Irradiation: now more than ever

I'm putting together a story this week about fresh guava imports from Mexico(Big Apple posted the FR notice on the Fresh Produce Industry Discussion Group this morning) , and one of the sources for the story is director of a company that is building a Mexican irradiation facility that should open around April of 2009. I'll leave details and quotes for the story, but the gist is that irradiation will finally arrive in a big way next year. Fresh guavas, mangoes, even Mexican citrus could be heading to the U.S. after irradiation treatment for phytosanitary purposes in the not too distant future. In fact, another already operating irradiation facility in Mexico City will be ready to send fresh guava to the U.S. in mere weeks, says my source.

The source said that consumer acceptance of irradiation is not a big feature of his business plan. He speculated that the radura symbol may soon no longer be required by the FDA for irradiated food; rule making to that end is already in process, but the timing of the final determination is unknown.

In any case, isn't irradiation superior to methyl bromide fumigation, which releases a fumigant that can damage the ozone layer? He made the point that any concept can be made to sound scary; for example, what consumer would be jazzed about eating fruit that has been treated with methyl bromide? Would you eat fruit washed with dihydrogen monoxide? Heck no.

We have seen relatively small volumes of fresh produce irradiated in the last several years; the 20 million plus Latin heritage population in the U.S. may once and for all speak for all of the market and put the "market acceptance" issue to rest when the coveted guava is shipped from Mexico.

Harkin on financial derivatives

From the office of Sen. Tom Harkin from today's Senate Ag Hearing exploring the role of financial derivatives:

“We are holding this hearing in the midst of the deepest and most far-reaching financial crisis in nearly 80 years. Major U.S. financial institutions which were thought to be rock-solid are now in bankruptcy, have been sold for pennies on the dollar, or are on life-support from U.S. taxpayers. Money and capital are not flowing, families and businesses cannot get the credit they need, and our already weak economy has sunk further into recession. U.S. economic growth is flat to negative, jobs are being lost and unemployment is climbing. Though stock prices rose yesterday, at the end of last week the Dow-Jones Average had fallen 40 percent in the preceding year and stocks in the Wilshire 5000 Index lost $8.4 trillion in value in the same period. And farm commodity prices have fallen dramatically.

“We all understand the urgent and critical need to revive the financial markets and return them to functioning. We in Congress went along with a modified version of the administration’s rescue plan because the stakes are so high. We hope some of those outlays, which will likely well exceed $700 billion, will come back to the Treasury, but there is no assurance of that. How will it be paid for? By borrowing; by adding to the national debt. That means our children and grandchildren will be paying for it. What’s more, saving the financial sector makes it all that much harder to pay for our nation’s other needs and to fund genuine investments in the future such as education, a better health care system, medical and other research, or renewable energy.

“If we are going to borrow against the future to save the financial sector, then we had better make sure that money is well spent. If Wall Street is an emergency room patient, we cannot just give a big blood transfusion without stanching the bleeding – without attacking ails the patient. We have to get to the root of how our nation’s financial system has fallen into this crisis, then fix the problems in order to restore and rebuild fundamental soundness, confidence, and integrity to those markets and our overall economy.

“We have all heard much about the impact of nonperforming real estate loans. Real estate mortgages were packaged, and then securities backed by those mortgages were sold to investors. But far too many of the securities sold to investors were risky – certainly riskier than their ratings indicated – because the underlying mortgages were risky – toxic is the word now used. Now we are learning about another layer of risk that was added on top of the risk from junk securities.

“We now know this financial crisis and the collapse of key financial institutions owe a great deal to the extensive commerce in credit default swaps and similar contracts. Credit-default swap contracts were written and sold to pay out in case of loss on a variety of securities and financial obligations – including securities backed by unsound mortgages. In other words, credit-default swaps were issued and used in ways that made highly risky investments seem sound. Now, as the losses mount on the securities and other obligations, those responsible under the credit-default swaps are having to pay up – in amounts that greatly exceed anything the issuers and sellers of the swaps expected and anything the financial sector could withstand.

“The total outstanding notional, or face, value of credit-default swaps exploded to a high of some $62 trillion worldwide last year, according to the International Swaps and Derivatives Association. That roughly equals the gross domestic product of the entire world for 2008. And the total face value of all types of financial swaps was some $587 trillion worldwide at the end of last year. So the market in swaps is vastly greater than the value of any underlying assets – in part because an investor can enter the swaps market without owning a bond or any other interest at risk. This huge multiplication of leveraging with the help of credit-default swaps has now come home to roost with a terrible vengeance. That is why Warren Buffett called derivatives “financial weapons of mass destruction.”

“Credit-default swap contracts function somewhat akin to insurance, but are purposely not written like insurance and thus avoid the safeguards of insurance policies. Swaps contracts also function much like futures contracts, but they are not regulated as futures contracts because of a statutory exclusion from the authority of the Commodity Futures Trading Commission. So they need not be traded on open, transparent exchanges, and as a result, it is nearly impossible to know whether swaps are being traded at fair value or whether institutions trading them are becoming overly leveraged or dangerously overextended.

“We are told that the traders and institutions involved in financial derivatives are highly capitalized and sophisticated. They can look after themselves. The credit-default swaps and derivatives have been put together by mathematics and physics geniuses, but carried out without an understanding of human behavior and market behavior. What they thought were tools to manage and limit risk have turned out to magnify and amplify risk. Yes, these derivatives may be devised and traded by sophisticated parties, and I am not worried about them. The problem is that their miscalculations and blunders have put our national economy on the precipice.

“We cannot simply condone anything and everything done in the financial markets in pursuit of huge profits. What is good for Wall Street banks and money managers is not necessarily what is good for our economy and society. We have seen that time and again. We also we must question the soundness of our economy’s ever-greater dependence upon the financial sector. In 1948, 56 percent of the profits of U.S. companies were in manufacturing while 8.3 percent were in the financial sector. But in 2007, only 19 percent of profits were from manufacturing, while 26 percent were from the financial sector.

“I am a firm believer in capitalism, in markets, and in financial sector innovation. What I am not in favor of is what has come to be known as market fundamentalism – the idea that the market knows best and must be allowed freely to make and correct its errors. Recent events have once again shown that the stakes are too high for our entire economy to follow this sort of rigid ideology. Regulations must be reasonable and allow financial markets to function effectively and efficiently to move capital and credit to where they are needed in our economy. Yet we must have regulations that will protect the rest of our economy from the excesses in the financial markets – to protect all Americans from collateral damage when the financial sector makes a blunder.

“In my mind there is no question that we must adopt a stronger system of regulation and oversight for over-the-counter swaps and derivatives. It is hard for me to see how we are going to put our financial sector and our economy back on a sound footing unless we do so. I welcome our witnesses and look forward to hearing from them.”

What will happen to illegals and why we should care

Another great stream of consciousness thread from an immigration discussion board, this time about the topic of what will happen to illegals if the economy tanks. As usual, there is more heat than light....from the board:

The opening comment:

One good thing about the the stock market crash: the illegals will be deported just like they were the last around.

http://www.dallasnews.com/sharedcontent/dws/news/localnews/stories/10...
DIANNE SOLÍS / The Dallas Morning News dso...@dallasnews.com
The stock market tanked, unemployment rose and cries grew forceful against Mexican immigrants.
It was 1930.
In the decade that followed, an estimated 1 million people went to Mexico in a wave of deportations and voluntary repatriations. As many as half of them, it is believed, were U.S. citizens of Mexican ancestry.
[Since most Mexicans don't differentiate between legal and illegal when it comes to being here and working here why should we differentiate between legal and illegal when comes to deporting them?]


Reaction......

So far as I'm concerned, if they ever came here illegally then they and their children are in this land fraudulently and will be removed. They play on a level that everything is about racial-ethnic tribe, and we are foolish to play any other way with them. They are right about that, we should take them up on on it beginning tomorrow. It 1930 all over again, lets give than all the road south


Another....

I'll ask again. Exactly who do you think is going to pick those grapes? Ex-investment bankers?


Another.....

You may think you need them out there in Mexafornia. It's obvious that you don't get around much. A lot of places in this country don't have them, don't need them, and are doing just fine without them. Send them all back. They won't be missed.


Another....

Beep - wrong Very wrong. During the depression and up until WWII migrant labor (read displaced farmers, Okies, etc;) picked the overwhelming amount of grapes, fruit, and produce. After the war and well into the 80's they were picked by braceros and UFW migrant labor. It was only during the 80's and going forward that illegals began picking after imported labor programs were halted. Agriculture in CA and the rest of the West and S/West has always been this way. The myth of HS students and college students doing this in any large numbers is bogus, and nothing more than an urban legend. Try again - both your ignorance and racism are showing.

Another....

And if NECESSARY mechanization will quickly occur, but so long as the cheap Mexican labor was available it wasn't necessary. We will get by. Illegals greatly exaggerate their importance. And if there is some crop that can not be mechanized, and I doubt that that will prove to be the case, we will substitute or do without. It is no big thing to anybody. This country does not need one single f*cking illegal.
By the way, the government's effort to mechanize the harvest in California was halted in the seventies, and has remained halted ever since. It turned out to be rather easy to mechanize the California tomato crop, although most people had thought it could not be done. The social do gooders, then, complained to Carter that the machines were putting people out of work. So all further machine development was stopped. Since then the government has simply made sure that plenty of illegals got across the border.


Another...

Did I say anybody needed illegals per se? You wish to tell me where? What is necessary out West is workers to perform the necessary tasks. Trailer trash such as yourself won't do it. Folks with little education like yourself won't do the work. So who's left? College and high school students? Sure thing. Hey I'm all for guarding the borders - just give agriculture and other seasonal work access to workers. Forget the illegals working in meat packing plants, etc; Send 'em home. What isn't understood about the term illegal? You assumed something that was never said - like a lemming going off a cliff. Next time - look

Another....

California is on the verge of bankruptcy. The state is looking to the government for a $7 billion loan. It was recently announced that illegal aliens cost California $11 billion a year. It almost looks like we deserve being broke, doesn't it....just for sheer stupidity....AAC
Then there's illegal immigration. We have 12-20 million foreigners who have entered our country illegally and we have hundreds of thousands more pouring over the borders each year. Many of these illegals are poorly educated, don't speak English, have no loyalty to or respect for America, commit identity fraud, ignore deportation orders from judges, don't pay taxes, and have children in this country so they can use them to collect welfare and food stamps. In parts of the nation, illegals are also at the root of crime waves, are overcrowding our schools, and are driving up car insurance rates and running hospitals into the ground.
My friends, if we don't have a border and enforce it, eventually, we're not going to have a country. The Roman Empire found that out the hard way and for that matter, so did the Indians when our ancestors arrived here. A lot of people believe that, "it can't happen here," but that's probably what Mexico said right before all the Americans who moved into Texas declared that they were living in an independent state. Unless we do something to slow the growth of illegal immigration, one day parts of this country may suffer the same fate.

End of organics as we know it

Is organic still organic if produced in a factory farm? This news release from the Cornucopia Institute takes shots at large scale organic dairy operations, aka organic "scofflaws.."

Groups representing organic farmers and their customers are calling on consumers to help save the organic industry by exclusively patronizing dairies, and other brands, that uphold the spirit and letter of the federal organic law. They claim the acquisition of major brands by corporate agribusiness, and their dependence on factory farms, threatens to force families off the land and deprive consumers of the superior nutritional food they think they are paying for.
"This could be the end of the organic industry as we know it," said Mark A. Kastel, codirector of The Cornucopia Institute, widely recognized as the organic industry's most aggressive farming watchdog. The Institute reports that the proliferation of industrial-scale dairies has bloated the organic milk supply, inflated the price of feed for dairy cows, and resulted in a financial crisis for family farmers, even as the market continues to grow—defying the general economic downturn.

Later..

The dairy segment, second only behind fresh fruits and vegetables, represents nearly $4 billion worth of annual revenue or about 15 to 20% of the organic industry.

For eight years, participants in the organic community—farmers, consumers, retailers, and other stakeholders—have fought the industrialization of organic milk by giant corporations and factory farms milking as many as 10,000 animals. Although the National Organic Standards Board, the expert panel set up by Congress to advise the Secretary of Agriculture, has voted to crack down on industry scofflaws five times since 2000, Bush administration officials have refused to act.