Now Comes the Hard Part

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

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

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

Neil Reynolds

 Dec. 21, 2011

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

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

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

“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

John Ibbitson

Dec. 12, 2011

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

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

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

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 The Guardian Weeklies  •  Nov. 22, 2011

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

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

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

November 23, 2011

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.”