Healthy Profits For Whole Foods - Forbes

Healthy Profits For Whole Foods - Forbes
Miriam Marcus, 02.16.10, 05:30 PM EST
Grocery chain tops quarterly estimates, ups full year outlook.


Shares of Whole Foods Market surged in afterhours trading Tuesday after the health food grocery chain posted fiscal-first-quarter earnings well ahead of analysts’ expectations.

Whole Foods Market ( WFMI - news - people ) said it earned $49.7 million, or 32 cents per share, in the 17 weeks that ended Jan. 17, compared with a year-earlier profit of $27.8 million, or 20 cents per share. The figures beat expectations for earnings of 26 cents per share. Quarterly revenue of $2.6 billion was in line with Wall Street’s predictions. Whole Foods shares gained 2.6% to close at $30.52, ahead of the earnings report, and then pushed up another 6.2% in afterhours activity.

Chief Executive John Mackey pointed out that Whole Foods’ pricing shift last year “from being fairly reactionary” to “being much more strategic” has played out successfully, producing “strong year-over-year improvement in gross margin and comparable store sales growth.” The grocery chain was hit hard by economic recession as cash-strapped consumers cut back on a range of spending, including groceries and particularly on the high-end and premium organic products that Whole Foods peddles.

The company’s pricing shift clearly paid off. In the recent quarter, same-store sales increased 3.5%, leading the Austin, Tex. company to up its expectations for full-year sales. Whole Foods now expects sales to grow as much as 10.5% this year, with comp sales growing as much as 5.5%. In line with its renewed forecast, Whole Foods also raised its full-year earnings guidance to a range of $1.20 to $1.25 per share, well ahead of analysts’ expectations for EPS of $1.10. Whole Foods conceded that its fourth quarter will be weakest as a result of seasonal swings in grocery trends.

While Whole Foods picked up in high-end grocery shopping, packaged-food maker Kraft Foods ( KFT - news - people ) said Tuesday that its quarterly earnings jumped to $710 million, from $178 million last year, and it is counting on the $18.6 billion Cadbury ( CBY - news - people ) acquisition to help steer future growth. (See “Kraft Counts On Cadbury, Increasing Demand.”) Shares of Kraft closed down 0.4% to $28.97 while American depositary receipts of Cadbury added 0.7% to close at $53.07 on Tuesday.

In 2007 a federal appeals court cleared the way for Whole Foods to buy rival organic grocer Wild Oats Markets, denying a request by the Federal Trade Commission to block the $565 million merger. (See “Court Frees Whole Foods To Swallow Wild Oats.”)

Israel PM reviving idea of VAT on fresh fruit, vegetables - Haaretz.com

Israel PM reviving idea of VAT on fresh fruit, vegetables - Haaretz.com
By Zvi Zrahiya


Prime Minister Benjamin Netanyahu is once again considering imposing value-added tax on fruits and vegetables. But unlike last year's proposal to levy full 16.5% VAT on produce, a move that generated broad opposition, this time Netanyahu wants a tax of only 1%.

The new proposal, which was announced in an internal meeting last week, is intended to improve reporting for tax purposes.
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Fruits and vegetables are currently exempted from VAT altogether, and changing this will require Knesset approval. Netanyahu did not set a timetable for the proposed bill, but sources say that it may be considered during the deliberations on the 2011 state budget.

A 1% VAT will generate revenues of about NIS 100 million, but Knesset sources said this is not the primary aim, but rather enforcing regulation on the produce sector.

Because fruits and vegetables are exempt from VAT, regulators believe that people who have multiple operations, including one in an industry subject to VAT, may report the revenue from that business as coming from fruit and vegetable sales, in order to avoid paying VAT. The 1% tax will make it easier for authorities to regulate the industry, particularly given the trend of shifting to paper-free invoices.

The idea of differential VAT rates faces broad opposition within the Finance Ministry, and naysayers maintain that a single rate of 16% should be applied to all sectors. Nevertheless, sources believe there will be minimal opposition to a 1% tax, due to hopes of improving income reporting. Knesset sources say the move could open the door for future tax hikes on fruit and vegetables, once the initial idea gains approval.

Unlike the broad opposition that the idea provoked last year, due to the implications of such a move for poorer consumers, VAT of just 1% will undermine the argument of opponents of the prior plan, since the effect on consumer prices will be minimal, Knesset sources say.

Steinitz won't object

In June 2009 the government tried to levy a 16.5% VAT tax on vegetables, but objections from economists and political activists alike halted the move. On July 7, Netanyahu announced that the decision had been rescinded, citing public demands.

Finance Minister Yuval Steinitz expressed dissatisfaction with Netanyahu's decision. "Exempting fruits and vegetables from VAT distorts the market, and this should have been fixed," Steinitz said at the time. Based on Steinitz's past comments, Knesset sources say he is not expected to object to Netanyahu's current proposal.

Is this the future of food? Japanese 'plant factory' churn out immaculate vegetables - Daily Mail

Is this the future of food? Japanese 'plant factory' churn out immaculate vegetables - Daily Mail

By David Derbyshire
Last updated at 9:56 AM on 03rd June 2009

They look more like the brightly lit shelves of a chemists shop than the rows of a vegetable garden.

But according to their creators, these perfect looking vegetables could be the future of food.

In a perfectly controlled and totally sterile environment - uncontaminated by dirt, insects or fresh air - Japanese scientists are developing a new way of growing vegetables.
Enlarge ozu

Food of the future? Lettuces are grown in a sterile environment at Ozu Corporation's plant factory in Japan - without being exposed to the air outside

Called plant factories, these anonymous looking warehouses have sprung up across the country and can churn out immaculate looking lettuces and green leaves 24 hours a day, seven days a week.

Every part of the plant's environment is controlled - from the lighting and temperature, to the humidity and water. Even the levels of carbon dioxide can be minutely altered.

Rather than the conventional scruffy clothes and dirty fingernails of vegetable growers, the producers wear gloves, surgical masks and sort of dust proof protective suits normally seen in chemical plants.
A worker - dressed in sterile clothing - tends to the lettuce at the 'plant factory'

Those growing the vegetables wear gloves, surgical masks and the sort of dust proof protective suits normally seen in chemical plants

The vegetables from plant factories - which include green leaf, romaine lettuce and garland chrysanthemum - are sold at a premium to Japanese shoppers. No pesticides are used - and there is no risk of contamination with food poisoning bugs.


Because the plants are grown in a clean room, they can be eaten safely without washing. Lettuce grown in the factories can be cropped up to 20 times a year.

Some factories are vast - and can produce three million vegetables a year.

The results are hygienic, but it's about as far from real food as you can possibly get.
Enlarge Every element of the plant's environment is being controlled

From the lighting to temperature and humidity, every element of the plant's environment is carefully controlled

The spread of plant factories has been encouraged by the Japanese government amid concerns about the use of chemicals in vegetables.

A spokesman for the Ozu Corporation factory in Tokyo said: 'Vegetables are produced in the factory without being exposed to the air outside.

'Stable production is guaranteed throughout the year by controlling lighting, temperature, humidity, carbon dioxide and water. They can also meet the demands of consumers who want safe foods.'

Plant factories have yet to arrive in the UK. The closest Britain has are the vast greenhouses in the south of England where millions of tomatoes are grown hydroponically - without soil.

Q&A with Agriculture Secretary Tom Vilsack - Washington Post

Q&A with Agriculture Secretary Tom Vilsack - Washington Post

When Tom Vilsack became head of the Agriculture Department last year, he faced a backlog of 11,000 civil rights complaints and several unresolved class-action lawsuits from minority farmers and ranchers.

The largest case, known as Pigford, remains open. It originally was settled in 1999 for $1 billion after 16,000 black farmers said they had been unfairly denied farm loans. Thousands of black farmers later complained that they were unaware of the suit, and in 2008 it was reopened. Some farmers have said the Obama administration is not moving fast enough, and on Monday they protested outside the USDA headquarters.

Vilsack said in an interview Friday that he is close to a resolution and is working hard to transform the department's handling of civil rights.

Q You've announced a "new civil rights era" for the USDA and made civil rights one of the signature issues of your administration. Why are these issues important to you?

When this department was established in 1862 by Abraham Lincoln, he referred to it as the people's department. In order to be consistent with that legacy, it's necessary that our programs and our approach reflect an appreciation for everyone's rights. We took a look at [these] prior issues and are in the process of trying to address each of them.
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The USDA is also being sued by Hispanic farmers and female farmers who allege discriminatory practices. What are the biggest challenges facing the USDA in terms of resolving civil rights cases and enforcing civil rights laws?

There are three different areas of concerns. One area is the pending lawsuits against the department from farmers and ranchers who feel that they have been mistreated by the department. We've been very, very focused on trying to get lawsuits moving towards a resolution. We are aggressively reaching out to [plaintiffs to] begin negotiations and discussions to try to get these cases resolved as fairly and appropriately as possible. We [also] have ongoing program complaints from people who are currently doing business with USDA. Then, within the 113,000 people that work for USDA, there are obviously concerns expressed from time to time by employees.

What is your approach to those three areas and what are your goals?

We have begun a systematic process of reviewing the over 11,000 complaints that had been filed during the previous eight years and determined that there were approximately 3,800 matters that required additional review. We hired additional inspectors, investigators and decision-makers to try to figure out precisely how many of those complaints were justified. [About 7,200 cases did not require additional review.] In terms of the complaints that had merit, the statue of limitations has run out for many and we are asking Congress to grant extensions in those cases. Finally, we've begun a very extensive process to reduce our equal-opportunity complaints [within USDA], and we've seen a reduction in those complaints with better [civil rights] training.

Over the years, black farmers began referring to the USDA as the 'last plantation.' . . . Many of their complaints were directed at their local farm service offices, where regional officials had the power to deny farm operating loans to certain groups. . . . How do you change the culture of such a large, disparate agency?

We've tasked our administrative department with . . . changing the culture at USDA, and it's not just focused on civil rights. It's focused on making sure that all employees are valued and making sure that all employees appreciate not only their responsibilities but their opportunities at USDA.

We've had civil rights training in a number of our state offices, both for the farm agency offices and rural development state offices. We've also created a more robust compliance review schedule so that we can take a look at data, take a look at information, take a look at trends to determine whether we are making progress.

In terms of our external programs, we have commissioned an independent study and evaluation to take a hard look at what we're doing. The programming side [of USDA] involves not just programs for farmers, but also rural development programs for developing housing. We're in the process of making sure we're sensitive [to civil rights issues] in those two areas.

We have hired the Jackson Lewis Corporate Diversity Counseling group, under the leadership of Weldon Latham, to take a hard look at what we're doing to see if there are ways we can make improvements and to look at program delivery in a number of states where we have had issues in the past.

How close are you to a settlement on the outstanding [Pigford] claims?

In terms of Pigford, the president authorized us to talk about a settlement fund in excess of $1.1 billion, and we have been working with the Department of Justice on that. They, in turn, have been working with plaintiff's lawyers to try to determine how those resources could be allocated. I think we're very, very close to a resolution of that case. We are within a matter of days or perhaps even hours in getting this thing finally resolved.

Why Some Foods Are Riskier Today - WSJ

Why Some Foods Are Riskier Today - WSJ

Within the past few weeks there has been a salmonella outbreak linked to a sausage and salami facility in Rhode Island, a recall of chewy chocolate chip granola bars in California also potentially contaminated with salmonella and a recall of cheese in Washington state potentially contaminated with listeria monocytogenes, which can cause serious, sometimes fatal, infections. While the sausage contamination resulted in 225 people becoming ill in 44 states, the other two recalls didn't involve any illnesses. Without stricter food-safety enforcement, though, consumers may not be so lucky.

A growing number of Americans have been sickened by foodborne illness—in many cases from food they never considered risky. While most of the 76 million reported foodborne illnesses a year are mild, 325,000 hospitalizations and 5,000 deaths are related to tainted food each year. Foodborne illness outbreaks appear to be increasing, the Food and Drug Administration says.

That's partly due to better surveillance and detection methods. But it's also because new disease-causing organisms have emerged and imports of food from countries without the same safety standards as the U.S. are on the rise. What's more, consumers are demanding less-processed foods such as raw milk and fresh juices that aren't cooked or pasteurized to kill bacteria.

Pending food-safety legislation would give the FDA sweeping new powers to police food safety and focus its efforts on preventing food contamination. The House passed a food-safety bill in July, and a similar bill is awaiting a full vote in the Senate. Food-safety advocates are hoping that a compromise measure will become law this year, which would allow the FDA to heighten its inspection of imported food, set safety standards for fresh produce, force companies to recall tainted products, and require companies to keep better production records.

Food industry groups have taken a number of steps to make food safer, including creating industry guidelines to minimize bacterial contamination on farms and meat-processing facilities. Food processors are also working on programs to better trace products through the supply chain. They also point out that while Americans consume about one billion servings of fresh produce every day, according to the United Fresh Produce Association, illness outbreaks are rare.

But while the U.S. food supply is still among the safest in the world, "there are many gaps in our country's food safety net that could result in serious adverse public health consequences," says Michael Doyle, director of the University of Georgia's Center for Food Safety.

Among the most serious concerns: a rise in imports to meet consumer demand for year-round fresh produce and fish, among other items. The FDA currently lacks oversight of food from countries that don't have the same level of sanitary practices as required in the U.S., Dr. Doyle says. That's one reason why disease outbreaks have been linked to imported green onions and jalapeno peppers from Mexico, white pepper from Southeast Asia and dried vegetable powder from China used on potato chips. Consumers may also ignore warnings about unsafe food habits because of preferences for foods such as raw oysters, rare hamburgers, fresh juices, unpasteurized cheese and runny egg yolks, which all carry higher risks of contamination.

Last May, College of Charleston student Margo Moskowtiz says she took a small bite of raw Nestle Toll House chocolate chip cookie dough before baking the entire batch—and ended up in the hospital for a week with an e.Coli 0157 infection—a strain of a bacteria that can cause severe illness, kidney failure and even death. Though the Nestle label carries warnings to bake the product before consuming it, Ms. Moskowitz admits, "I've eaten raw cookie dough a million times" without incident. Nestle recalled the refrigerated dough products in June after illnesses were reported in 28 states. In January, however, the company found e. coli in two samples of dough in a Virginia factory. After determining that flour was the likely source, it halted production to reformulate the dough with a form of heat-treated flour to kill bacteria. The FDA subsequently put out a warning reminding consumers to avoid eating raw cookie dough.

While flour hasn't been considered a risk factor in the past, bulk raw commodities like flour and pepper may be contaminated during processing by bacteria carried in rodent droppings in factories, or in processing facilities near farm animals, says Sam Beattie, a food science specialist at Iowa State University.

"We live in a microbial world, where we are going to consume a certain amount of microorganisms no matter what we do," says Dr. Beattie. "For most people the risks of illness are low." However, he says, it's wise for pregnant women, the elderly, children, and those with compromised immune systems to take extra precautions.

The FDA and the Centers for Disease Control and Prevention provide advice for consumers on their Web sites about how to avoid foodborne illness and prepare food safely. MakeOurFoodsSafe.org, a coalition of public health organizations, consumer organizations, and groups representing the families of victims of foodborne illness includes members such as Safe Tables Our Priority, which allows consumers to sign up for email alerts on food outbreaks.

Donna Rosenbaum, the group's executive director says consumers don't always have the information they need to make safe choices. For example, safety questions have been raised about fish from countries such as Thailand and China grown in ponds in which raw animal manure and human sewage are used as nutrients. But if fish imported from Southeast Asia stops in San Francisco and is dredged in flour or marinated before being sent to the grocery store in a package, the fish's origin may not be labeled. Safety advocates say taking precautions in buying and preparing food can only go so far.

"We have to provide the FDA with the tools it needs to prevent problems" says Sandra Eskin, director of the food safety campaign at the nonprofit Pew Charitable Trusts. "Without a modernized law there is only so much we can do as consumers to protect ourselves."

Diet may prevent cancer, according to expert - Health News

Diet may prevent cancer, according to expert - Health News

By Health News Team • Feb 16th, 2010 • Category: Diet, True Health News

Researcher says diet may help prevent against cancerA top Italian cancer researcher says that diet is crucial for preventing cancer.

Professor Attilio Giacosa is one of the most vocal supporters of the "preventative diet," advocating the consumption of fruit and vegetables as one of the best means of cancer prevention.

"Case-control studies have irrefutably demonstrated a protective role of fruits and vegetables against many types of cancer in diverse social, environmental, geographic situations, especially for tumors of the lung, oral cavity, esophagus, stomach and intestine," he says.

Oranges, garlic, cabbage, broccoli, cauliflower and brussels sprouts are among some of the most beneficial foods, according to Giacosa.

The way individuals prepare their food can affect how healthy it really is as well. Giacosa says fresh, local produce is preferred for the preventative diet. In addition, he says steaming or microwaving is the best way to ensure vegetables maintain their nutrition.

He also says a glass or two of red wine each day may help prevent the disease. Red wine contains high levels of polyphenols, which are substances that are high in antioxidants and known to contain disease-fighting properties.ADNFCR-2035-ID-19617154-ADNFCR

The Continuing Climate Meltdown - WSJ

The Continuing Climate Meltdown - WSJ

More embarrassments for the U.N. and 'settled' science.

It has been a bad—make that dreadful—few weeks for what used to be called the "settled science" of global warming, and especially for the U.N. Intergovernmental Panel on Climate Change that is supposed to be its gold standard.

First it turns out that the Himalayan glaciers are not going to melt anytime soon, notwithstanding dire U.N. predictions. Next came news that an IPCC claim that global warming could destroy 40% of the Amazon was based on a report by an environmental pressure group. Other IPCC sources of scholarly note have included a mountaineering magazine and a student paper.

Since the climategate email story broke in November, the standard defense is that while the scandal may have revealed some all-too-human behavior by a handful of leading climatologists, it made no difference to the underlying science. We think the science is still disputable. But there's no doubt that climategate has spurred at least some reporters to scrutinize the IPCC's headline-grabbing claims in a way they had rarely done previously.

Take the rain forest claim. In its 2007 report, the IPCC wrote that "up to 40% of the Amazonian forests could react drastically to even a slight reduction in precipitation; this means that the tropical vegetation, hydrology and climate system in South America could change very rapidly to another steady state."

But as Jonathan Leake of London's Sunday Times reported last month, those claims were based on a report from the World Wildlife Fund, which in turn had fundamentally misrepresented a study in the journal Nature. The Nature study, Mr. Leake writes, "did not assess rainfall but in fact looked at the impact on the forest of human activity such as logging and burning."

The IPCC has relied on World Wildlife Fund studies regarding the "transformation of natural coastal areas," the "destruction of more mangroves," "glacial lake outbursts causing mudflows and avalanches," changes in the ecosystem of the "Mesoamerican reef," and so on. The Wildlife Fund is a green lobby that believes in global warming, and its "research" reflects its advocacy, not the scientific method.

The IPCC has also cited a study by British climatologist Nigel Arnell claiming that global warming could deplete water resources for as many as 4.5 billion people by the year 2085. But as our Anne Jolis reported in our European edition, the IPCC neglected to include Mr. Arnell's corollary finding, which is that global warming could also increase water resources for as many as six billion people.

The IPCC report made aggressive claims that "extreme weather-related events" had led to "rapidly rising costs." Never mind that the link between global warming and storms like Hurricane Katrina remains tenuous at best. More astonishing (or, maybe, not so astonishing) is that the IPCC again based its assertion on a single study that was not peer-reviewed. In fact, nobody can reliably establish a quantifiable connection between global warming and increased disaster-related costs. In Holland, there's even a minor uproar over the report's claim that 55% of the country is below sea level. It's 26%.

Meanwhile, one of the scientists at the center of the climategate fiasco has called into question other issues that the climate lobby has claimed are indisputable. Phil Jones, who stepped down as head of the University of East Anglia's Climatic Research Unit amid the climate email scandal, told the BBC that the world may well have been warmer during medieval times than it is now.

This raises doubts about how much our current warming is man-made as opposed to merely another of the natural climate shifts that have taken place over the centuries. Mr. Jones also told the BBC there has been no "statistically significant" warming over the past 15 years, though he considers this to be temporary.
***

All of this matters because the IPCC has been advertised as the last and definitive word on climate science. Its reports are the basis on which Al Gore, President Obama and others have claimed that climate ruin is inevitable unless the world reorganizes its economies with huge new taxes on carbon. Now we are discovering the U.N. reports are sloppy political documents intended to drive the climate lobby's regulatory agenda.

The lesson of climategate and now the IPCC's shoddy sourcing is that the claims of the global warming lobby need far more rigorous scrutiny.

Making ‘locally grown’ work - Marshall Independent

Making ‘locally grown’ work - Marshall Independent
There’s room for growth for Minnesota’s small farms, U.S. Secretary of Agriculture Tom Vilsack said Monday. But it will also take development to connect food producers with local consumers.

By Deb Gau
Article Photos
Photo by Deb Gau
U.S. Rep. Collin Peterson and U.S. Secretary of Agriculture Tom Vilsack address members of the media at Southwest Minnesota State University Monday.

MARSHALL - They may need some initial help to develop a connection with consumers, but small farms can make a difference in the rural economy, U.S. Secretary of Agriculture Tom Vilsack said Monday.

"The reality is we need all kinds of farms in this country," Vilsack said, from small organic farms to large commercial farms.

The main challenge will be helping small farmers open connections for local customers, Vilsack and U.S. Rep. Collin Peterson said. Vilsack and Peterson arrived in Marshall Monday for the Home Grown Economy conference held at Southwest Minnesota State University.

Vilsack said the USDA wants to help expand domestic agriculture markets and markets for locally grown food.

"Here in Minnesota, this is not a new idea," Vilsack said. The state is among the top 10 in the nation for organic farming, he said.

"You know this is a market that will develop into something when big chain stores start to have a local food section," Peterson said. "Demand is there. These big guys are starting to understand it."

"There's no precise definition of local" when it comes to locally grown food, Vilsack said - depending on the area, "local" can mean food produced 100 to 200 miles or less from its consumers. But the benefits of local agriculture are the same. Expanding the market for local agriculture stimulates rural economies and creates jobs, Vilsack said.

"When you purchase local, those dollars are kept in the community," Vilsack said.

Vilsack and Peterson said although there tend to be higher costs involved in small farming, there also tend to be higher profits, and small farms are easier to get started. The drawback, they said, is that in order to establish a local market, small farmers often have to compete with established supply lines.

Vilsack said one way the USDA can help small farmers could be to encourage the development of cold-storage facilities or slaughterhouses to support a local market. Other opportunities could include conserving and promoting local natural resources, and support for alternative energy development.

Vilsack also said USDA nutrition programs could make it easier to supply schools with locally grown foods for lunch programs. That would help give the farmers a steady customer, promote a healthy diet in the schools and provide opportunities for ag education.

"The government is not going to create this," Vilsack said. "What we're going to do is be a help to people who want to do this."

One of the USDA's first steps toward encouraging locally-grown food is the "Know Your Farmer, Know Your Food" initiative, Vilsack said. The program's goal is to start a dialogue with Americans on locally grown foods, and to gather information on how best to encourage local agriculture.

"It shouldn't be a challenge," Vilsack said of producing more locally-grown food in Minnesota. It's easy to have confidence in a supplier when it's someone from the community. "If you know the farmer who supplies your beef, you're going to have more confidence than if you're being supplied with beef from 1,500 miles away."

Debate over GM eggplant consumes India - Reuters

Debate over GM eggplant consumes India - Reuters

MUMBAI (Reuters) - The purple eggplant that Indian shopper Tanuja Krishnan picks out at a Mumbai market stall every week is an unlikely protagonist in a raging debate about whether genetically modified foods should be introduced into India.

Science | COP15

A genetically modified version of eggplant, a staple in fiery curries, was slated to be the first GM food introduced into India in a bid to stabilize food prices and mitigate some of the effects of climate change on Indian food crop yields.

Yet, Environment Minister Jairam Ramesh blocked the release of the vegetable until further notice following an outcry by environmentalists and some farmers. The opposition to GM foods was so heated that some protesters burned effigies.

Ramesh said there was not enough public trust to support the introduction of such crops into India's food supply until more research was done to remove all doubts that GM foods were safe for consumption.

But while those from the camp that opposed GM foods are celebrating, there are concerns that rising food prices will be a major problem for Indian policymakers in the future unless the country starts embracing genetically-modified food crops.

"This is bad for the country's agricultural and biotechnology future. Our scientists have lost their credibility, companies will be unwilling to invest more money, and it will take us a long time to pick up the pieces again," said C. Kameshwar Rao, an official at the Foundation for Biotechnology Awareness & Education, a GM advocacy institute.

"Scientists can't win a shouting match with politicians."

India's farm sector has changed very little since the advent of the Green Revolution with crop yields failing to keep up with soaring population growth and rising incomes.

At the same time, damage to crops from pests and disease have worsened due to rising temperatures from climate change.

HYBRIDS

Known as Bt brinjal, the Indian word for aubergine, the GM vegetable is able to resist some pests responsible for devastating crops across India thanks to a gene from soil bacteria called 'bacillus thuringniensis' (Bt).

The thought of eating a genetic hybrid has made consumers such as Krishnan wary. "I would try it to see if it tastes any different, if it has fewer pests, but I think I would prefer organic brinjal just to be safe," she said.

The moratorium against the release of the GM eggplant followed harsh criticism by environmentalists and farmers who demanded rigorous testing and labeling standards before Bt brinjal was cultivated.

"Stringent monitoring measures should be immediately put in place to ensure that no releases of GM crops happens," said Rajesh Krishnan, a manager for sustainable agriculture at Greenpeace India.

India's Genetic Engineering Approval Committee (GEAC) opened the way for the commercial cultivation of Bt brinjal last October, seven years after approving Bt cotton, which is now grown on more than 80 percent of total cotton area.

Thanks to genetically modified cotton, India has become the world's second largest cotton producer and exporter after China, with about 5 million farmers growing Bt cotton.

"Our experience with Bt cotton has showed the technology has benefited the farmer, the consumer and the states' economies," said Bhagirath Choudhary, head of the International Service for the Acquisition of Agri-biotech Applications (ISAAA) in Delhi.

"We have a solid case in Bt cotton, with higher yields, double the output and less use of insecticide. But the technology is so sophisticated, the general public is ignorant about it." India is among the top biotech crop growing countries, trailing only Argentina, Brazil and the United States.

NO OTHER OPTION

India is the world's second largest producer of eggplant after China and the vegetable is also used in traditional medicine to treat diabetes and hypertension.

About 1.4 million farmers grow eggplant, which is very susceptible to pest attacks. Farmers tend to spray the crop with pesticides 30-50 times during a crop cycle.

"The brinjal we eat now is more harmful because of the pesticide residue," said Raju Shetty, a farmer leader in western Maharashtra state and a member of parliament.

He supported Bt brinjal because he said "it will cut the cost of pesticide and boost yields. That's what farmers are seeking."

Even though the GM seeds for the vegetable would likely cost three times the price and farmers would need to purchase seeds for every sowing rather than reusing crop seeds, proponents say the extra expenses would be compensated by lower pesticide costs and less devastating crop loses.

Expanding India's food supply is crucial in a country of one billion people, with predictions the population might reach 1.4 billion by 2025.

The United Nations' Food and Agricultural Organization has said food production will need to double by mid-century to meet demand from a growing world population, prompting calls for a second Green Revolution.

But Greenpeace maintains GM crops are a costly distraction from tackling hunger through fighting poverty and helping small holders in developing countries sell their products.

A combination of changing diets, a growing population, demand for farmland for industrialization and high energy prices have stoked food prices globally, including in India, where the food price index rose 17.56 percent in the 12 months to January 23.

India is also battling with lower crop yields and more pests and plant disease because of higher temperatures, raising concerns that India's farm output could lag demand and the world's second most populous country will become a large food importer unless crop yields jump.

Some economists and scientists in India favor a raft of policy initiatives, including genetic engineering, to improve yields and increase resistance to pests, disease and drought.

"You have a large population that's growing in affluence, but our resources -- land, water, cheap labor -- are all shrinking, so we have to increase output quickly and efficiently," said Gyanendra Shukla, director of Monsanto India Ltd.

"I don't see any other option but GM crops."

Since Monsanto launched the world's first GM crop in 1996, more than 25 countries have taken to biotech crops including soybean, corn, tomato, squash, papaya and sugarbeet.

Bt brinjal was developed by Maharashtra Hybrid Seeds Co (Mahyco) under license from Monsanto, and estimates show economic benefits from higher yields could top $400 million a year.

GEAC has also approved studies of GM okra, tomato and rice, but opponents say GM should be a last resort.

"You can't simply abandon all other solutions, including organic farming, to focus just on biotechnology when the testing, labeling and enforcement standards are so inadequate," said Kushal Yadav, an official at the Center for Science and Environment.

NO PANACEA

Aside from health and safety concerns, critics worry that the widespread use of GM crops will put India's food supply largely in the hands of a few giant corporations that make the seeds.

There is also the possibility of genetic contamination if the Bt genes cross pollinate with other varieties.

A recent report by U.S. health and environment protection groups said that rather than reduce the use of pesticides, genetically engineered crops had actually prompted increased use of these chemicals, caused an epidemic of herbicide-resistant weeds and resulted in more chemical residues in foods.

A backlash against the technology also appears to be growing globally, with consumer resistance to what British tabloids have dubbed "Frankenfood" taking root.

Even advocates in India admit genetically modified crops are no magic bullet.

"Bt can't be the panacea for all the problems in Indian agriculture. But if we miss this, we miss the chance to usher in a new technology, see how it can help us," Choudhary said.

(Additional reporting by Rajendra Jadhav and Sujoy Dhar; Editing by Megan Goldin)

Schools face big budget holes as stimulus runs out - AP

Schools face big budget holes as stimulus runs out - AP

By TERENCE CHEA (AP) – 1 day ago

SAN FRANCISCO — The nation's public schools are falling under severe financial stress as states slash education spending and drain federal stimulus money that staved off deep classroom cuts and widespread job losses.

School districts have already suffered big budget cuts since the recession began two years ago, but experts say the cash crunch will get a lot worse as states run out of stimulus dollars.

The result in many hard-hit districts: more teacher layoffs, larger class sizes, smaller paychecks, fewer electives and extracurricular activities, and decimated summer school programs.

The situation is particularly ugly in California, where school districts are preparing for mass layoffs and swelling class sizes as the state grapples with another massive budget shortfall.

The crisis concerns parents like Michelle Parker in San Francisco, where the school district is preparing to lay off hundreds of school employees and raise class sizes because it faces a $113 million budget deficit over next two years.

"I'm worried they're not going to have the quality education that's going to make them competitive in a global society," said Parker, who has three kids in district elementary schools.

Around the country, state governments are cutting money for schools as they grapple with huge budget gaps triggered by high unemployment, sluggish retail sales and falling real estate prices. A recent report by the Center on Budget and Policy Priorities found that 41 states face midyear budget shortfalls totaling $35 billion.

"The states are facing a dismal financial picture," said Jack Jennings, president of the Center on Education Policy.

The Obama administration's $787 billion federal stimulus package provided roughly $100 billion for education, including $54 billion to stabilize state budgets. In October the White House said the stimulus created or saved 250,000 education jobs.

But many states have used most of their stimulus money, leaving little to cushion budget cuts in the coming fiscal year.

Experts say the looming cuts could weaken the nation's public schools, worsen unemployment, undermine President Obama's education goals and widen the achievement gap between students in rich and poor districts.

Wealthier communities are filling school budget gaps with local tax increases and aggressive fundraising, but could worsen inequality and undermine the larger system for paying for public schools, said John Rogers, who heads the UCLA Institute for Democracy, Education and Access.

In Michigan, which has the nation's highest unemployment rate, school districts lost 2 percent of their state money this year and could lose another 4 percent next year because of a projected government shortfall of $1.6 billion. Most of more than $1 billion in federal stimulus money is gone.

Democratic Gov. Jennifer Granholm has proposed an incentive program to entice about 39,000 public school employees to retire, but that plan has been criticized by the state's largest teachers union.

"Our districts don't know what the next step is," said Don Wotruba, deputy director with the Michigan Association of School Boards.

In Washington state, school districts that lost $1.7 billion in state money over the past two years are bracing for another round of cuts as lawmakers try to plug a $2.8 billion state deficit.

Seattle Public Schools, the state's largest district, plans to lay off nonunion staff, freeze hiring, create more efficient bus routes and increase class sizes further to close an expected budget shortfall of $24 million.

In Florida, public schools are being squeezed by state budget cuts and an unexpected increase in student enrollment, including an influx of Haitian students in the aftermath of Haiti's devastating earthquake.

Districts have been coping by closing schools during breaks, cutting energy costs and changing transportation routes, but the next round of cuts is expected to hit classrooms.

"We're at a point now where you just can't stretch that rubber band any further," said Bill Montford, CEO of the Florida Association of District School Superintendents.

In California, school districts have already laid off thousands of teachers, increased class sizes and slashed academic programs.

But state officials are warning the worst is yet to come because the state has already handed out most of its $6 billion in stimulus money.

Per-pupil spending for K-12 schools fell 4 percent last year and would be slashed another 8 percent under Gov. Arnold Schwarzenegger's proposed budget for 2010-2011, according to the state Legislative Analyst's Office.

"It's cataclysmic. It hasn't been seen since the Great Depression," said Bruce Fuller, an education professor at the University of California, Berkeley. "Now you're talking about sizable layoffs and further increases in class sizes."

More districts are expected to look like Vallejo City Unified School District, which has laid off most of its middle school guidance counselors and no longer offers music or art in elementary school. Last year it laid off 60 of its 860 teachers and raised K-3 class sizes from 20 to 28 students, and officials are considering more layoffs and even bigger class sizes this year, said Christal Watts, who heads the teachers union.

Lori Peck, a first-grade teacher at Vallejo's Patterson Elementary School, said the larger class size means she can no longer give her students the individual attention they need.

"I feel like my class in general is further behind where they should be," Peck said. "My concern is they don't reach the standards by the end of the year."

In San Francisco, Superintendent Carlos Garcia said he's worried the cuts will reverse the district's progress in narrowing the achievement gap between black and Hispanic students and their white and Asian classmates.

"These cuts hurt some of our poorest and neediest kids," Garcia said. "The decisions that school boards and superintendents have to make pretty much go against the grain of everything we believe in."

Pawlenty plan: federal funds and deep cuts Pioneer Press

Pawlenty plan: federal funds and deep cuts Pioneer Press
His budget-balancing act relies on combo of cuts, predicted federal aid
By Jason Hoppin
jhoppin@pioneerpress.com
Updated: 02/15/2010 11:08:17 PM CST

Minnesota Governor Tim Pawlenty (Pioneer Press file photo)

Gov. Tim Pawlenty released plans Monday to close a $1.2 billion state budget deficit, relying on hoped-for federal funding and further cuts to health care and welfare programs, and by proposing dramatic, long-term reductions to city and county aid that could reshape the way Minnesota's local governments do business.

In doing so, Pawlenty showed that, despite having wielded his budget ax several times since the economy tanked, it's as sharp as ever.

"These are challenging times," he said. "We have a historic drop in revenues. We have one of the more highly taxed states in the country. Adding more tax burden onto the state is not the way forward, so we have to live within our means, tighten our belts, do what everybody else is doing in this economy."

Pawlenty proposed $825 million in cuts, including $250 million in aid to local governments. And to cover the rest of the deficit, he penciled in $387 million in additional federal health care spending, even though Congress has not passed the aid.

About 20,000 adults without children on MinnesotaCare would lose health care coverage under the plan, and everyone from home health care providers for the disabled to hospitals would see cuts.

Pawlenty also called on the Legislature to make his 2009 unallotment budget cuts permanent. Combined with Monday's recommendations, that would reduce the projected $5.4 billion deficit in 2012-13 by nearly $3 billion, he said.

The cuts to local government aid and other
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payments to cities and counties are bound to be controversial. Pawlenty proposes $250 million reductions in each of the next three years, dramatically shrinking a $2.1 billion program that sustains small towns and big cities alike by keeping local property taxes low.

St. Paul, for example, would take a $13 million cut under the budget. And if the city took similar cuts over the next two years, its budget would be reduced by 20 percent — absent any property tax hikes.

That's more than the city's parks and recreation, city attorney, human resources and city council budgets combined.

The news led to a warning from St. Paul Mayor Chris Coleman that the state's quality of life was at stake.

"It is now time for legislators from both parties to stand up and block the dangerous path to the bottom that the governor's budget proposal represents. Nothing short of Minnesota's future is at stake," Coleman said.

Advocates for the poor and disabled reacted to the proposal with frustration.

"My disappointment is that the last two years, we've been working very hard with the governor's own department to transform the system to make it much, much more effective. And he did not recognize that work," said Bruce Nelson, chief executive officer of ARRM, a disability rights advocacy group.

A state-run home for those suffering chemical or mental health issues, or for those with developmental disabilities or other ailments, would be closed. Which one has not been a determined, a spokeswoman for the Minnesota Department of Human Services said.

Counties also would be big losers. Ramsey County, for example, would see $19 million in state aid reduced to just under $300,000. Hennepin County's $34 million in aid would be eliminated.

Victoria Reinhardt, chairwoman of the Ramsey County Board of Commissioners, said the proposals would put more pressure on local property taxes. And cuts to human services, an area that accounts for half of the county budget, will affect property taxes as well.

"It's a double whammy," Reinhardt said.

To guard against huge property tax increases, Pawlenty said, the state should extend a current property tax cap.

Jim Miller, executive director of the League of Minnesota Cities, said the cut would mean big tax increases or dramatic cuts to services — or both.

State and national Democrats ridiculed the governor's reliance on $387 million of increased Medicaid payments to help balance the budget. Those payments first began under the stimulus package, and Pawlenty, who is exploring a run for president, has been a debt hawk and vocal critic of federal spending.

The Democratic National Committee called it "hypocrisy." Local Democrats were equally unsparing.

"Clearly there is a major gimmick in this proposal in that one-third of it depends on federal funds that have not been passed yet," Senate Majority Larry Pogemiller, DFL-Minneapolis, said.

Meanwhile, Republicans applauded Pawlenty for cutting the budget and sparing tax increases.

"Families all over the state are feeling the effects of the economy," said Senate Minority Leader David Senjem, R-Rochester. "As leaders in the Legislature, we must also act to slow the unsustainable growth by implementing budget cuts and reducing the overall cost of government."

Even with the federal aid, Pawlenty said, cuts would be deep. He predicted there would be layoffs.

"All of the private sector is experiencing layoffs, wage freezes, furloughs, terminations. So we're going to have some of that. We're going to strive to try to minimize it, obviously," Pawlenty said.

On average, state agencies would see budgets slashed 6 percent. A delayed $1.2 billion in state payments to schools would be further delayed.

Grants to help the working poor find child care would be cut. Payments to help fight HIV would be delayed. Some grants to help treat adults suffering from mental health issues would be cut, and treatment center hours reduced.

Though the Legislature does not usually deal with budget issues in even-numbered years, the supplemental budget was needed when state economists forecast a dramatic drop in revenues due to the recession. The DFL-controlled Legislature now takes up the proposals.

Pawlenty said he tried prioritizing the cuts, maintaining funds for public safety and K-12 education. While he has frequently expressed frustration with the cost of schools, he said he did not want those frustrations to affect children.

But House Majority Leader Tony Sertich, DFL-Chisolm, said that if Pawlenty thinks the budget doesn't affect public safety, then he is "flat-out lying."

Sertich said most local government spending goes toward police and fire departments, and that they are bound to suffer under cuts to local aid. Pawlenty has said cities should cut elsewhere rather than lay off police and firefighters.

Pawlenty also proposed a $9.5 million cut to the Department of Corrections and he's seeking an $14.7 million reduction in funding for courts across Minnesota.

In addition, he pushed his plan to slash corporate and capital gains taxes to help Minnesota's economy, including a 20 percent cut in the corporate tax rate and taxes for small businesses and a capital gains exclusion for qualified investments in small business.

"This is a spit in the ocean compared to what should be done," Pawlenty said, saying Minnesota's tax structure was out of step with the rest of the country.

The governor's proposal also eliminates the state's general assistance grants, which go to poor Minnesotans, often with no income, who get monthly payments up to $203.

Starting in December, a new program would provide grants to at-risk adults in crisis situations, while the smaller allowance would be retained for some, including those in battered women's shelters.

BALANCING ACT

Gov. Tim Pawlenty's plan to balance the budget includes $387 million in added federal Medicaid funding, plus these cuts: