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10. FAO looks to organics for food security By staff reporter NutraIngredients-USA.com 5/14/2007- Leading proponents of the benefits of organic agriculture put their heads together last week to discuss how organic methods could help preserve food security for the future. The UN's Food and Agricultural Organization held a conference in Rome last week on Organic Agriculture and Food Security, in partnership with the International Federation of Organic Agriculture Movements (IFOAM). The aim was to shed light on the contribution of organic agricultural methods in preserving food security, to identify their potential, and to outline the conditions needed for their success. It is estimated that the world's population will increase from six billion to nine billion by 2050, calling for a massive increase in food production. But Angela Caudle, executive director of IFOAM, said prior to the meeting that food security is not just a matter of production figures. Issues such as war, climate change, disasters and inequality also have a large bearing. In a paper published in advance of the conference, the FAO said, "the strongest feature of organic agriculture is its reliance on fossil-fuel independent and locally-available production assets; working with natural processes increases cost-effectiveness and resilience of agro-ecosystems to climatic stress". It also called on governments to devote resources to organic agriculture, and to integrate it within national agricultural development and poverty reduction strategies. It called for particular attention on vulnerable groups. A spokesperson for the FAO was unavailable to give details of the meeting's outcome prior to publication deadline, but it was expected that that it would yield a "thorough assessment of the state of knowledge on organic agriculture and food security, including recommendations on areas for further research and policy development." The report from the conference will be presented to the 33rd committee on World Food Security. IFOAM expects this will result in FAO policy chances that favour organic agriculture. The issue of food security has had food policy experts assessing other models for the future of food supply on a global basis. For instance in his 2004 book Food Wars: the global battle for minds, mouths and markets, Tim Lang, professor of food policy at City University, London, and colleague Michael Heasman laid out the agenda of two alternatives to the existing productionist model - one based on life sciences an the other on ecological integration. Previously the FAO has devoted attention to key areas in the effort to ensure future food security. For instance, another report, prepared in advance of the FAO Committee on Agriculture meeting in April, said that a major shift in agricultural methods and their environmental impact is urgently required to protect productivity and food security. Agricultural practices are often responsible for environmental degradation, such as non-sustainable food production, poor fuel use, natural resource depletion and habitat exploitation. And at the opening of a UN climate change conference in Nairobi in November, FAO Kenya representative Castro Paulino Camarada said climate change will directly affect future food availability and make feeding the world's rapidly growing population extremely difficult, said the FAO. Camarada stressed that greater attention must be given to the impact of climate change on agriculture, forestry and fisheries, and on mitigation and adaptation measures. -------------------------------------- Copyright - Unless otherwise stated all contents of this web site are (c) 2000/2007 - Decision News Media SAS - All Rights Reserved. ________________________________ 11. Bill Bobier and Lana Pollack: Small farmers deserve help Published May 13, 2007 [ From Lansing State Journal ] Michigan's family farmers and forest landowners produce an extraordinary bounty of food and fiber, as well as clean air, clean water and habitat for wildlife. However, renewal of federal farm and food policies this summer could do much more to meet the needs of our farmers, forest landowners, consumers and communities. The reasons for reform are well documented. Many consumers lack affordable and healthy food choices, contributing to soaring health care costs. Despite record farm sales, many of Michigan's family farmers and forest landowners are struggling to stay profitable. Our farm policies violate international trade agreements, inviting retaliatory tariffs on everything from fruit to pharmaceuticals. Many of Michigan's most pressing environmental challenges are left unmet because the U.S. Department of Agriculture's funding shortage forces them to reject six out of 10 Michigan's family farmers and forest landowners who offer to help. Renewal of federal farm and food programs creates a rare opportunity to boost the profitability of many more family farmers, forest landowners and communities, provide consumers with more food and energy choices, and to reward family farmers and forest landowners when they take steps to provide clean water, open spaces, or habitat for wildlife. Only one out of three Michigan farmers grow the crops that are eligible for farm subsidies that account for the lion's share of farm spending under the current farm bill. By rewarding - rather than rejecting - family farmers and forest landowners when they offer to share the cost of good conservation practices that provide clean air and water, farm policies can help many more Michigan producers and do much more for the Great Lakes and Michigan's other precious natural resources. The next farm bill should provide new resources to boost renewable energy development on farms, and should focus those investments on energy proposals that help meet our environmental challenges. By expanding incentives good stewardship and clean renewable energy, the next farm bill can help our farmers get ready to profit from a cap on carbon emissions. The next farm bill should do much more to boost the profitability of our farmers in ways that provide more healthy food choices for out consumers. For example, it should provide new resources to help our farmers make the transition to organic and could link more farmers with consumers through farmers markets, farm-to-school programs, and other initiatives that bring fresh, local fruits and vegetables to our school children. Lawmakers should assist in the protection of at least 10 million acres of America's farmland from development because 80 percent of America's fruits and vegetables are in the path of sprawl. Fortunately, most of Michigan's congressional delegation is co-sponsoring at least one of two bipartisan bills introduced in Congress to boost conservation, energy and healthy food initiatives: "The Healthy Farms, Foods and Fuels Act" and "The EAT Healthy America Act." The rest of the our delegation should support these bills, and vote against any farm bill that does not meet the needs of our family farmers, forest landowners, consumers and natural resources. 12. The Economic Impact of B.S.E. on the U.S. Beef Industry: BY NOT TESTING TO FIND Date: May 6, 2007 at 3:05 pm PST The Economic Impact of B.S.E. on the U.S. Beef Industry: Product Value Losses, Regulatory Costs, and Consumer Reactions Background For nearly 2 decades the U.S. beef industry has been impacted by bovine spongiform encephalopathy (BSE). Since the emergence of the disease in the United Kingdom and the subsequent discovery of a possible link between BSE and fatal new variant Creutzfeld-Jacob Disease (vCJD) in humans, various agencies of the United States government have implemented measures to prevent BSE from entering the country, prevent its spread if it were to be discovered here, and safeguard human health. These measures included restrictions on imports of live animals, meat products and feedstuffs, restrictions on feeding certain ruminant derived tissues back to ruminant animals, a disease surveillance program, and restrictions on blood donations from individuals who previously resided in BSE affected countries. As the disease spread outside Europe to Japan and, in mid-2003, to Canada, USDA enhanced its surveillance efforts and increased funding for BSE related research. Regulatory efforts to counter the disease were further strengthened when, on December 23, 2003, it was reported that a dairy cow in Washington state had tested positive for BSE. Regulatory Response to the December 23 Case. To enhance protection of human health and reassure export markets about the safety of U.S. beef, the Food Safety Inspection Service (FSIS) of USDA issued rules designating certain tissues (e.g., small intestine and tonsils of all cattle; brains, eyes, spinal cord of cattle over 30 months of age) as specified risk materials (SRM) not allowed in human food. FSIS also banned entry of material from downer cattle into the human food chain. To further reduce the risk of BSE spreading, the Food and Drug Administration (FDA) proposed enhancing the existing ruminant feed ban by removing the exemption for blood products and banning plate waste and poultry litter. The Animal and Plant Health Inspection Service (APHIS) stepped up BSE surveillance efforts and announced that they would conduct BSE tests on "as many cattle as possible" from the population of high-risk cattle in a 12- to 18-month period beginning in June 2004. This represented more than a tenfold increase in testing relative to previous surveillance levels. Costs Associated with BSE Regulations The regulations introduced in 2004 led to changes in cattle procurement, employment, employee training requirements, food safety plans, capital investments, and marketing opportunities for the beef industry. To assess the impact on industry, we interviewed seven firms to gather data on costs associated with the new regulations. The seven firms represented more than 60 percent of 2003 beef slaughter and were sufficiently diverse to represent a reasonable cross section of the beef packing industry. On average, firms incurred additional labor costs of $0.45 per head of daily capacity. These costs arose primarily as a result of regulations requiring the creation of positions to age animals using postmortem dentition, to deal with non-ambulatory animals, and to segregate SRM material. One-time costs of training existing employees to comply with new FSIS rules varied from $13,800 to $100,000 across firms. Altering HACCP plans and record keeping procedures resulted in relatively small cost increases - a combination of nominal initial investments plus ongoing labor costs of approximately $0.01 per head. Changes in capital investments varied across firms. Some were able to achieve compliance without any new investments, whereas others invested up to $84,000 in long-term assets. All firms had investments in certain assets that they now consider obsolete. On average, the loss resulting from investments being made obsolete was more than $700,000 per firm. The new regulations also resulted in revenue losses due to products being banned from the food supply. In particular, the condemnation of small intestines from all cattle has been a hotly debated topic. We estimate that, on average, firms that previously sold small intestines are foregoing an average of $3.68 per head in potential revenue. That loss however, is contingent on the availability of export markets for the product. For non-fed Executive Summary 4 slaughter (animals over 30 months of age), condemnation of bone-in cuts containing vertebral column and restrictions on the use of advanced meat recovery (AMR) systems reduce per-head revenues by approximately $8.50 and $9.36, respectively. These decreases only apply to firms engaged in these respective activities. Also prohibited from the food supply are non-ambulatory cattle. In 2004, this regulation resulted in an estimated loss of $64.6 million to the beef packing sector. Considering all these areas of change, and ignoring one-time expenses, we estimate the net economic cost to the beef industry in 2004 from FSIS Interim Final Rules to be approximately $200 million. We also considered the potential impacts of additional BSE measures that have been proposed, but not yet implemented. One such policy being considered is a ban on SRM in animal feed. We estimate that if this proposal is implemented, the associated costs would be $2.16 per head for fed slaughter and $6.77 per head for non-fed slaughter. We estimate that a complete ban on feeding of ruminant derived proteins would cost $14.01 per fed animal and $12.35 per non-fed, in addition to adding $4.50 per head to feed costs for a fed animal. Market Response to the December 2003 Case Export Markets Within days of the Washington state BSE announcement, 53 countries, including major markets such as Japan, Mexico, South Korea and Canada, banned imports of U.S. cattle and beef products. In 2003, U.S. beef exports were valued at $3.95 billion and accounted for 9.6 percent of U.S. commercial beef production. The import bans caused U.S. beef exports to plummet, and although some important markets, including Mexico and Canada did reopen during 2004, export quantities for the year declined 82 percent below 2003's level. The loss of export markets increased the quantities available on the domestic market thereby depressing domestic prices below levels they would have attained if exports were possible. We developed a trade model to estimate the impact of export losses on the beef industry. The model incorporated assumptions about the elasticity of domestic demand for beef and offal in order to estimate the price impact of additional supplies on the domestic market. Because the resulting loss estimates depend on the elasticity estimates, our report includes results of a sensitivity analysis to provide a range of probable loss estimates. Results suggest that total U.S. beef industry losses arising from the loss of beef and offal exports during 2004 ranged from $3.2 billion to $4.7 billion. The United States has yet to regain access to the Japanese and South Korean beef export markets, the second and third largest markets for U.S. beef during 2003. If the United States regained access to these two key markets, and exported the same percentage of U.S. production to these two countries in 2004 as in 2003, wholesale revenue per head would have increased between $45 and $66 per head for every head slaughtered in the United States. If exports to Japan and South Korea were only one-half the 2003 level, as a percentage of U.S. production, wholesale revenue per head slaughtered would have increased $22 to $32. Domestic Market In the week following the December 2003 announcement, cattle prices fell by about 16 percent. Consumer surveys at that time suggested that U.S. domestic beef demand could fall by as much as 15 percent. However, prices recovered in early 2004 as it became clear that U.S. consumer demand had been impacted only minimally, if at all. In fact, market data on beef disappearance and retail prices suggest that consumer demand for beef actually strengthened in the first half of 2004. However, given that the animal infected with BSE in Washington state originated in Canada and could plausibly be viewed as an isolated case, the possibility remains that an additional BSE discovery in an indigenous animal could have a significant negative impact on demand. To investigate the potential impact of additional U.S. BSE discoveries we used a regionally targeted consumer survey. The results suggest that most consumers (77 percent) did not change consumption habits because of the first U.S. BSE case, but that subsequent discoveries, particularly of multiple cases, could have a significant impact on demand. However, we cannot infer from our results that an additional isolated case of BSE 5 in the United States would have a significant impact on domestic beef demand. Testing Voluntary testing for BSE has been proposed as a means of regaining access to lost export markets, but USDA has turned down a request from a private firm to conduct such testing. The beef industry is sharply divided on the issue. Proponents of voluntary testing tend to view it in terms of a marketing decision with expected benefits outweighing costs, at least in the short run. Opponents see testing as unnecessary and costly, as setting a dangerous precedent in terms of acquiescing to an unreasonable customer requirement, and as a procedure with no scientific justification in terms of risk reduction to consumers. In our analysis we estimate costs and potential benefits for a range of testing/ market-access scenarios. Voluntary testing by a single, small firm would provide little or no benefit to producers because the increase in the derived demand for cattle generated from such a small-scale increase in exports would have an insignificant impact on domestic cattle prices. The policy could, however, result in significant profits for a firm engaged in testing, at least in the short run, if testing opened up additional markets for a firm's beef products. If additional market access is obtained through BSE testing, more firms would be attracted to testing and domestic cattle prices would increase. Our analysis suggests that if all slaughter animals are tested, but there is no increase in access to either the Japanese or South Korean markets, the result would be a net loss of $17.50 (the estimated cost of testing) per head. Alternatively, if full access to the Japanese and South Korean markets is regained without implementing a broad based BSE testing program, the potential revenue gain ranges from about $45 to $66 per head. http://www.oznet.ksu.edu/library/agec2/MF2678.pdf <http://www.oznet.ksu.edu/library/agec2/MF2678.pdf> If you would like to access previous postings to the Mich-Organic listserv you can copy and paste the following URL into your browser address bar http://list.msu.edu/archives/mich-organic.html