as against Canada,” Harper said. “This is simply the political season in the United States and decisions are being made for domestic political reasons that often have little or nothing to do with what other countries may think.”

He said negotiations on Beyond the Border — a bilateral trade and security agreement designed to better co-ordinate intelligence sharing and streamline cross-border trade — are going well and that he’s optimistic “a very strong program” will come out of it, with an “announcement in the very near future.”

A working group conducted public consultations on the measures and has completed a 30-point action plan. The Harper government originally said the plan would be ready by the end of summer, but details still haven’t been unveiled.

Other cross-border issues include the new $5.50 surcharge on Canadians and Mexicans travelling by air or boat to the United States — a move Harper has attacked as a bad policy designed to bail the U.S. out of a huge debt on the backs of Canadians and other visitors.

There has also been some tension between Canada and the U.S. in recent weeks after the White House included new Buy American provisions in Obama’s $447-billion job creation bill that could prevent Canadian companies from bidding on billions of dollars of infrastructure contracts.

The Harper government’s push into Asia-Pacific faces some stiff competition, though, from the United States.

Obama said Sunday, at the beginning of a day of talks with the 21 APEC member economies, that Asia-Pacific is “absolutely critical” to America’s economic growth and meeting his goal of eventually doubling U.S. exports.

“We consider it a top priority because we’re not going to be able to put our folks back to work and grow our economy and expand opportunity unless the Asia-Pacific region is also successful,” Obama said.

What Do You Think of Economics Now?

2011-11-11T07:32:00.000-08:00

It's been called the "dismal" science, and it's not just because the news always seems to be grim. The characterization originally came from a reactionary Victorian "thinker" called Thomas Carlyle. He didn't like progressives of the time like Charles Darwin and John Stuart Mill advocating against slavery. Economists back then were also arguing in favour of equality. So Carlyle wrote this in December, 1849 in a London Monthly called Fraser's Magazine. His article was titled "Occasional Discourse on the Negro Question". Carlyle's view on Economics was that it's "quite abject and distressing...dismal science...led by sacred cause of Black Emancipation."

Now we look to economists to make sense of incredibly complex issues involving enormous sums of money that we really can't comprehend. The new element that has people so freaked out is that sovereign governments, which were always considered a safe bet, are starting to renege on their debts. The logic was that governments have the legal authority to tax (their citizens might not like it), so will always be good for the money they borrow. We're learning that's not the case.

I did take economics at university and remember a teacher who said at it's not so much a science as a confidence game. We have to believe that the pieces of paper and metal we carry around in our pockets have value, and that others feels the same way. It's why when Jim Flaherty speaks publicly you get the feeling that you're getting more of a pep talk from a hockey coach than a serious discussion of the days events. He has to keep us feeling confident that this enterprise we're all a part of will be OK If enough people lose confidence, then you get a run on the banks (although given the debt levels many Canadian families are carrying, it might not be so much a demand for all that's in a savings account, but telling the loans manager you won't be paying back that line of credit.) It was a run on the banks that really precipitated the Great Depression.

Anyone following U.S. politics knows there are libertarians like Ron Paul who argue that once the U.S. (and Canada and other developed countries) went off the gold standard under Richard Nixon, that paper money lost its value. It used to be that the currency in circulation was backed by gold bullion. Now central banks literally print money. Millions of people have benefited from this. (an expanding economy creates jobs and consumption, the risk is inflation, too much money chasing too few goods). Given how gold has soared in value over the last five years, there are a lot of people who think the same way Paul does, that when the dust settles it will be those with gold bullion stored somewhere who will prosper while the rest of us live off root crops, and burn the furniture to stay warm.

The Occupy movement has certainly gives us a little more insight into how people view the dismal science. Many think capitalism itself is beyond repair, while others that the rich and powerful have gamed the system to their advantage, and that's the problem (I don't have any doubt about that).

I admire writers who can take on complex issues and simplify (and be right in my opinion). Here are a couple. There are many others. John Kenneth Galbraith was my touchstone when I was a student. His book on the Great Depression had a real impact on me. There was a section where he wrote about the cruelty of governments not doing anything, demanding austerity to balance budgets. He wrote that there was demand for houses, hammers, nails and wood, people who were good carpenters, all that was missing was money. He argued it didn't make any sense for the government not to provide it. I guess that's why I'm not a libertarian.

http://motherjones.com/kevin-drum/2011/11/why-businesses-love-regulatory-complexity

Corporations Hate Regulation, Until They Love It

by Kevin Drum

•

The "Volcker rule" is a simple thing. Basically, it says that if you're a bank that takes deposits and benefits from federal deposit insurance, you can't also make risky trades that might blow up your bank and cost the taxpayers a bundle. Wall Street never liked the rule, because banks make a lot of their money these days trading for their own accounts and didn't want their trading profits cut off. They fought the idea in Congress, but in the end, the Dodd-Frank bill that passed in 2010 included a version of the Volcker rule in its final draft.
Was this a victory for common sense? Hardly. Last month regulators unveiled their first take on the actual implementation of the Volcker rule, and it had become a monster.¹ "Only in today's regulatory climate could such a simple idea become so complex, generating a rule whose preamble alone is 215 pages, with 381 footnotes to boot," complained American Bankers Association Chief Executive Frank Keating.
Poor banks! But step back for a moment. How did Paul Volcker's baby get so bloated? Keating's crocodile tears aside, the answer is: banks. When it comes to financial regulation, fighting against new laws is merely their first line of defense. When they lose, as they did in the Dodd-Frank battle, the action simply moves to the regulatory agency charged with implementing the law. James Stewart explains what happened next:²

This is probably the biggest reason that no one should take too seriously Republican complaints about burdensome regulations strangling the economy. The truth is that most reformers prefer fairly simple rules. In the tax world, they'd prefer to simply tax all income. In the environmental world, they'd prefer to set firm limits for pollutants. In the financial world, they'd prefer blunt rules that cut off risky activity at its knees.
But businesses don't like simple rules, because simple rules are hard to evade. So they lobby endlessly for exemptions both big and small. This is why we end up with tax subsidies for bow-and-arrow makers. It's why we end up with environmental rules that treat a hundred different industries a hundred different ways. It's why financial regulators don't enact simple leverage rules or place firm asset caps on firm size. Those would be hard to get around and might genuinely eat into bank profits. Complex rules, conversely, are the meat and drink of $500-per-hour lawyers and whiz kid engineers. If the rules are complicated enough, smart lawyers can always find ways around them. And American corporations employ lots of smart lawyers.
Keep this firmly in mind the next time you hear someone from the Chamber of Commerce complaining about how many thousands of pages of regulations they have to comply with. Some of that is inevitable: We live in a complex world, and that means the rules are sometimes complex too. But they don't have to be anywhere near as complex as they end up being. We could have a simple tax code, simple environment rules, and blunt financial regulations. We could probably cut the size of agency regulations by 10 times if we wanted to.
But business don't want to. Sure, they'd prefer no regulation at all, but they know that's not in the cards. So in public they bemoan complexity, but in private they fight endlessly for more of it. To their lawyers, every single extra page is an extra opportunity to make more money.

http://www.nytimes.com/2011/11/11/opinion/legends-of-the-fail.html?ref=opinion

November 10, 2011
Legends of the Fail
By PAUL KRUGMAN

This is the way the euro ends — not with a bang but with bunga bunga. Not long ago, European leaders were insisting that Greece could and should stay on the euro while paying its debts in full. Now, with Italy falling off a cliff, it’s hard to see how the euro can survive at all.

But what’s the meaning of the eurodebacle? As always happens when disaster strikes, there’s a rush by ideologues to claim that the disaster vindicates their views. So it’s time to start debunking.

First things first: The attempt to create a common European currency was one of those ideas that cut across the usual ideological lines. It was cheered on by American right-wingers, who saw it as the next best thing to a revived gold standard, and by Britain’s left, which saw it as a big step toward a social-democratic Europe. But it was opposed by British conservatives, who also saw it as a step toward a social-democratic Europe. And it was questioned by American liberals, who worried — rightly, I’d say (but then I would, wouldn’t I?) — about what would happen if countries couldn’t use monetary and fiscal policy to fight recessions.

So now that the euro project is on the rocks, what lessons should we draw?

I’ve been hearing two claims, both false: that Europe’s woes reflect the failure of welfare states in general, and that Europe’s crisis makes the case for immediate fiscal austerity in the United States.

The assertion that Europe’s crisis proves that the welfare state doesn’t work comes from many Republicans. For example, Mitt Romney has accused President Obama of taking his inspiration from European “socialist democrats” and asserted that “Europe isn’t working in Europe.” The idea, presumably, is that the crisis countries are in trouble because they’re groaning under the burden of high government spending. But the facts say otherwise.

It’s true that all European countries have more generous social benefits — including universal health care — and higher government spending than America does. But the nations now in crisis don’t have bigger welfare states than the nations doing well — if anything, the correlation runs the other way. Sweden, with its famously high benefits, is a star performer, one of the few countries whose G.D.P. is now higher than it was before the crisis. Meanwhile, before the crisis, “social expenditure” — spending on welfare-state programs — was lower, as a percentage of national income, in all of the nations now in trouble than in Germany, let alone Sweden.

Oh, and Canada, which has universal health care and much more generous aid to the poor than the United States, has weathered the crisis better than we have.

The euro crisis, then, says nothing about the sustainability of the welfare state. But does it make the case for belt-tightening in a depressed economy?

You hear that claim all the time. America, we’re told, had better slash spending right away or we’ll end up like Greece or Italy. Again, however, the facts tell a different story.

First, if you look around the world you see that the big determining factor for interest rates isn’t the level of government debt but whether a government borrows in its own currency. Japan is much more deeply in debt than Italy, but the interest rate on long-term Japanese bonds is only about 1 percent to Italy’s 7 percent. Britain’s fiscal prospects look worse than Spain’s, but Britain can borrow at just a bit over 2 percent, while Spain is paying almost 6 percent.

What has happened, it turns out, is that by going on the euro, Spain and Italy in effect reduced themselves to the status of third-world countries that have to borrow in someone else’s currency, with all the loss of flexibility that implies. In particular, since euro-area countries can’t print money even in an emergency, they’re subject to funding disruptions in a way that nations that kept their own currencies aren’t — and the result is what you see right now. America, which borrows in dollars, doesn’t have that problem.

The other thing you need to know is that in the face of the current crisis, austerity has been a failure everywhere it has been tried: no country with significant debts has managed to slash its way back into the good graces of the financial markets. For example, Ireland is the good boy of Europe, having responded to its debt problems with savage austerity that has driven its unemployment rate to 14 percent. Yet the interest rate on Irish bonds is still above 8 percent — worse than Italy.

The moral of the story, then, is to beware of ideologues who are trying to hijack the European crisis on behalf of their agendas. If we listen to those ideologues, all we’ll end up doing is making our own problems — which are different from Europe’s, but arguably just as severe — even worse.

http://www.progressive-economics.ca/2011/11/06/what-do-banks-actually-do-teach-in-with-occupy-toronto/

The Progressive Economics Forum
Nov. 6, 2011 •
Jim Stanford

What do banks actually DO? Create credit out of thin air.

Were Canadian banks bailed-out? Absolutely, to the tune of $200 billion. And they are still protected and subsidized more than any other sector of the economy.

What must be done with these banks? Tax them, control them, and ultimately take them back.

Those are the “take-aways” from a short talk on the banking system that I was honoured to give as part of an Occupy Toronto rally last weekend at the corner of King and Bay in downtown Toronto. Several folks have asked for the written version of my speech, which is posted below.

***********

Well, here we are on Bay Street again, amidst all these gleaming towers, and all this luxury, and power, and affluence.

And what an amazing community we have formed here.

On behalf of the CAW and the CCPA, let me begin by thanking all of you for what you are doing. What you are building. The political and moral space you have opened up through the Occupy movement these past few weeks.

There’s no better place than right here to talk about what’s gone so terribly wrong in our society. About the enormous and immoral contrast between what we see here on Bay Street, and what things are like where most Canadians – the 99% of Canadians – live and work. Down on Main Street.

You already know that, that’s why you’re here. All this nonsense I’ve heard in the last two weeks about the Occupiers being naïve and confused, is so wrong. I have a Ph.D. in economics, and I can assure you that the people in this crowd today know more about economics – more about real economics – than all the stock brokers in these tall towers put together.

You know about work. About production. About sharing. And about sustaining.

They stand around throwing darts at the dartboard, to pick the next stock they’re going to buy. Proving every day that while government may or may not be able to pick winners, they can’t be any worse at it than the stock market is!

Work. Production. Sharing. Sustaining. That’s the basis of real economics, the real job of improving living standards and protecting the environment.

Not throwing darts. Not rolling dice. Not placing bets.

I often think about what goes on inside these towers. The plush offices, the oak paneling, the fine art on the walls, the private dining areas, the clubs and bars.

Not everyone down here works like that, of course. Most of the real work is done by hard-working office workers, who work hard for not much money.

But the ones who call the shots down here, and call the shots for our whole economy, they do very well. Every now and then I get to step inside one of those towers, in the course of my job. Into one of those investment banks. Those private dining areas. Those boardroooms.

The meals, the furnishings. And of course the compensation. Immoral, offensive compensation. All of it tax-deductible.

Then I compare all that to the generally shoddy state of public institutions and facilities in this city. Like the rec centre in my neighbourhood, out in Parkdale. Or the public schools where my kids go to school. Fine, wonderful schools. But underfunded and dingy, to be sure.

Rob Ford said he went to City Hall to stop the gravy train. When I compare public institutions in this city, to these towers here on Bay Street, I know that Rob Ford missed his target by about 3 blocks. He was 3 blocks too far north.

Want to stop the gravy train, Rob Ford? Come down here to stop the gravy train! A gravy train that’s funded with the proceeds of what, ultimately, is just gambling.

Ever since the Occupy movement came to Canada – even before that, actually – there’s been an enormous myth propagated that these guys here on Bay Street – the Canadian banks – did nothing wrong.

Our banks are strong and safe, they say. They were prudent. And they weren’t bailed out.

They pat us on the head, and they say: “Go to Wall Street to have your little protest. But don’t bother protesting here. Because we didn’t do anything wrong.”

Well that’s simply a lie. It’s a bald-faced, empirically refutable lie.

In the first place, Canadian banks were bailed out – and in a big way. Check the record:

At the end of 2008, and the beginning of 2009, Finance Minister Jim Flaherty and other federal officials moved heaven and earth to help Canada’s banks. Flaherty implemented a new program called the Extraordinary Financing Framework. Or “EFF” for short.

You know, I could think of another meaning for the acronym “EFF.” Elitist Friggin’ Financiers! That’s the real EFF.

It consisted of many different ways to help the banks – these powerful, prudent banks – during their hour of need.

Buying back mortgages in order to inject cash into the banks’ coffers. Providing huge loans, at near-zero interest rates, from the Bank of Canada, when commercial lenders wouldn’t dare. Providing other lines of credit, including in U.S. dollars. And backing the whole thing up with very weird forms of collateral – or sometimes with no collateral at all.

For example, the Bank of Canada was willing to accept asset-backed commercial paper, or ABCP, from the banks to back up some of these emergency loans.

Remember the ABCP debacle in Canada? That sophisticated, but highly unstable market totally froze up in Canada, even before the global meltdown.

If you owned ABCP as an individual, you couldn’t spend it. It was just paper in your pocket. But the banks held ABCP, and they were able to convert it into cold hard cash, courtesy of the Bank of Canada, when they needed it.

In total, various federal agencies offered the banks up to $200 billion in cash and short term ultra-low-interest loans, at a point in time when the banks could not attain this financing from normal commercial sources because of the global crisis.

They needed it. They got it. It was a bail-out, pure and simple.

It was a smart thing to do. The banks have paid the money back, with interest in some cases. (Not much interest, since the interest rates were near zero.)

But that doesn’t mean it wasn’t a bail out.

So for the banks and their executives to lecture Canadians, and our governments, about the need to be prudent and fiscally responsible and tighten our belts, is the most offensive thing we could possibly hear.

If it weren’t for Canadian governments and taxpayers, they would quite possibly be out of business.

We’re in this together. Let’s start acting that way!

So the banks were bailed out, pure and simple. And moreover, they continue to be coddled and protected and subsidized by the state. Our government is indeed a “nanny state,” where high finance is concerned.

They are protected against foreign takeovers.

Tell me, if we can protect our banks against foreign takeovers, why can’t we protect our land, and our resources, and our factories, and our jobs against foreign takeovers? Why is it protectionist to protect people, but not protectionist to protect banks?

They are protected against crises of confidence by an extensive public deposit guarantee system, and a public mortgage insurance program that eliminates most of the risk of their lending.

And they receive enormous subsidies delivered through Canada’s distorted tax system.

Here’s just one example. Capital gains taxation. If you make money by buying and selling an asset, your speculative profit is called a “capital gain.”

In Canada, you only have to declare half your capital gains income on your tax return. It’s called “partial inclusion.”

If you flip hamburgers in a hot, greasy fast food restaurant all day, you have to declare every penny of your hard-earned income on your tax return.

But if you flip stocks and bonds all day in one of these towers, you only declare half.

That’s immoral. It’s inefficient: because it encourages gambling over real production. But most of all it’s offensive, when these subsidized fat-cats lecture the rest of us about tightening our belts.

Same goes for across-the-board corporate tax cuts. The federal CIT rate has been cut almost in half since 2000, from 29% to 15%. Tell me, have any of you had your tax rates cut in half since 2000? I didn’t think so.

But these banks have.

Those cumulative tax cuts (along with provincial rate cuts) have saved the financial sector over $10 billion per year. Just the new tax cuts that the Harper government implemented since 2006 alone (cutting the federal rate from 21% to 15%), put another $3 billion per year into the pockets of the banks.

Tell me, looking around Canada today, and all the problems we face. Is further enhancing the after-tax profits of the financial industry, really the top priority? Really the most important thing for Canada to spend $3 billion on per year?

Of course not. But in our society, it’s not priority that determines where money is spent. It’s power.

So banks are protected and subsidized, and bailed out when needed. But what do banks actually do, in return for all that money?

What is their actual economic function?

Let’s cut through the mystification of high finance, and ask that simple question: What do banks do? What do bankers actually produce?

The practical answer, in concrete terms, is simple: nothing. They produce nothing.

In that, the banks are different from the real economy, where hard-working people like you and I produce actual, concrete goods and services that are useful.

Banks, and the financial sector more generally, don’t produce goods and services that are useful in their own right. They produce paper. And then they buy and sell paper, for a profit.

Here’s a little economic lesson. You can’t live off paper. You need food, clothing, and shelter to survive – not paper. And since we are human beings, not animals, we need more: we need education, and culture, and recreation, and entertainment, and security, and meaning. Those are the fundamentals of economic life. Not paper.

What is paper actually good for? You can wallpaper your house with it. You can line your birdcage with it. In a pinch, you can wipe your butt with it.

But other than that, paper is just paper. It is not concretely useful in its own right.

How do banks create that paper? Let me put it bluntly again: They create it out of thin air.

It is not an economic exaggeration to state that the private banking system has the power to create money out of thin air.

Not cash. Not currency. Only the government can produce that.

But most money in our economy – over 95% of money in our economy – is not currency. Most money consists of entries in electronic accounts. Savings accounts. Chequing accounts. Lines of credit. Credit card balances. Investment accounts.

In that electronic system, new money is created, not by printing currency, but through creating credit. Every time a bank issues someone a new loan, they are creating new money.

It’s like a big magic machine, creating money out of thin air. And it’s called the private credit system.

One of my favourite economists, John Kenneth Galbraith, put it this way: “The process by which private banks create money is so simple that the mind is repelled.”

How do they do it? They start out with some capital. Let’s say a billion dollars. Then they lend it out. Then they lend it out again. And again. And again and again, 10 or 20 or 50 times over.

Each new loan, is new money. The economy needs that money, let’s be clear. Without new money, we wouldn’t be able to pay for the stuff we make. So we’d stop making it, and we’d be in a depression.

So the creation of new money (or credit) is as essential function for the whole economy. It’s like a utility. But we’ve outsourced that crucial task to private banks. We’ve given them a legal license to print money – and the freedom and power to do it on their own terms.

Their goal is not providing the economy with a sensible, sustainable supply of the credit we need. Their goal is using their unique power to create money out of thin air, to maximize the profits of the banks, and the wealth of the shareholders.

How does this system work, creating money out of thin air? It only works if:

Number 1: Not everyone comes to the bank to withdraw all this imaginary money, in the form of real cash, at the same time. And if…

Number 2: The banks keep lending to each other, which is essential to make sure each one has the cash it needs for withdrawals.

We can immediately see that this system is inherently fragile. Banks create new loans many times larger than their capital, profiting off the interest they earn. But the money was created out of thin air. It’s not actually there, if people want it at the same time, and if the banks won’t help each other out.

So Canada’s banks are fragile, too. True, our banks only lent their capital out 20 times over, not 50 times like the Europeans did. That’s because Canadian regulations capped the leverage at 20. But they’ve still got 20 times more loans out there, than they actually have money in the bank.

Confidence is essential to the stability of the whole system. But confidence is intangible and impossible to predict. If confidence went south, Canadian banks would collapse as surely as Lehman Brothers or Dexia did.

Now, what do the banks do with all that money they created out of thin air? They lend it out. Some of it flows into the real economy, to pay for homes and cars and capital equipment. But not enough goes there. That’s why our real economy is stuck. That’s why there are 2 million Canadians unemployed, official and unofficial.

What about the money that doesn’t flow into the real economy? Unfortunately, the banks use enormous amounts of it to place bets, enormous bets, buying and selling the paper assets that are created and traded in these towers. It’s gambling, not production. It’s legalized, subsidized gambling, all protected by the state.

The interaction of the private credit system, together with the speculative motive, that creates such turmoil and destruction, with each successive financial bubble. Without massive injections of new credit, the asset bubble could never expand so far – whether it’s sub-prime derivatives, dot-com stocks, or rare earth futures.

If speculators had to spend their own money on these asset bubbles, the prices could never rise to such precarious and destructive levels.

Now, there are two key problems with the operation of this private credit system, and its interaction with speculation, that we must understand in order to fight for change.

First, the flow of credit – created out of thin air by these banks – is like a roller-coaster, all depending on the mood swings of the bankers.

When their greed overwhelms their fear, they will lend to anyone with a pulse. But when their fear overwhelms their greed, and they want to hoard every penny possible against the feared run on the bank, they pull back loans even from their most reliable customers.

This roller-coaster, called the “bankers’ cycle,” is an inherent and destabilizing feature of the private credit system. And since the whole economy depends on the flow of new money, the flow of new credit, we are forced to follow the same roller-coaster.

The second problem is that there’s nothing underpinning the paper valuations of financial assets, when they’ve been pumped up by the combination of speculation and irresponsible credit creation.

Then, when speculators’ moods switch polarities, the whole thing comes crashing down. Quoting Galbraith again, “A popped balloon never deflates in an orderly manner.”

And then we all pay the price for a crisis we didn’t cause. And we all suffer the hangover from a party we weren’t invited to.

This cycle of paper expansion and contraction, euphoria and panic, is hard-wired into the DNA of the deregulated private financial system. The cycle has happened before. And it will happen again. The current crisis was no unfortunate accident, no “perfect storm.” This crisis is simply par for the course, for a system that values speculation over production – and that gives the private credit system free reign to throw gasoline on the fire, through unlimited, unregulated credit creation.

It will happen again and again, until we change the rules of this pointless, destructive game.

So what do we do?

First, tax them. That’s the idea behind the Robin Hood Tax, that we are fighting for today. Make them pay a little bit, with every pointless, unproductive transaction, to help clean up the mess they left behind.

A transactions tax alone won’t solve the problem. It won’t stop the process. But at least it will support the public services that we need, all the more so in the wake of each financial meltdown.

Same goes for corporate tax cuts. Let’s reverse them. Put the federal rate back to 18% for the financial sector alone, and we’d raise $1.5 billion per year for essential public services.

Taxing the banks is important. But taxing the banks is not enough.

So, second, we must control them. Put in place rules that require them to use this immense power, the power to create money out of thin air, to use it sensibly and productively. Prohibit the gambling. Make sure loans are aimed at sustainable, productive purposes.

The new measures being promoted internationally by Mark Carney are a step in the right direction. But a tiny, tiny baby step. We need more powerful restrictions.

And friends, even controlling the banks is not enough.

What we ultimately have to do is take them back. There’s nothing magical about creating credit out of thin air. There’s no special technology or knowledge needed. Just the legal power.

We can create credit out of thin air, just as well as any private bank can. Ultimately, we need a public, democratic, accountable banking system. One that serves the Canadian economy, not the wealth of those who own banks.

If we can create money out of thin air to buy and sell sub-prime mortgage bonds, then by god we can create money out of thin air to pay for affordable housing that could end homelessness.

If we can create money out of thin air to buy short options on Greek sovereign debt, then we can create money out of thin air to invest in a green energy system to stop global climate change.

If we can create money out of thin air to speculate on international currencies, we can create money out of thin air to buy needed medicines to prevent hundreds of millions of needless deaths from disease in the Third World.

There’s no magic to it. These ideas are prudent and rational and economically sound. Because like we said at the beginning, it is work and production and sharing and sustaining that supports our real economy. Not gambling with paper.

These towers look powerful. But ultimately they are built on paper.

We’ve got the real power, with our ability to work and produce and share and sustain. We’ve got the power to build something new. We’ve got the power to replace these towers with a system that works.

And that’s exactly what we’ve started to do with this movement. Thank you for what you are doing! And let’s get on with the job!

You Know It's Bad When...

2011-11-06T13:43:00.000-08:00

When the big insurance companies start announcing big quarterly losses. Companies like Sunlife, and Manulife are reporting multi-million dollar losses, a sign that there really isn't much to invest in these days.

From the Calgary Herald:

Turbulent time for Sun Life

•Shares of Sun Life hit their lowest level since the days of the 2008-09 stock market crash on Thursday after the insurer reported a $621-million third-quarter loss caused by marketrelated losses.
Sun Life generally maintains a dividend payout ratio - the percentage of profits paid out as dividends - of about 50 per cent. In reporting its third-quarter results late on Wednesday, Sun Life said it would take a charge of at least $500 million in the fourth quarter and said that its earnings sensitivity to movement in bond yields has increased.

So this isn't because of big payouts from natural or man-made disasters, but an inability to turn big pools of money (the premiums we all pay) into some kind of revenues. If they can't make money it's hard to see how the rest of us can.

Some stories that caught my eye over the last week (just started a new job so a little slack getting up new material up.. I will do better). In one, Canada's agriculture minister who's leading the charge to ditch the Canadian Wheat Board, surprisingly says some good things about supply management (when he stops it will be time for dairy, poultry and egg farmers to worry). Another story that got very little attention: measurement of green-house gas emissions show huge increases. A hard-ass business writer for the National POST is warning Canadians not to believe all the "energy super-power" hype. And Paul Krugman speaks honestly how the idea of government spending gets twisted depending on who's doing the talking.

http://www.theglobeandmail.com/news/politics/its-beyond-big-brother-ritz-says-of-wheat-board/article2226614/

Its beyond Big Brother, Ritz says of wheat board

•

Agriculture Minister Gery Ritz stands on Parliament Hill on Thursday.

Dave Chan for The Globe and Mail

The man who’s about to shake up the ground rules for 70,000 western Canadian grain growers believes that all farmers should be masters of their own destiny, free to choose how they sell the fruits of their labour.
However, Gerry Ritz’s farmer-knows-best philosophy also means that elsewhere in Canada, producers are still free to wall themselves off from competition in the sheltered dairy and poultry businesses.

Mr. Ritz, the federal Agriculture Minister and a former grain grower from Saskatchewan, is bringing an emotionally charged battle over the 76-year-old Canadian Wheat Board to the country’s farming heartland.
He’s hitting the road again – as he has since May – for meetings in western provinces to defend and explain changes the Harper government is making that will free wheat and barley farmers from the obligation to sell through the board for the first time since the Second World War.
The wheat board’s defenders warn these controversial changes will leave farmers to fend for themselves and consign a Prairie institution to the margins of the business – an organization that through massive sales volume helped build Canada’s reputation as a grain powerhouse.
Mr. Ritz, 60, said farmers are ready to take matters into their own hands, noting they’ve long marketed products such as canola by themselves and don’t need an agency that dictates and interferes in their lives.
“It’s beyond Big Brother. It is the Nightmare on Elm Street on every farm across Western Canada,” he said of the wheat board. He hastened to add that “some farmers feel comfortable in those constraints, having someone else do the marketing for them.”
But even as Conservatives prepare to liberate western farmers in the name of “marketing freedom,” – they refuse to reform the heavily regulated and sheltered dairy, egg and poultry industries, which have a major presence in Central Canada.
Mr. Ritz understands risk, having tried his hand at raising ostriches before entering politics. At one point, he and a partner had about 800 of the flightless African birds that can be sold for their meat or leather.
“I got some tremendously expensive boots, but boy, they’re beautiful,” he recalls.
The witty quip is standard Ritz, colleagues say: a congenial way of negotiating conversations with everyone from farmers to reporters.
The minister doesn’t recommend the exotic ostrich business for everyone. “We were in that situation where we had too much for a local market and not enough for an export market.”
Nevertheless, it was an example of farmers making their own decisions, Mr. Ritz says.
The Harper government needs to introduce even more free-market thinking in a changing world, agriculture and trade experts say.
They warn that Canada’s share of export markets for food is shrinking on many counts, and say the country needs to open up the dairy and poultry markets to win more access abroad. Hefty tariff walls protect these sectors from significant foreign competition, and production is limited by a command-and-control approach that sets prices and output.
John Weekes, Canada’s chief negotiator for the North American free trade agreement, warns that this country’s unyielding protection of its dairy and poultry farmers is becoming a major obstacle to wringing better concessions from trade talks.
“Increasingly, I think, our supply management policies ... hamper our ability to be able to negotiate trade agreements.”
Mr. Ritz rejects this, noting Canada negotiated a trade agreement with Switzerland, a big dairy producer, and that, regardless of supply management, the European Union sells far more dairy products to Canada than vice versa. “So how is our system a problem for them?”
Mr. Ritz said there’s a benefit for dairy farmers in the managed Canadian system where prices are set ahead of time – and it’s not one that the Canadian Wheat Board offered grain farmers. “The setting of your price guarantees you a profit.”
Mr. Weekes, who also served as ambassador to the World Trade Organization in the 1990s, said Canada’s resolute defence of supply management appears to have cost it a seat at major Trans-Pacific Partnership trade talks between the United States and eight partners.
“The United States is saying they are now focused on [the trans-Pacific talks] as their key trade negotiations objective and they’re talking about this as the new gold standard for trade agreements,” Mr. Weekes said.
“If it does become the new gold standard, we don’t want to have other countries such as Australia and New Zealand having better access to the U.S. market than we have under Nafta.”
Mr. Ritz said U.S. farmers, for instance, envy the stability of Canada’s dairy and poultry system.
“At the same time the Americans are slagging our supply-managed system, farmers down there are saying ‘Boy, we like the way that works.’ ... We’ve got stability. We don’t have to wait for government largesse.’ ”
He noted the Americans approved $450-million (U.S.) last year to backstop their dairy industry.
How much did Ottawa spend on backstopping Canadian dairy farmers?
“Zip,” Mr. Ritz said.

http://www.guardian.co.uk/environment/2011/nov/04/greenhouse-gases-rise-record-levels?intcmp=122

Greenhouse gases rise by record amount

Levels of greenhouse gases are higher than the worst case scenario outlined by climate experts just four years ago

Emissions from a coal-fired power station. The output of greenhouse gases has jumped by the highest amount on record. Photograph: John Giles/PA

The global output of heat-trapping carbon dioxide has jumped by a record amount, according to the US department of energy, a sign of how feeble the world's efforts are at slowing man-made global warming.
The figures for 2010 mean that levels of greenhouse gases are higher than the worst case scenario outlined by climate experts just four years ago.
"The more we talk about the need to control emissions, the more they are growing," said John Reilly, the co-director of MIT's Joint Program on the Science and Policy of Global Change.
The world pumped about 564m more tons (512m metric tons) of carbon into the air in 2010 than it did in 2009, an increase of 6%. That amount of extra pollution eclipses the individual emissions of all but three countries, China, the US and India, the world's top producers of greenhouse gases.
It is a "monster" increase that is unheard of, said Gregg Marland, a professor of geology at Appalachian State University, who has helped calculate department of energy figures in the past.
Extra pollution in China and the US account for more than half the increase in emissions last year, Marland said.
"It's a big jump," said Tom Boden, the director of the energy department's Carbon Dioxide Information Analysis Center at Oak Ridge National Lab. "From an emissions standpoint, the global financial crisis seems to be over."
Boden said that in 2010 people were travelling, and manufacturing was back up worldwide, spurring the use of fossil fuels, the chief contributor of man-made climate change.
India and China are huge users of coal. Burning coal is the biggest carbon source worldwide and emissions from that jumped nearly 8% in 2010.
"The good news is that these economies are growing rapidly so everyone ought to be for that, right?" Reilly said. "Broader economic improvements in poor countries has been bringing living improvements to people. Doing it with increasing reliance on coal is imperiling the world."
In 2007, when the Intergovernmental Panel on Climate Change issued its last large report on global warming, it used different scenarios for carbon dioxide pollution and said the rate of warming would be based on the rate of pollution. Boden said the latest figures put global emissions higher than the worst case projections from the climate panel. Those forecast global temperatures rising between 4 and 11 degrees Fahrenheit (2.4-6.4 Celsius) by the end of the century with the best estimate at 7.5 degrees (4 Celsius).
Even though global warming sceptics have criticised the climate change panel as being too alarmist, scientists have generally found their predictions too conservative, Reilly said. He said his university worked on emissions scenarios, their likelihood, and what would happen. The IPCC's worst case scenario was only about in the middle of what MIT calculated are likely scenarios.
Chris Field of Stanford University, head of one of the IPCC's working groups, said the panel's emissions scenarios are intended to be more accurate in the long term and are less so in earlier years. He said the question now among scientists is whether the future is the panel's worst case scenario "or something more extreme".
"Really dismaying," Granger Morgan, head of the engineering and public policy department at Carnegie Mellon University, said of the new figures. "We are building up a horrible legacy for our children and grandchildren."
But Reilly and University of Victoria climate scientist Andrew Weaver found something good in recent emissions figures. The developed countries that ratified the 1997 Kyoto Protocol greenhouse gas limiting treaty have reduced their emissions overall since then and have achieved their goals of cutting emissions to about 8% below 1990 levels. The US did not ratify the agreement.
In 1990, developed countries produced about 60% of the world's greenhouse gases, now it's probably less than 50%, Reilly said.
"We really need to get the developing world because if we don't, the problem is going to be running away from us," Weaver said. "And the problem is pretty close from running away from us."

http://opinion.financialpost.com/2011/11/04/terence-corcoran-the-energy-superpower-that-isn%E2%80%99t/

Terence Corcoran

The energy superpower that isn’t

•

Canada hardly rates a mention in Daniel Yergin’s new book
When a “global energy superpower” starts delivering tough talk to its potential customers, that superpower had better be sure that people will listen. It has also better be sure it is in fact a superpower; otherwise, it may find itself talking tough to the wind.
In recent weeks, Canada — a self-proclaimed global energy superpower — has been trying to throw its weight around over the Keystone XL pipeline, TransCanada Corp.’s $7-billion project to ship oil sands production from Alberta to Texas. In Houston on Tuesday, Natural Resources Minister Joe Oliver let the Americans know that Canada had other options. “What will happen if there wasn’t approval [of Keystone] — and we think there will be — is that we’ll simply have to intensify our efforts to sell the oil elsewhere.”
Canadian oil executives, who have a lot invested in the superpower notion, are also issuing aggressive-sounding statements aimed at the United States. A headline in The Globe and Mail Friday sounded like a threat: “Oil patch to U.S.: OK pipe or lose our oil.” The story didn’t quite back up the headline, but the sense was that Canada was developing alternatives and that China is the big alternative.
If this was intended to spook the United States into approving Keystone XL, it may not be the best strategy. Mr. Oliver said Canada would “simply” have to intensify sales efforts elsewhere. There will be nothing simple about getting oil to China. Pipelines to the West Coast will have to be built over First Nations territory and through wilderness controlled by foreign-funded environmental groups. Opposition to tankers is strong.
China isn’t at Canada’s doorstep. And the Communist regime in China knows that if the U.S. doesn’t want Canadian oil sands production, then Canada has no option but to sell to China. Becoming a global energy superpower will require better negotiating positions than are shaping up around the oil sands.
Another factor playing against Canada’s claims to global prominence is the rapidly changing world energy order. Most expert assessments foresee dramatic changes in supply, technology and prices, with very little favouring Canada. Shale gas and shale oil developments in other parts of the world, from the U.S. to China and Europe, suggest the world will have plenty of supply and low prices (see Lawrence Solomon in an accompanying commentary¹). Where does that leave Canada’s relatively expensive oil sands?
While Canadian government and industry officials have a lot invested in the idea of energy superpowerdom, few outside observers share the vision. Canada barely rates a mention in The Quest: Energy, Security and the Remaking of the Modern World, Daniel Yergin’s new book on the world energy market. A few pages are devoted to the oil sands, mostly to review the high costs and technical difficulties. “As the industry grows in scale, it will require wider collaboration on the R&D challenges, not only among oil companies and the province of Alberta, but also with Canada’s federal government.”
Far more impressive for the world’s energy future will be the impact of shale gas and shale oil. The “shale gale,” as Mr. Yergin calls it, has already transformed the U.S. gas market and shale oil could be next. Since Mr. Yergin’s book was written, the shale revolution has swept Europe and is about to transform China’s energy market.
A new study from Douglas Westwood, Unconventional Gas World Production and Drilling Forecast, says shale gas and other unconventional sources could make up one-third of growth in gas production by 2020, reports the Petroleum Economist. The United Kingdom, meanwhile, is sitting on what is widely viewed as a massive shale gas reserve.
How do Canada’s oil sands stack up against the shale revolution? Energy Business Reports, in a study titled Oil Sands, Gas and Oil Shales Market, sees shale gas as an energy-market “game changer.” As for Canada’s oil sands, it concludes that: “Oil sands producers are operating in a narrow financial window that may be shrinking over time. They want to avoid reaching an oil price ceiling, like the one at US$147/barrel in July 2008 that contributed to the oil price collapse below US$40/barrel.… But they also want to be confident of an oil price floor — now estimated at US$65-US$95 per barrel — to justify such long-term, capital-intensive investments. Oil markets have rarely maintained such stability … ”
Gas, of course, is not interchangeable with oil as a commodity, at least not in the short term. Oil is still and is likely to remain the dominant fuel for transportation. But low gas prices generated by the shale revolution, and lower costs to produce shale oil, could keep oil prices below levels needed for profitable oil sands production.
Canada’s claims to global energy superpower status may be hard to maintain in the years to come. Even the United States, which Canadian officials once viewed as dependent on Canadian energy supplies, may soon be in a strong position to secure more of its energy needs at home and elsewhere at cheaper prices.
None of this is a sure thing. But it already seems clear that Canada’s political and corporate energy leaders do not have the upper hand in the new world energy order.

October 30, 2011

Bombs, Bridges and Jobs

By PAUL KRUGMAN

A few years back Representative Barney Frank coined an apt phrase for many of his colleagues: weaponized Keynesians, defined as those who believe “that the government does not create jobs when it funds the building of bridges or important research or retrains workers, but when it builds airplanes that are never going to be used in combat, that is of course economic salvation.”
Right now the weaponized Keynesians are out in full force — which makes this a good time to see what’s really going on in debates over economic policy.
What’s bringing out the military big spenders is the approaching deadline for the so-called supercommittee to agree on a plan for deficit reduction. If no agreement is reached, this failure is supposed to trigger cuts in the defense budget.
Faced with this prospect, Republicans — who normally insist that the government can’t create jobs, and who have argued that lower, not higher, federal spending is the key to recovery — have rushed to oppose any cuts in military spending. Why? Because, they say, such cuts would destroy jobs.
Thus Representative Buck McKeon, Republican of California, once attacked the Obama stimulus plan because “more spending is not what California or this country needs.” But two weeks ago, writing in The Wall Street Journal, Mr. McKeon — now the chairman of the House Armed Services Committee — warned that the defense cuts that are scheduled to take place if the supercommittee fails to agree would eliminate jobs and raise the unemployment rate.
Oh, the hypocrisy! But what makes this particular form of hypocrisy so enduring?
First things first: Military spending does create jobs when the economy is depressed. Indeed, much of the evidence that Keynesian economics works comes from tracking the effects of past military buildups. Some liberals dislike this conclusion, but economics isn’t a morality play: spending on things you don’t like is still spending, and more spending would create more jobs.
But why would anyone prefer spending on destruction to spending on construction, prefer building weapons to building bridges?
John Maynard Keynes himself offered a partial answer 75 years ago, when he noted a curious “preference for wholly ‘wasteful’ forms of loan expenditure rather than for partly wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict ‘business’ principles.” Indeed. Spend money on some useful goal, like the promotion of new energy sources, and people start screaming, “Solyndra! Waste!” Spend money on a weapons system we don’t need, and those voices are silent, because nobody expects F-22s to be a good business proposition.
To deal with this preference, Keynes whimsically suggested burying bottles full of cash in disused mines and letting the private sector dig them back up. In the same vein, I recently suggested that a fake threat of alien invasion, requiring vast anti-alien spending, might be just the thing to get the economy moving again.
But there are also darker motives behind weaponized Keynesianism.
For one thing, to admit that public spending on useful projects can create jobs is to admit that such spending can in fact do good, that sometimes government is the solution, not the problem. Fear that voters might reach the same conclusion is, I’d argue, the main reason the right has always seen Keynesian economics as a leftist doctrine, when it’s actually nothing of the sort. However, spending on useless or, even better, destructive projects doesn’t present conservatives with the same problem.
Beyond that, there’s a point made long ago by the Polish economist Michael Kalecki: to admit that the government can create jobs is to reduce the perceived importance of business confidence.
Appeals to confidence have always been a key debating point for opponents of taxes and regulation; Wall Street’s whining about President Obama is part of a long tradition in which wealthy businessmen and their flacks argue that any hint of populism on the part of politicians will upset people like them, and that this is bad for the economy. Once you concede that the government can act directly to create jobs, however, that whining loses much of its persuasive power — so Keynesian economics must be rejected, except in those cases where it’s being used to defend lucrative contracts.
So I welcome the sudden upsurge in weaponized Keynesianism, which is revealing the reality behind our political debates. At a fundamental level, the opponents of any serious job-creation program know perfectly well that such a program would probably work, for the same reason that defense cuts would raise unemployment. But they don’t want voters to know what they know, because that would hurt their larger agenda — keeping regulation and taxes on the wealthy at bay.

Healing Renewables Achilles Heel

2011-10-29T06:27:00.000-07:00

I have two friends I admire who years ago took a chance on wind energy. Both simply thought it was the right thing to do. They bought used turbines, one from Alberta, one from Texas. In one case the "wind regime" or the amount of wind that blows through the farm, isn't great and he admits he'll never get his investment back. In the other case, the turbine certainly produced power which then charged a big box of batteries. An inverter changed the DC power into AC so it could be used in the house. The challenge here was to use the power when the wind was blowing (often at night) because the batteries would get dangerously hot, and be patient when there was no wind and the laundry needed to be done. Working outside the home, and trying to provide a reasonable lifestyle for his family, this friend finally decided to shut the system down and join the grid.

These are the real challenges for all of us when it comes to renewables. Sure PEI and other coastal areas get lots of wind, but there are really only a limited number of areas where the wind blows reliably strong enough to justify the tens of millions of dollars in investment in wind turbines. Solar production will work in areas with lots of sun and little rainfall, that's why you usually see the big arrays set up in deserts. (Using the sun to heat domestic hot water with a panel remains very doable everywhere).

But properly locating renewable projects is just the first challenge. The variability of renewable energy is a whole other issue. Even on PEI the wind blows strong enough to produce power efficiently about thirty percent of the time, and of course we never know when that will be. Electric customers however want to make toast, cook dinner, dry the clothes, whenever they want to, not just when the wind is blowing. That's why jurisdictions like Denmark and PEI (which relies more on wind than any other jurisdiction in North America) set upper limits for wind production (30% or so), because utilities have to have back-up generation to replace wind energy when it's calm, and the economics get way out of kilter trying to back-up much more than that. It's why PEI has been so insistent on getting some kind of regional power agreement in place (and get a stake in the new Newfoundland hydro-electric project), so that that back-up power is readily available, reasonably priced, and in the best of all worlds, renewable as well.

The systems operator (fancy name for the person sitting in New Brunswick who monitors who's producing and who's buying power) says there are moments (when the wind is blowing hard, and demand is light) when PEI IS supplying all its energy needs from wind, but it's very rare. (and check out Peter Rukavina's efforts to monitor this on his website: http://ruk.ca/content/monitoring-pei-wind-farms )

Storing renewable energy for later use is really the holy grail in the business. Summerside is taking small steps in that direction with the heaters it's offering homeowners that can take off-peak wind energy at night and store it for heat distribution during the day.

There are more ambitious storage projects on the go too. There's a very small electrolysis set-up at North Cape on PEI that produces hydrogen from wind energy for later burning, and the Wind Energy Institute of Canada, also in North Cape, is just embarking on storage research on a much larger scale. The wind turbines are just now being erected to provide the additional power. And then there's this story about using banks of lithium batteries to store power in West Virginia. I'm presenting two versions because it highlights the differences between publications, one very enthusiastic, the more mainstream a little more cautious. The bottom line: once storage becomes efficient and affordable, the possibility of a carbon neutral future, while enjoying the convenience of the grid, becomes so much more realistic.

http://www.grist.org/renewable-energy/2011-10-28-cool-energy-storage-projects-make-mockery-politician-pessimism

Cool energy-storage projects popping up; expect a lot more
by David Roberts • Oct. 28, 2011 •

Tracking the politics of clean energy can be a surreal and dispiriting experience. D.C. is so swamped in fossil-fuel money, fossil-fuel lobbyists, and fossil-fuel-owned pols that the conventional wisdom is absurdly pessimistic about clean energy: It's unreliable, it costs too much, it can never work, blah blah.

Meanwhile, out in the real world, costs are plunging and the intermittency problem (insofar as it's actually a problem and not a talking point of the fossil crew) is being solved.

There are two ways to solve it: one is connecting more renewables over a wide geographic area, which generally requires more transmission lines and grid upgrade (for intriguing news on that front, see here2); the other is adding energy storage, so solar and wind plants can provide power even when the sun isn't shining and the wind isn't blowing. That's what today's post is about.

I give you the Laurel Mountain wind farm, in West Virginia:

That's 61 1.6-MW wind turbines, for a total of 98 MW. And here is the massive bank of lithium-ion batteries that the wind farm will be connected to:

That's the world's largest lithium-ion battery farm -- 32 MW worth of storage, courtesy of A123 Systems3. The AES power company just announced yesterday that the wind/storage power system is up and running in full commercial operation. All told, it will feed 260,000 MWh a year into the power market along the Eastern seaboard. (For details, check out the full story4 at Forbes.)

It won't be the world's largest for long, though. Some time late next year, Duke Energy will switch on a 36-MW battery storage system, the world's (new) largest, attached to the company's 153-MW Notrees Windpower Project in west Texas. The storage system will use the proprietary dry-cell battery technology of a very cool company called Xtreme Power6. The systems contain both dry-cell batteries and sophisticated power control technology, so they not only store power, they enhance grid reliability. As the CEO explained it to me a few years back, the storage system basically presents itself to the grid like a highly dispatchable power plant.

The energy-storage industry is still in its infancy7. Over 99 percent of the energy storage installed globally is made up of pumped hydro, whereby surplus power is used to pump water uphill and then the water flows down, turning turbines, when spare power is needed. That's a solid, reliable way of doing things, but its efficiency isn't that great and it faces some geographic limitations. Tons of new and alternative technologies are coming online as we speak, though: compressed air, flywheels, molten salt, and several different kinds of batteries, including the distributed batteries in electric vehicles.

Discussions on storage often end with, "for now it's too expensive." In most cases, that's true, but it's misleading to treat the affordability question as though it's a binary switch, as though someday storage will flip from being too expensive to affordable. Right now, some forms of storage are cost-effective in some applications given some markets and regulations and some accounting methods. (See above!)

What will happen is, that small pool of affordable storage applications will grow larger, not only because the technology will advance but because accounting methods will change (full lifecycle cost accounting over extended time periods makes storage look a lot better), regulations will change, markets will change, and the engineering culture inside power utilities will change.

All this will happen, I predict, much faster than even the most optimistic projections now have it. Even as a kind of resigned fatalism-bordering-on-nihilism has gripped the political conversation, out in the world, clever people are doing ambitious, exciting things. Don't let politics fool you: This is an amazing time to be involved in clean energy.

http://www.nytimes.com/2011/10/29/science/earth/batteries-on-a-wind-farm-help-control-power-output.html?hpw

October 28, 2011
Batteries at a Wind Farm Help Control Output
By MATTHEW L. WALD

ELKINS, W.Va. — Another wind farm opened on another windy ridge in West Virginia this week, 61 turbines stretched across 12 miles, generating up to 98 megawatts of electricity. But the novel element is a cluster of big steel boxes in the middle, the largest battery installation attached to the power grid in the continental United States.

The purpose of the 1.3 million batteries is to tame the wind, but only slightly, according to the AES Corporation of Arlington, Va., which developed both the wind farm, known as Laurel Mountain, and the battery project.

The installation is far too small to store a night’s wind production and give it back during the day when it is needed, or to supply power when the wind farm is calm for more than a few minutes. Instead, AES says, the battery will be a shock absorber of sorts, making variations in wind energy production a little less jagged and the farm’s output more useful to the grid.

The technology is young, and the finances are challenging. But the task of smoothing output, and the more ambitious one of storing many hours of electricity generated by wind production, seem likely to become ever more important as states require that a rising percentage of their electricity come from renewable sources.

The 13-state regional power grid that includes West Virginia, for example, has a capacity of 4,800 megawatts of electricity from the wind. But that number would grow eightfold if all of the states involved reached their renewable targets.

Power systems have always faced fluctuations in demand. As they incorporate more wind into the mix, they will have to cope with supply fluctuations as well.

Predicting wind output can be a challenge. “If you blow your forecast, you’re in a heap of hurt,” said one storage expert, David L. Hawkins, a senior consultant at KEMA, a consulting firm.

Other power sources, mostly natural gas plants, can be called on as replacements, but such plants take longer to ramp up — or ramp down — than a wind farm or a field of solar panels, a problem that is becoming more widely recognized across the country. This year, two big manufacturers of gas-fired power plants, Siemens and General Electric, promoted new models that could change output faster, but system operators say that even these may not be nimble enough.

“That’s the challenge you have in running the power system,” said Mark T. Osborn, an executive at Portland General Electric in Oregon who is working on a similar installation in the Pacific Northwest. “Storage has been thought about for years, but the costs have always been too high. Now when you’re trying to integrate more renewable resources, storage becomes more necessary.”

Already, in periods of low energy demand on windy nights, wind production is so strong that electricity prices on the grid can decline to zero or even go negative. When they are negative, grid operators bill wind suppliers to put power into the system.

In theory, the assumption would be that the operators of the batteries here would charge them at night and release the energy during peak periods in the daytime.

But the batteries are so small — somewhere between C and D batteries in size — that the wind farm, at full power, would fully charge them in about 15 minutes. Even at a peak demand time, the energy stored would only be worth a few hundred dollars.

The economics can be likened to storing tap water in a solid gold vessel. While AES did not disclose the price of the wind farm or the battery installation, a company executive gave a nod when presented with an industry estimate that the batteries and related electronics cost in the range of $25 million. The supplier, A123 Systems, of Westborough, Mass., says future installations will use batteries developed for electric cars and will cost less.

Yet the batteries perform two other tasks that the company hopes will turn a profit and pave the way for even bigger projects.

Rather than store power on a daily basis, said John M. Zahurancik, vice president for operations and deployment at AES Energy Storage, the installation will earn its keep by storing energy for minutes at a time, over and over again.

In the space of an hour, the output from the wind farm could go from 98 megawatts to zero. “In any short couple-minute interval, it could vary 20 or 30 or 40 percent,” Mr. Zahurancik said.

The batteries will smooth out the changes so the rest of the grid can catch up, he said, making the electricity sold more valuable.

The battery installation will also assist with a different kind of grid stabilization: trying to keep the alternating current system correctly synchronized. To keep the system as close to 60 cycles as possible, the regional grid operator, the PJM Interconnection, sends a signal every four seconds, asking for power to be added or withdrawn.

Experts foresee other roles as the grid evolves. For example, PJM operates a real-time market in which electricity is priced in five-minute blocks. At a given location, the price from one block to the next can vary significantly.

Mr. Hawkins of Kema said that a big battery array could make money in that market.

“It’s kind of like being a day trader on Wall Street,” he said. “If you see a $30 price spread, you can make some interesting trades doing it over and over in the course of a day.”

Love It

2011-10-27T13:45:00.000-07:00

I just can't think of anything more important than fall cover crops. It's an expense, getting a "catch" becomes more risky later in the Fall, but the benefits, and what it says about the farmer who does it, are very important.

The grass (rye possibly), and more importantly the roots help to hold the soil in place through the winter and spring run-off when tons of soil can be lost on bare ground. But the benefits don't end there. The grass helps soak up excess nitrates from fertilizer used to grow the harvested crop. Nitrates work because they're water soluble and get taken into growing plants. Nitrates are a menace to ground water and waterways because they're water soluble and leach out of the soil if they're not used. Once they're taken up by plants they become much more stable chemically and available for next year's crop.

Perfect world: no fall plowing, cover crops on harvested fields. We don't live in a perfect world.

Come Together... Right Now

2011-10-25T14:40:00.000-07:00

A large crowd listened to a very experienced organic farmer-organic farming campaigner Monday night at the MacPhail Homestead, and Patrick Holden had some interesting things to say. He presented a clear outline of how conventional/industrial farming had developed since the Second World War, talked about developments on his own dairy farm in Wales that he originally went to as a commune member (he milks Ayrshire cows and makes organic cheese that's sold in high-end stores), and he shared his deep concerns about the future, climate change, running out of non-renewable inputs, and the health costs associated with eating too much processed food.

He's been the director of the Soil Association in Britain (comparable to the various Certified Organic Producer Co-ops in Canada), but has now created a new organization called the Sustainable Food Trust. He thinks organic farmers have been a little "preachy" and have wrongly demonized conventional farmers. He's convinced that the issues facing food production are too serious for farmers to remain in silos, that they have to work together. Bottom line: soil fertility is everything, that means growing grass to preserve and enhance organic matter, that means the necessity of livestock, and that has to be done whether farmers or organic or not. Sustainability is the key for Patrick Holden.

Here's an audio link to about 5 minutes of his speech where he develops these ideas (audio isn't perfect, and there was a videotape made of his presentation and I'll let you know when that's available). And I just have to add that it was great being in the same room as George McRobie. He's part of the "small is beautiful" sainthood, and has inspired a lot of people like Patrick Holden and others at MacPhails last night.

http://www.box.net/shared/nufv84z0lj1345dk76a1

More Following the Money

2011-10-24T05:33:00.000-07:00

A failing business is a risk to not just the business owners, but others as well. Desperation and fear are not the best motivators for making good decisions. And owners of small family businesses like farms face all the additional pressures of pride and history. I'm convinced it's one the reasons the strong recommendations from a handful of commissions and public inquires (the latest from Judge Ralph Thompson) to bring in land zoning to protect farmland just gather dust. After a decade of losses farmers want to maintain every opportunity to cash in on development opportunities so they can walk away with something once the debts have been paid. They end up fighting the very thing most know is badly needed. It certainly skews the discussion over turning food crops into fuel. Farmers have looked greedy and short sighted pushing for ethanol production, but peel away the rhetoric and you find that what farmers really want is a profitable market to sell into, period.

I haven't read as good a discussion of this dilemma than this piece from the weekend about a farmer's decision to allow shale-gas exploration on his farm. Throughout the piece you get the sense that if the dairy and cattle farms were profitable, the farmers would be in a much stronger position to assess the enormous environmental risks from fracking, but, as the saying goes, when you've got nothing, you've got nothing to lose.

http://www.nytimes.com/2011/10/23/opinion/sunday/fracking-on-my-land.html?scp=1&sq=fracking&st=cse

October 22, 2011
Drilling Down on the Family Farm
By SEAMUS McGRAW

Seamus McGraw is the author of “The End of Country.”

Ellsworth Hill, Pa.

A CLOUD of dust and sand and diesel exhaust, thick as a desert windstorm, snaked up into the sky and blotted out the midsummer Pennsylvania moon. The scene was backlighted by 100 high-powered lights glaring from the top of a 70-foot-tall, hundred-yard-square acropolis of broken stone carved into our hillside.

Standing there, in what used to be my family’s pasture, I was surprised by my own feelings as I watched a small army of workers rev up the machines that would crack open the Marcellus Shale deep below my land, the same rich cache of gas that New York now seems poised to exploit.

I thought I was prepared for it. I had seen this operation before, on other people’s land. I had even been mildly impressed by the military precision of it all, by the way the roughnecks moved wordlessly among the massive water tanks arrayed around a drill pad the size of a high school football stadium, while others monitored the gargantuan pump itself, a 40-foot-long battleship of a machine that would blast a toxic cocktail of water and up to a dozen chemicals a mile and a half deep into the earth at more than 9,400 pounds of pressure per square inch to shatter the rock and release the gas trapped inside it.

But now that it was happening on our 100 acres, I could understand in a much more visceral way why the word to describe this process — fracking — stirs such fear. I could even feel the stirring of that fear myself.

It hadn’t been an easy decision to let the drillers onto our land four years ago. Not for me, not for my family, not for our neighbors, most of them former dairy farmers who had, over the years, been slowly strangled, driven out of business in part by spiraling energy prices. To us, the land was more than a spot on a driller’s map. It was home. The sum of who we are.

My parents bought the place 40 years ago. It started out as a weekend retreat but quickly became an obsession. We’d usually spend three or four nights a week there, trying to indulge my father’s dream of becoming a gentleman farmer and my mother’s dream of becoming a character in one of the frontier romance novels — buckskin bodice rippers, she called them — that she adored. My mother succeeded in achieving her dream. The same could not be said of my father. For a few years, he tried to press me into service in a never very successful attempt to raise beef cattle. We had about 40 head. My heart wasn’t in it.

Ultimately, my father quit trying. When I turned 18, I shook the dust of that place off my boots, headed off to college for a while, failed at that, and then failed at a series of jobs and marriages until I drifted into journalism and never figured out how to drift back out of it. But the place was always with me. It defined me. I went back every chance I got. My sister was married there. So was I, the third time at least. My father died there. I had always imagined it the way I remembered it. But it wasn’t that way anymore.

The working dairy farms that used to surround us had failed, most of them choked to death by a complex system that held the price of milk in check while energy prices, which drove up the cost of everything on those farms, spiraled upward. Those who could leave did, selling off their land, often in small chunks to people from New York or New Jersey who imported with them a fantasy of country living. Little by little, the country I had known, that whole way of life, was vanishing. It was, as one of my neighbors put it, “the end of country.”

And now, the drillers were coming.

The way I saw it then, the way I still see it, is that there was a sense of inevitability to it all. It wasn’t just about the money. Though some of us, like my own family, were offered hundreds of thousands of dollars for our mineral rights, others, like my neighbor across the road, who signed before the full potential of the Marcellus was understood, got a pittance, just enough to pay their property taxes. It was about something more important. The way we saw it, maybe the gas in the Marcellus could buy us one more chance. Sure, it could also very well turn out that those long strands of $10 words in the contracts the companies offered would be a noose, binding us to an industry that would poison the last valuable possession we had. But they could also be a lifeline.

Tapping the more than 400-trillion-cubic-foot reserve of gas in the Marcellus could allow a farmer to keep his land and keep it intact. He might lose a few acres, maybe 5 or 10 if the drillers decided to put a rig on his land to suck out the gas from below his farm and the others they had leased for a mile around. He might lose none, if the drillers decided that all they really needed from him was the gas underground. He could keep farming if wanted to. And if he didn’t, well at least this was a chance to keep one more generation on the land, and in the process buy all of us a little time to figure out how to cut through the ropes that bind our fortunes to the political intrigues of a half-dozen oil-rich countries on the other side of the planet and the speculative games of oil traders in New York.

We were not entirely ignorant of the risks. We understood that what was coming to our little corner of Pennsylvania, and all over the state, was an enormous industrial operation.

It takes as many as 400 truck trips to complete a single well, and that’s not even counting the fuel-guzzling equipment needed to alter the ancient land to carve out the three- to five-acre drill pad itself. Once that’s done, the diesel drill rigs arrive, towering diamond-tipped syringes that work round the clock, often for two weeks at a stretch, to bore down 7,500 feet or so into the Marcellus before making a 90-degree turn to bore another mile and a half laterally. It’s a dirty, noisy, energy-intensive process, and despite the industry’s boast that natural gas burns 30 percent cleaner than oil, in the Marcellus the hunt for it is still fueled almost entirely by diesel.

And that’s not the only resource that’s consumed. It takes millions of gallons of water to break up the shale, and at least 30 percent remains underground forever. The rest of it, along with the slightly radioactive, highly saline and heavy-metal-laden water that has existed alongside the shale for 400 million years, flows up to the surface over the lifetime of the well.

IT’S a perilous process. There is the risk of surface spills — of the fracking fluid or flowback water, or even of diesel, whether held on the site to fuel the process or dumped when a driver fails to navigate the hazards on back roads never meant to handle this kind of traffic. Groundwater has also been fouled by drifting methane that migrated because the drillers, by dint of ignorance or carelessness or just plain bad luck, failed to properly isolate those deposits with cement.

This will never be a perfectly safe operation. No industrial process ever is. There will always be risks of accidents, mechanical failures, human error. That’s every bit as inevitable as the development of the Marcellus itself. There will never be enough regulators to police all the trucks and tanks and rigs that will cover the Marcellus from New York State to the Kentucky state line in the next few decades. In the end, the responsibility for monitoring this, for holding the industry to its promises and responsible for its failures, will fall where it has always fallen — on the shoulders of the people on the ground, the people whose lives will be most directly affected.

Standing there in what used to be our pasture on that light summer night, watching as the machinery of progress blasted the rock a mile beneath my feet, I realized that was what scared me the most. Not that this was inevitable, but that its impact depended so much on me, on whether I had the character to come out from behind the convenient shield of “are you for it or against it” ideology and find the strength, the will and the means to do what I can to make sure this is done in the best way possible.

I still don’t really know the answer.

Follow the Money

2011-10-20T05:38:00.000-07:00

I've written a fair amount on the impact of large farm subsidy programs in the U.S. and Europe on Canadian farmers. ( http://foodmatters-petrie.blogspot.com/2011/03/there-are-happy-farmers-out-there.html )We tend to be the boy scout of trading countries, generally because Canada didn't have as large a government treasury to draw on, although that's clearly changing since the 2008 financial/banking crisis, and the impact that's had on American and European sovereign debt. The bottom line is that Canadian farmers compete in international markets, and for space in Canadian supermarkets, and are at a disadvantage if competitors get additional support from government cheques in the mailbox.

As the U.S. and Europe try to wrestle with huge deficits, expensive agriculture policies are under the microscope. U.S. programs have traditionally been geared towards increasing production of a handful of commodities (corn, soybean, rice, feed grains, sugar, etc... grow these crops and a farmer gets a cheque in the mail, even if these crops are highly profitable in the marketplace). European policies lean towards subsidizing the export of commodities (which really hurts farmers in developing countries) and some strong measures to protect the environment. (see http://foodmatters-petrie.blogspot.com/2011/03/building-trust-its-not-easy.html for more on this).

Reports this week that, not surprisingly, agricultural interests in the U.S. and Europe are working hard to hold onto what they have. If there could be real reform it would benefit Canadian farmers. Food prices would have to better reflect the cost of production, not the level of government support. This could lead to somewhat higher food prices.

http://www.nytimes.com/2011/10/18/business/when-one-farm-subsidy-ends-another-may-rise-to-replace-it.html?scp=1&sq=farm%20subsidies&st=cse

October 17, 2011
Farmers Facing Loss of Subsidy May Get New One
By WILLIAM NEUMAN

It seems a rare act of civic sacrifice: in the name of deficit reduction, lawmakers from both parties are calling for the end of a longstanding agricultural subsidy that puts about $5 billion a year in the pockets of their farmer constituents. Even major farm groups are accepting the move, saying that with farmers poised to reap bumper profits, they must do their part.

But in the same breath, the lawmakers and their farm lobby allies are seeking to send most of that money — under a new name — straight back to the same farmers, with most of the benefits going to large farms that grow commodity crops like corn, soybeans, wheat and cotton. In essence, lawmakers would replace one subsidy with a new one.

“We are very much aware of the budgetary constraints of the federal government,” said Garry Niemeyer, an Illinois farmer who is president of the National Corn Growers Association. “We want to do our part as corn growers to help resolve those issues, but we only want to do our proportional part. We don’t want to have everything taken out on us.”

But Vincent H. Smith, a professor of farm economics at Montana State University, called the maneuver a bait and switch.

“There’s a persistent story that farming is on the edge of catastrophe in America and that’s why they need safety nets that other people don’t get,” he said. “And the reality is that it’s really a very healthy industry.”

The subsidy swap is gaining momentum as lawmakers seek to influence the cuts in farm programs that are expected to be made by a special Congressional panel charged with slashing $1.2 trillion from future budgets.

On Monday, leaders of the House and Senate agriculture committees said they were preparing recommendations for $23 billion in unspecified cuts over 10 years, far less than some other proposals.

Lawmakers’ reluctance to simply eliminate a subsidy without adding another in its place demonstrates how difficult it is for Washington to trim the federal largess that flows to any powerful interest group. Indeed, the $5 billion program that lawmakers are willing to throw under the tractor, known as the direct payment program, was created in 1996 as a way to wean farmers off all such supports — and instead was made permanent a few years later.

The new subsidy is being championed by Senator Sherrod Brown, Democrat of Ohio, and Senator John Thune, Republican of South Dakota.

Mr. Thune, a leading voice in favor of deficit reduction, received at least $80,000 in campaign contributions since 2007 from political action committees associated with commodity agriculture, according to data compiled by the nonpartisan Center for Responsive Politics, which tracks campaign spending. Mr. Brown has received $5,500 in PAC contributions from such groups in that period.

It is unclear how much support a new subsidy would garner, since many lawmakers view farm programs as a likely source of budget savings.

Critics say that farm subsidies today have little to do with helping struggling family farmers. Instead, they go predominantly to well-financed operations with large landholdings. All told, the subsidies amount to about $18 billion a year — about half of 1 percent of the federal budget.

An analysis of federal data by the Environmental Working Group, an advocacy group that tracks farm subsidies, showed that the top 10 percent of direct-payment recipients in 2010 received 59 percent of the money under the program. Those 88,000 people, including farmers, their spouses and absentee landowners, got an average of $29,598.

In lean times, such support might seem vital, but in recent years commodity farmers have done well.

The Agriculture Department forecasts that farm profits this year, measured on a cash basis, will total $115 billion, 24 percent higher than last year, thanks to soaring crop prices. Adjusted for inflation, profits are expected to be at their highest level since 1974.

The average income for farm households has been higher than general household incomes every year since 1996. The average household income was $87,780 for all farms in 2010, and $201,465 for families living on large farms.

“How do you justify this kind of money going to a sector of the economy that’s booming while other folks in the country are suffering?” Craig Cox, a senior vice president of the Environmental Working Group, said of the subsidies.

Lobbyists and farm-state lawmakers have long argued that farmers face risks, like bad weather, pests and volatile markets, that merit special treatment.

Direct payments have come under fire, however, because farmers get them whether markets are high or low. The new subsidy, called shallow-loss protection, would act as a free insurance policy to cover commodity farmers against small drops in revenue.

Most commodity farmers already buy crop insurance to protect themselves against major losses caused by large drops in prices or damage to crops. Those policies typically guarantee 75 to 85 percent of a farmer’s revenue, with the federal government spending $6 billion a year to pay more than half the cost of farmers’ premiums.

The proposed new subsidy would add another layer of protection to guarantee 10 to 15 percent of a farmer’s revenue, paying out not only in years of heavy losses, but also when revenue dipped less severely.

The shallow-loss plan getting the most attention is in a bill introduced last month by Senators Brown and Thune that would simplify and expand an existing program.

Gary D. Schnitkey, a professor of farm management at the University of Illinois, said the Brown-Thune plan would help protect farmers during longer periods of depressed prices. Without such a program, he said, “we would see financial stress and we would see farmers go out of business.”

It is unclear how much the proposal would cost taxpayers. Dr. Schnitkey said the plan could pay farmers $40 billion over 10 years. That would be $20 billion less than the programs it replaced, including direct payments and some smaller subsidies.

But Dr. Smith, the Montana State economist, said the cost could be much greater because the plan used recent high crop prices as its benchmark.

“If farm prices move back towards what are widely viewed as more normal levels than their current levels, farmers will be compensated for going back to business as usual,” he said.

In a statement Senator Thune said the proposal in the bill “corrects inefficiencies in several farm programs with a streamlined and cheaper approach.”

Representative Marlin A. Stutzman, an Indiana Republican, said that a shallow-loss plan would give farmers more flexibility in managing risk. “Farmers shouldn’t have to pay the brunt of the deficit problem,” he said.

Mr. Stutzman and Senator Richard Lugar, also an Indiana Republican, included the Brown-Thune plan in matching farm bills they introduced this month.

Congress is due to write a new five-year farm bill next year, but some lawmakers want to use the deficit-cutting process to revamp farm spending. President Obama has proposed cutting $33 billion from farm programs over 10 years, including ending direct payments without adding a shallow-loss program. Mr. Stutzman’s bill would slice $40 billion, with more than half coming from programs like food stamps and soil and water conservation.

http://www.guardian.co.uk/environment/blog/2011/oct/13/reform-common-agricultural-policy-europe

Europe has blown its chance to reform the common agricultural policy

The consensus is that once-in-a-generation chance to overhaul an unjust and ecologically illiterate scheme will be squandered

So what do we like about the European commission's proposals for the reform of the common agricultural policy (CAP), published on Wednesday?

The move away from historical payments to a flat-rate payment scheme is welcome; capping payments to the biggest farmers is only fair; more help to young farmers would refresh an industry; help for organic farmers is long overdue, and a basic requirement to put a proportion of farmland into environmental management is admirable.

But what don't we like? Handing out €435bn of taxpayers' money over the next 10 years to some of the most destructive corporations and richest individuals in Europe – as millions of people across the continent lose their jobs – is crass. There is to be no rethink of the export subsidy system which is unfair to developing countries, and no new obligation on farmers to protect rivers or biodiversity. The overall cut in funding for agri-environment schemes spells disaster.

Last week we saw some leaks of the proposals, but on Wednesday we received some considered responses from farmers, businesses, unions and environment groups. The consensus is that Europe had a once-in-a-generation chance to reform an unjust and ecologically illiterate scheme, but blew it.

The RSPB, which is one of the biggest recipients in Britain of farm subsidies, fears that conservation will go backwards. Here is Gareth Morgan, head of countryside conservation:

    "This a big let down for wildlife-friendly farmers. There will be an overall cut in funding for agri-environment schemes and on top of that countries could be free to re-allocate already overstretched rural development funding away from these schemes. There is also no targeted support proposed for high nature value farmers and crofters in areas such as the Scottish Highlands and islands which provide vital habitats for wildlife."

Greenpeace is furious:

    "If these proposals are left unchanged, the plan will allow the agri-chemical business to keep a firm lock on the food chain. Unless the European parliament and governments strengthen this proposal, the EU will spend €435bn of taxpayers' money to continue polluting nature and pumping our food full of chemicals. This is quite simply unjustifiable."

And the Friends of the Earth and WWF says the "greening" measures do not go far enough.

    "Agriculture is the biggest driver of biodiversity loss and water pollution in Europe. The current proposal should link not just 30% but a total 100% of direct payments to greening measures to decrease the pressure of agriculture on the environment. We need to make sure that each European farmer implements a meaningful crop rotation, devotes at least 10% of their land to biodiversity, and stops converting pastures into arable land that destroys our landscapes and increases carbon emissions. Today's proposal is far from achieving these changes."

But to my mind, the most telling response to the proposals comes from the National Farmers' Union (NFU), which represents most of Britain's 80,000 farmers, and the County Land and Business Association (CLA), effectively the union of hereditary and big landowners, who today issued a joint statement:

    "In terms of equity, we want to ensure that we have equivalent greening measures throughout the European Union. The purpose of this reform must be to bring the whole of Europe up to the standard of the better-performing countries. We want to see a fair allocation of the budget to the UK, in both pillars, so that there is no necessity subsequently to move money between the two pillars - in either direction. Specifically, we don't support the attempt to allow up to 10% modulation. We also need to see the capping proposals that would discriminate against the UK rejected. In terms of reducing complexity, we want to see greening measures which can be easily administered and monitored.

    What we don't want to see are definitions of active farmers that would be a nightmare to enforce. The restrictive definition of an active farmer, and the proposed payment reduction and capping, are highly discriminatory - hitting farms of equal size and payment to a sharply different extent. They will also hinder structural changes that may be needed to improve efficiency. And in terms of competitiveness we would want the obligation to take up to seven per cent of a farm's area out of production significantly reduced. We will also insist that any greening measures do not have perverse consequences from a market or agronomic point of view."

Translated , this means that the two groups, who between them own most of the land in England, are acting like selfish, spoilt bullies. They do not want to see the subsidies of big farmers capped, nor they do not want more money to be given to the environment rather than single farm payments.

Moreover, they object to the EC trying not to pay people who do not actually farm, and they don't like the proposal to take up to 7% of a farm's area out of production. They make no mention of trying to help the small or the vulnerable hill farmers, and when they talk of equity they mean they want as much money as some of the biggest European agribuinesses get. In other words, "sod the environment, we want more".

Ten years ago, after a series of food scares, diseases and scandals, British farmers and landowners were widely pilloried for being socially out of touch with the public, grasping and irresponsible. They have only recently won back some of the trust and admiration but if the NFU/CLA continued to ignore the wider economic situation and try to take their welfare is more important than anything else, they will lose all the goodwill they gained.