Robbing Peter ....

Wow. The Senate Finance Committee has some chutzpah. Visiting with a couple of industry lobbyists today, I understand that one way that the Senate Fiance Committee is looking to generate revenue to keep the farm programs intact, create a permanent disaster relief program and throw a few crumbs to other priorities is by removing the business tax detectability for H2A workers. You have got to be kidding me.

So the government wants to take away a huge business deduction while at the same time the Department of Homeland Security is set to begin enforcing the no-match rule on agricultural employers. Uncle Sam wants to eliminate workers with false documents while wringing more tax from growers who go through the proper channels for H2A workers.

Produce industry lobbyists should try to bring down the whole farm subsidy program if the Senate Finance Committee jobs them like that. One assumes this bad policy will be beaten back, but we will know more on Thursday, when the committee is expected to meet and come up with definitive financing for the farm bill.

On import safety

Find the transcript of remarks here by Health and Human Services Secretary Mike Leavitt and Acting USDA Agriculture Secretary Chuck Conner at today's import safety working group public meeting.

Some excerpts:
Leavitt:
In the past two months, Working Group members have been criss-crossing this country fact-finding. I personally visited more than two dozen cities. I've been in ports and post offices. I've been in railroads, at airports, seaports, warehouses, meat-packing facilities. I have been in freight hubs and border crossings and I visited wholesalers and retailers and fruit stands. On the 10th of September we were able to bring all of that together into a strategic framework which we presented to the President. It focuses on the full import cycle by building safety into the products that we purchase every step of the way. Based on the keystone principles that service a foundation-prevention, intervention, and response - this framework recommends six cross-cutting strategies.
The first is to advance common vision. Second, to increase accountability, enforceability, and enforcement and deterrence. The third is to focus on risks over the life cycle of imported products. The fourth is to build interoperable systems. Fifth is to foster a culture of collaboration. And last, to promote technologic innovation and new science that help us do a better job. It was an FDA inspector who said, Mr. Secretary, our job is to find the needle in the haystack, and we have to start first with technology to shrink the size of the haystack.

Later....

As a next step, an action plan will be submitted to the President. We intend to do so by mid-November. It will lay out a road map with short and long-term recommendations for improving import safety. Those recommendations are still very much under discussion, and our conclusions about them will depend heavily on what we hear today.




And from Conner:
The import issues are arising against a backdrop of continued growth in our own agricultural exports. They are on-track of course to set a record of $79 billion in sales this year, and our imports of agricultural products aren't far behind. We expect them to approach $70 billion as well. Now we expect both categories to be up more than $4 billion next year. We cannot afford to jeopardize such a large portion of our agricultural and frankly our national economy.
When an import of a certain product is contaminated, even if only a tiny percentage of the product is affected, of course, everyone suffers. We must be vigilant about maintaining our high standards for food quality and safety that American consumers expect. We owe it not only to our consumers but of course our farmers and ranchers and producers as well. And we must work with our trading partners to share best practices and agree on common standards of science-based approaches for food safety. This will allow us to quickly and effectively tackle any problems that arise in the future.
That is why we are looking forward to hearing your ideas on what should be done to improve the import safety regulations and practices that we have in place today.

Can food stamps do more?

A new USDA report unpacks the issue of how food stamps relate to food choices. The Sept. 27 report is titled 'Can Food Stamps Do More To Improve Food Choices? An Economic Perspective" and can be found here.

From the report summary:

Meaningful improvements in the diets of food stamp recipients will likely depend on a combination of many tactics. Some appear to be more promising than others: Untargeted increases in food stamp benefits may not improve the nutritional quality of food choices. A general, untargeted increase in food stamp benefits, while increasing household income and food spending, may not improve the nutritional quality of food choices. Besides nutrition, households have other competing preferences, such as convenience. Consumer expenditure data indicate that these other competing preferences appear to take priority over spending on fruits and vegetables.

Targeted price manipulation through bonuses or coupons for food stamp participants to purchase fruits and vegetables may be more successful. Offering a bonus to purchase targeted foods essentially lowers the price of the foods. ERS estimates of low-income consumers’ response to changes in the price of fruits and vegetables indicate that a 20-percent price reduction would raise fruit and vegetable consumption to 2.2 cups per day—an improvement, although still not meeting current Federal recommendations for typical adults.

Restricting purchases of “unhealthful” foods and beverages does not appear to be a promising strategy for dietary improvement. Policies that prohibit the use of food stamp benefits for purchasing specific foods, such as candy or soft drinks, may or may not limit purchase of these foods. Most food stamp recipients use some of their own money as well as food stamp benefits to purchase foods and may simply change the mix of foods they purchase with cash versus food stamp benefits. Even if food stamp recipients stop buying prohibited items, given the diversity of food products available for sale and the ingenuity of the food industry to develop new ones (for example, a prohibited candy bar adapted into a chocolate “granola bar”), many near substitutes are likely to be available. The consumer would still make the decision to choose either more healthful foods, such as fruits and vegetables, or foods and beverages that, although not restricted, are essentially similar to the prohibited items.
Nutrition education can improve food choices, but consistent improvement is difficult: behavioral economics may suggest some strategies that can help. Nutrition information can prompt consumers to change their food choices—for example, to shift from whole to low-fat milk. However, consistent dietary improvement is difficult because the individual’s desire for the longrun benefits of nutrition and health can conflict with short-term preferences for taste or convenience. Behavioral economics research has generated new ideas for how policies and environments might be modified to help individuals with such competing preferences act more consistently in their long-term best interest. Some of these ideas, such as allowing participants to pre-commit to buying a certain amount of healthful foods with their food stamp benefits, warrant further investigation.
Improved evaluation data and methods are needed to assess the effects of policy changes. Without adequate evaluation, policymakers will never know whether any changes in Food Stamp Program policies are effective. ERS is working to enhance program evaluation through expanded data and improvements in measures and analytical methodology.

TK: This study recommends targeted incentives above all other approaches, and the government could certainly show more creativity and commitment in that regard. The war on obesity appears to be a pillow fight at this point.

Mixed bag

Potato prices are up from last year, but vegetable and fruit prices at the grower level are down. Here is the link to September's USDA report on Agricultural Prices:
From the report:


Potatoes & Dry Beans: The September index, at 115, is down4.2 percent from last month but 11 percent above September 2006. The all potato price, at $6.47 per cwt, is down 40 cents from August but up 35 cents from last September. The all dry bean price, at $24.90 per cwt, is down 90 cents from the previous month but $6.10 above September 2006.

Fruits & Nuts: The September index, at 163, is up 5.8 percent from August but 6.3 percent lower than a year ago. Price increases for apples, grapes, peaches, and lemons more than offset price decreases for strawberries, oranges, and pears.


Commercial Vegetables:
The September index, at 154, is up 10 percent from last month but 2.5 percent below September 2006. Price increases during September for lettuce, tomatoes, cucumbers, and celery more than offset price declines for onions, broccoli,snap beans, and carrots.

Check out the calendar

I just added a Google calendar for industry events to the bottom of the blog. I've only just begun to add events to it from The Packer's regional and national calendars. Feel free to send me by email industry related events to mark in the calendar.

Delicious diversity

One of the things that I like about the RSS feeds I have linked into the blog is their political diversity. For example, on one hand I have plugged in the latest FDA-bashing headline from the Center for Science in the Public Interest and at the other spectrum you have Dennis Avery at the Center for Global Food Issues casting doubt over global warming and erosion-prone farming methods of organic growers.

Avery says this in a post about organic farming methods and the impact of those methods after heavy rains in Minnesota:

“Unfortunately, Rick, 28 counties in your region are famous for mudslides, massive soil erosion and Black Blizzard dust clouds. The Upper Mississippi Loess Hills are unstable leftovers from the last Ice Age. During the Dust Bowl, they suffered 15 times as much erosion as they do today. Without careful farming they could start eroding again, triggered by an erosion event like last month’s “thousand-year” rain.
Organic farmers refuse to use no-till farming, and this is nearly criminal in the Loess Hills. Dr. Stanley Trimble, America’s top soil erosion expert, says Loess Hills farmers cut their erosion by 95 percent after the Dust Bowl, using contour planting, more crop rotations, fencing off woodlots—and more recently, low-till farming.

During this weather event, organic farming simply wasn’t as soil-safe as no-till, and only 30% better than obsolete chisel tillage (still used by many organic farmers.) All the talk about organic farmers creating better soil health didn’t make any difference to those raindrops.

Meanwhile, the left leaning Center for Science in the Public Interest says this about the FDA reform bill:

The FDA reform bill that passed the House on Wednesday and the Senate last night represents a step forward in protecting scientific integrity at the Food and Drug Administration. However, given the magnitude of the problems in drug and food safety that have come to light in recent years, the bill falls far short of spurring the dramatic changes that the public needs and deserves.

TK: While both ends of the idea spectrum are entertaining, the produce industry cannot afford the luxury of taking the reactionary position of a Dennis Avery and won't abide everything that Caroline Smith DeWall has to say about reforming FDA. Forging a consensus on what regulation is acceptable and workable for produce growers - not rejecting government involvement out of hand - is where the future lies.

Monday morning coming down

I've spent a good part of the last hour updating links on the blog, so I hope you explore some of The Packer's news stories this week, not to mention TK Headline Picks and the latest postings from the Fresh Produce Industry Discussion Group. Farm bill markup, House Agriculture Committee hearings on border inspections and more talk about food safety are likely to dominate much of the buzz on the blog this week.

Got a little feedback on the PMA-United story from Tom Stenzel of United. Tom pointed out United's "solid financial footing" reference seems to cast the issue as a question, an answer needed to resolve doubt. It rubbed him the wrong way.

Tom says:

Incidentally, the 2007 (990) report is coming soon, with the year-end audit showing $6.5 million in annual revenues; $161,000 in net income for the year; and $3.3 million in long term reserves. Sixth straight year of financial growth, and greater than 100 new members annually.


TK: While the perception and reality may be that PMA is more cash flush than United, Tom makes a valid point here. As PMA and United's merger talks have concluded, the fresh produce trade seems to be supporting and sustaining the programs of both groups.