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To: johnlw who wrote (168)7/24/2004 1:19:08 PM
From: Jon Koplik
   of 4346
Barrons piece on orange juice -- looks like Brazilian production may finally (next year ?) take a serious hit; and eventually allow orange juice futures to recover.

Commodities Corner

Monday, July 26, 2004

Orange Crush

Disease forces culling of Brazil's orange trees


WHEN THE ORANGE TREES STARTED yellowing on his family's small farm, Valentin Gavioli knew it was bad news. He had no idea, however, of the shock waves his discovery would send through Brazil, whose groves produce half the orange juice consumed worldwide.

Scientists soon discovered the Gavioli farm had Brazil's first case of citrus greening, a deadly bacterial disease that has wiped out millions of acres of orange groves in Thailand and parts of South Africa.

"We are going to have to rip up most of our trees. It's a disaster. There are a lot of farmers panicking right now," Gavioli says from the family's nine-hectare (22.24-acre) plantation in Taquaritinga, the heart of Sao Paulo state's world-leading orange belt.

One week after the news broke, scientists are still assessing the threat that greening poses to the orange industry and international orange-juice prices have yet to react. Brazilian industry officials, however, are bracing themselves for a long, costly -- and possibly futile -- battle against the disease.

"In the future, we will talk about the Brazilian oranges before greening and after greening," says Ademerval Garcia, president of the Brazilian Citrus Exporters Association, or Abecitrus. Citrus greening slowly strangles orange trees by hindering photosynthesis. The first symptom is a yellowing of the tree's green branches and leaves. Soon, the plant sheds leaves and fruit; the tree then yields a small, disfigured crop that's useless to the juice industry. The only option is costly: Rip up the tree and replant. And output will still plunge, as the trees need three years to mature.

Cases have been confirmed in 11 orange-producing communities in Sao Paulo. But the disease has an incubation period of about two years, so the industry must presume it has spread to all orange-producing regions of Brazil, says Abecitrus' Garcia.

Scientists are still divided over whether the disease found is the particularly virulent Asian strain, or a new American variant of unknown potency. They are also not sure about how it arrived. In any case, there is no cure for citrus greening. The only control method is eradicating infected plants, followed by a massive and sustained spraying campaign to try to prevent small insects from carrying the disease.

"The task in front of us is enormous. We will need serious government support," says Garcia. He warns the cash-strapped federal and state governments that the cost won't be small.

Oranges are big business in Brazil, employing around 400,000 people and generating $3.23 billion in revenues last year.

Citrus greening comes as Brazilian orange growers are already battling the spread of another disease, the ominously titled sudden-death virus, which has wiped out more than 2.5 million trees over the last three years.

The fight against the sudden-death virus has stretched many farmers to their financial limits. They are forced to invest in mass grafting programs as well as the installation of irrigation systems to ensure the continued survival of their plantations. The arrival of citrus greening could force many traditional farmers out of the orange business, says Valentin Gavioli.

"The level of technology, and therefore the capital, needed to produce oranges is becoming so high that only the major orange exporters will be able to afford it from now on," he says.

The local industry isn't even seeing a quick jump in orange and orange-juice prices to offset its potential losses. Frozen concentrated orange juice futures contracts at the New York Board of Trade are around 70 cents a pound, little changed from prices earlier this month.

Prices aren't rising now because the disease won't reduce the size of the current, record Sao Paulo orange crop, says Abecitrus' Garcia. Farmers are expected to harvest 345.5 million 40.8-kilogram (89.95-pound) boxes. In comparison, the top U.S. producer, Florida, is expected to grow a near-record orange crop of 242 million 90-lb. boxes, according to the U.S. Department of Agriculture. Investors are currently more worried about drooping worldwide demand due to the popularity of low-carbohydrate diets, Garcia adds.

World orange-juice prices may begin rising from next year, once losses start mounting, says Judith Ganes-Chase of New York-based J. Ganes Consulting. Ganes-Chase says the outbreak of the disease would at least stop the growth in orange-tree planting across Sao Paulo seen in recent years -- a trend which pressured international juice prices.

"This could be the necessary evil for the market to recover," she says. "It all depends on how serious the outbreak is.

ALASTAIR STEWART is a reporter for Dow Jones Commodity Newswire in Sao Paulo, Brazil.

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Copyright © 2004 Dow Jones & Company, Inc. All Rights Reserved.

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To: Jon Koplik who wrote (170)9/9/2004 12:24:16 AM
From: Jon Koplik
   of 4346
WSJ -- Florida's Agricultural Industry May Face $1 Billion in Damages.

September 8, 2004

Florida's Agricultural Industry May Face $1 Billion in Damages


Hurricane Frances may cost Florida's agriculture industry $800 million to $1 billion in lost craps after the storm cut through nearly half the state's farms, according to preliminary estimates.

Frances made landfall in the heart of the Indian River Citrus District on the Atlantic Coast where most of Florida's $205 million grapefruit crop is grown.

The state Department of Agriculture was still assessing the damage and didn't expect firm estimates until later this week. About 20,000 farms were in the path of Frances, said Liz Compton, a spokeswoman for the Florida Department of Agriculture. "Some weren't impacted greatly," she said.

Futures prices on the Chicago Mercantile Exchange were mixed Wednesday as traders continued to digest news about the damage caused by the hurricane. November lumber settled $9.40 lower to $383.10 for each 1,000 feet of board. Earlier, lumber hit a high of $395.60.

December cotton rose 3.7 cents to 53.12 cents a pound on the New York Mercantile Exchange on fears that Frances seriously damaged portions of cotton crops in the southeast. Traders are also worried about whether a new hurricane, Ivan, will head to the region in a few days. Earlier in the session, the contract hit an intraday high of $54.25.

Frozen concentrated orange juice for November gained 1.5 cents to 79.40 cents a pound at the New York Board of Trade. The contract closed at $79.25, up 2.9 cents, yesterday, the first trading day after Frances became the second hurricane in three weeks to hit Florida citrus crops.

Frances may have destroyed or damaged two-thirds of Florida's $205 million grapefruit crop. Preliminary estimates also say the storm may have caused $350 million to $400 million in damages to Florida's $1.5 billion nursery business and $200 million in losses to the state's timber industry, Ms. Compton said.

"We know that on the citrus side, that the fresh fruit industry is probably looking at some severe losses," Agriculture Commissioner Charles Bronson, who planned to tour ravaged areas, said Wednesday.

Florida produces three-quarters of the grapefruit in the U.S., the world's largest producer of the fruit. Half of Florida's grapefruit is turned into juice, while the rest is sold fresh with most shipped to markets abroad. "Some growers are reporting to us that they lost 50% to 100% of their fruit," said Casey Pace, a spokeswoman for Florida Citrus Mutual, the state's largest growers group.

On Wednesday, PepsiCo Inc.'s Tropicana Beverages North America unit said Frances' rampage inflicted only minor damage on the company's manufacturing and distribution plants. In a press release, Tropicana said in the wake of Frances it faces some "challenges" moving products in and out of Florida but expects to return to full capabilities in the next few days.

Write to the Online Journal's editors at

Copyright © 2004 Dow Jones & Company, Inc. All Rights Reserved.

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To: Jon Koplik who wrote (171)9/10/2004 12:01:31 AM
From: Jon Koplik
   of 4346
More WSJ hurricane / orange juice, etc. commentary :

Hurricane Ivan Pushes Up Coffee And Orange Juice


September 10, 2004

CEDAR FALLS, Iowa -- Concerns over Hurricane Ivan's trajectory lifted frozen concentrated orange-juice futures and gave mild support to coffee futures.

Orange juice's front-month September contract rose 3.7 cents to 82.85 cents a pound at the New York Board of Trade, while the most active November contract gained four cents to 83.4 cents.

Hurricane Ivan's winds neared 160 miles per hour yesterday, making it a Category Five, the largest rating, said Global Weather Services.

A midmorning advisory from the U.S. National Hurricane Center showed Ivan landing near Florida's Fort Myers and Punta Gorda area sometime Monday evening, the same area devastated by Hurricane Charley in mid-August.

"It's got pretty much a bulls-eye on Florida the way it is right now," said Jon Taylor, senior meteorologist with GWS. Areas along some parts of the Gulf Coast, as well as the southeastern Atlantic Coast, are still at risk from Ivan, GWS said.

Hurricane Charley hit Florida on Aug. 13 and damaged an estimated 20 million to 25 million 90-pound boxes of oranges for the developing 2004-05 crop. Hurricane Frances hit there last weekend, with preliminary estimates putting the damage about 10 million boxes. Florida's orange-crop estimate could fall below 200 million boxes because of hurricane-related losses.

Arabica coffee futures found some support from Ivan, too, analysts said. The September coffee contract advanced 2.65 cents to 70.2 cents a pound.

"This one being a Category Five, and the cone in the projected landfall is so large, that [had] everyone buying a little bit of insurance today," said James Cordier, president of Liberty Trading.

There is also some concern about the heavy rain that could be associated with the storm, said Judith Ganes-Chase, president of J Ganes Consulting. Warehouses in Miami and New Orleans could get flooding damage. "As slim as [hurricane damage] may be, there's always that once or twice in lifetime chance," she said.

The sugar market also watched Ivan as the storm is forecast to move through Cuba. "The problem with Cuba is that the country's total production is now only two million tons," said Ms. Ganes-Chase. The Florida and Louisiana sugarcane areas are "such a small part of total world cane production" that it isn't much of an issue, she added.

Ivan could impact Southeast U.S. cotton, but cotton futures fell ahead of today's Agriculture Department production report, which is expected to show a large crop. "But once the market trades on that number, then I think we'll see Ivan come into play," said Boyd Cruel, senior softs analyst at Alaron Trading.

Copyright © 2004 Dow Jones & Company, Inc. All Rights Reserved

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To: Jon Koplik who wrote (172)9/27/2004 4:04:34 AM
From: 10K a day
   of 4346
if you live in iowa you should just stop drinking coffee.

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To: Jon Koplik who wrote (172)10/12/2004 11:48:39 PM
From: Snowshoe
   of 4346
Record Corn, Soy, Cotton Crops to Sink Prices -USDA

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To: Snowshoe who wrote (174)10/29/2004 11:52:31 PM
From: Jon Koplik
   of 4346
NYT article on giant pumpkins.................................

October 26, 2004

Plenty of Pumpkin for the Carving

It took a forklift to put Alan Eaton's Atlantic giant pumpkin onto a scale this month, and it took four digits to register the outcome: 1,446 pounds, a world record. Outsized pumpkins are nothing new, of course. The record has been broken every year since 1996. And in a competitive hobby that bans hormone injections, the secret to turning out these monsters lies not in genetic engineering but in technique and pure Mendelian breeding.

Mr. Eaton, a grower in Richmond, Ontario, has some of the most prestigious seeds. They are known as 842 Eatons because they came from a pumpkin he grew in 2002 that weighed 842 pounds.

The parent seeds for the 842 came from two prize growers, one in Ohio and one in New York State. In 2002, Mr. Eaton pressed these two seeds into a pot of chocolate-colored soil. When they germinated, he transplanted them to his garden, where the translucent green sprouts stretched into vines dotted with blossoms and shaded by tents of leaves. Pumpkin stalks have male and female blossoms. The female blossoms have tiny pumpkins waiting to be fertilized at the base of their petals. Fertilization happens when the petals unfold and expose the flower's stigma to pollen carried by bees. But uncontrolled fertilization is not an option for a competitive pumpkin grower. Each night Mr. Eaton moved through his garden, squatting beside the female blossoms and studying their color. If they had turned a pale yellow, he knew they would open in the morning.

"I go around and put a coffee cup, one of the Styrofoam coffee cups, over each blossom that I want to protect," he said. "Then in the morning when I get there, all I have to do is pull the cup off and the blossom will open in 5 to 10 seconds." This July, Mr. Eaton brushed the sugarlike pollen grains from still another champion pumpkin, the 1301 Eaton, into the blossom of an 842. Then he folded the leaves together and replaced the female blossom's protective coffee cup. Through the season, he buried the vines under shovel loads of topsoil to keep their delicate ends from being singed by the sun. He ran tests to confirm the soil's pH; it couldn't become too acidic or basic. When nutrient levels were low, he added manure, compost and, in a pinch, fertilizer. The fertilizer must be added with great care. If the plant gets too much, said Mr. Eaton's wife, Sharon, the pumpkin can split.

Meanwhile, the chase continues. Growers strive for 100-pound intervals, so the next goal is 1,500 pounds; nobody knows the theoretical limit — whether a full ton is possible, for example. Dr. Robert Precheur, a horticulturist at Ohio State University, says the fact that the growing season for Atlantic giants ends in mid-September is likely to prevent any future champion from reaching a ton. But he added, "You never know." Dan Carlson, a grower in Clinton, Iowa, teamed with Marc Petersen to grow this year's second heaviest pumpkin, a 1,432-pound beast. There are "seeds I'll never part with," Mr. Carlson said. "One of them is an 842 Eaton."

They will plant it next year. Mr. Carlson doubts he will beat Mr. Eaton with his own seed, but the challenge is on.

Copyright 2004 The New York Times Company.

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To: Snowshoe who wrote (174)11/1/2004 11:26:03 PM
From: Jon Koplik
   of 4346
10/10/04 NYT piece on chocolate / cocoa / flavanols / Mars Inc. research, etc.

October 10, 2004

Eat Chocolate, Live Longer?


For the past decade or so, Harold Schmitz, a boyish and
bookish food scientist, has overseen research at Mars Inc.,
the global food company that makes everything from Snickers
bars and Dove chocolates to Uncle Ben's rice and Pedigree
dog food. One morning last spring, Schmitz met me in the
lobby of Mars's North American headquarters, a sprawling
industrial complex on a busy road just outside
Hackettstown, N.J. The Hackettstown plant is crucial to the
Mars business not just for its output -- half of the M&M's
sold in the U.S. are produced here -- but also for its
research labs. We reached these after Schmitz steered me
through security turnstiles at the entrance, a series of
carpeted office suites and a labyrinth of polished concrete
hallways dense with the dusty, sweet scent of cocoa. The
aroma grew deeper and more intense along the way, until it
seemed all at once to seep past my nose and my throat and
into my mind. Chocolate bars were all I could think about.
'It gets into your clothes too,' Schmitz said amiably as
we walked. 'We just get used to it.'

Schmitz has spent most of his time at Mars working on
something known in-house as the 'healthy chocolate'
initiative, an expensive, 15-year investigation into the
molecular composition and nutritional effects of cocoa, one
of chocolate's primary ingredients. In recent years, these
studies -- undertaken first by company technicians and
later by Mars-financed academics in the U.S., Europe and
Australia -- have prompted Mars to aggressively pursue
patents for dozens of new (and often strange) methods of
manufacturing and ingesting cocoa products. The claims,
submitted to the U.S. Patent and Trademark Office, that
cocoa can be used 'in the maintenance of vascular
health,' or as an 'anti-platelet therapy,' or 'in
tableting compositions and capsule-filling compositions,'
at first glance seem more pharmaceutical in nature than
food-related. Certainly they would seem to have little to
do with the day-to-day concerns of a company known mainly
for its candy. And yet Schmitz's mission is to 'reinvent'
cocoa and chocolate, as he put it -- to optimize both taste
and health benefits and then help Mars cash in.

Fortunately for Schmitz, time and money are no object at
Mars. As a private corporation -- without question among
the three or four largest in the country, with yearly sales
of about $17 billion -- Mars has no obligation to
shareholders and no need to justify its larks. Indeed, the
company's longstanding and intense culture of privacy has
made it corporate America's supreme enigma. As a matter of
policy, executives do not give interviews. The company's
cocoa research has provoked a measure of puzzlement from
its competitors, but Mars -- an eccentric, Wonkalike entity
if ever there was one, effectively controlled by the
semiretired Mars brothers, Forrest, 73, John, 68, and their
sister, Jacqueline, 65, whose combined worth was recently
estimated at $30 billion by Forbes magazine -- just goes
about its scientific work without pause or comment.

Recently, however, Mars has started to peel back the
wrapper. Company representatives gave me a couple of
explanations why. Mars executives apparently believe a less
murky image will help them attract talent, for one; for
another, those same executives believe that Mars needs to
respond to consumers' increasing demands to know more about
the companies they buy products from. Neither of these
exactly reveal what may be the real motivation, though,
which is that Mars is about to start selling something new
and vexingly complex, at least from a marketing standpoint.

Once Schmitz and I finally reached the Hackettstown
laboratories, he handed me a white coat and safety glasses
and took me inside. The lab had been cleared of Mars
employees for my visit -- old habits of secrecy die hard --
except for one person: John Hammerstone, a colleague of
Schmitz's who sat at a table in the large room, amid the
loud hum of machinery, surrounded by a pile of cocoa pods
and vials of cocoa. As we joined him, Hammerstone launched
into a brief tutorial on the future of chocolate as Mars
sees it, a kind of Cocoa 101.

Hammerstone picked up a yellow cocoa pod, a hard-shelled,
lemon-shaped fruit, placed it on the table and smashed it
open with a hammer. He then scooped out several large seeds
-- what are known as the beans -- from the pulp inside.
Next, he peeled the skin of one seed to reveal its deep
violet hue. In a raw state like this, cocoa beans are
exquisitely bitter and virtually inedible. Before they make
their way into a chocolate bar, they must follow a
convoluted route that begins in Africa, Asia or Latin
America with their harvest from cacao trees; the process
continues with their fermentation and sale, usually to
wholesalers like Archer Daniels Midland or Cargill, and
finishes with their roasting, transport, grinding and
transformation into chocolate liquor, which can in turn be
separated into powdered cocoa and cocoa butter. Producers
like Mars and Hershey's then buy these raw materials. What
we call chocolate is, essentially, the highly processed
combination of the cocoa butter, chocolate liquor and
sometimes powdered cocoa that are derived from the beans,
and which is then combined with sugar, emulsifiers and
(often) milk.

One byproduct of this process is that the candy bar you eat
today may include a combination of cocoas from three
different continents. Another is that the traditional
processing methods -- especially the fermentation, roasting
and what's known as 'dutching,' which is the addition of
alkali to mellow flavor -- strip the nutrients, and
especially the organic compounds known as flavanols, from
the beans. The majority of commercially available dark and
milk chocolates do not have significant levels of
flavanols. Nor do commercially available cocoas. 'Ten
years ago,' Hammerstone said, 'a Dove bar had almost

Yet the fact that Mars has been juicing up the flavanol
levels in its Dove bars over the past few years was not
exactly the point of Hammerstone's demonstration. Consider
instead the CocoaVia bar, which Mars introduced last year
and currently sells over the Internet. For Mars, CocoaVia
is a problem solver. Over the past few years, as concerns
over childhood obesity and carbohydrates have risen, the
growth in sales of candy and other snack foods has slowed
noticeably. Meanwhile, the market for functional foods, a
broad category that includes everything from
calcium-fortified orange juice to cholesterol-lowering
Benecol spread to drinkable supplements like Ensure, has
been increasing by up to 14 percent annually. Though Mars
might like us to think otherwise, chocolate could never
pass as a functional food, because of its high levels of
fat and its high number of calories. By and large, the
common perception of cocoa and chocolate's health
attributes have preceded any actual hard science; only now
is that science taking shape in large-scale, double-blind
experiments that lend credibility to the idea that
flavanols impart very real cardiovascular benefits. Yet
Mars is nonetheless placing a bet on flavanol-rich cocoa --
a main ingredient in CocoaVia, but one that is mostly free
of the rich cocoa butter in chocolate. 'This little bar
represents the culmination of a lot of research,' Schmitz
said, handing me a CocoaVia. 'But it's really only the
beginning. We're still learning, but nobody here questions
the idea that the opportunity is immense. It's a complete
business now. It's not just a research-and-development

As soon as the marketing department deems the consumer
market ready -- perhaps within the year -- Mars intends to
start selling a new line of products, most likely a
powdered cocoa or cocoa drink that, while not explicitly
promising to lower blood pressure, say, or increase blood
flow (a potential boon for those suffering from vascular
disease), will nonetheless be backed by a number of coming
studies that suggest a range of possible, and significant,
health benefits along these lines. And Schmitz seems to
hope that cocoa -- or more precisely, his cocoa, which
means cocoa processed according to Mars's special methods,
with extremely high flavanol levels -- will then turn out
to be among the most potent and popular functional foods
yet created.

Functional cocoa got its start at Mars around 1990, just
after witches'-broom, a fungal infection, destroyed the
Brazilian cocoa crop. At the time, Mars executives wondered
if unlocking the chemical makeup of cocoa beans might
somehow lead to the synthetic replication of the beans'
taste, which would offer some protection against future
agriculture catastrophes. By the early and mid-1990's,
Schmitz recalled, he and other Mars scientists were
doubting they could mimic chocolate's distinctive (and
highly complex) flavor chemistry.

Schmitz, however, was becoming excited by reports in the
science press on the health benefits of antioxidants in
green tea and red wine. The flavanol compounds he was
analyzing in cocoa beans had chemical similarities to the
compounds he was reading about in those studies. And so,
under his direction, Mars began several test-tube
experiments at the Hackettstown labs to see if cocoa had
any effect on the cardiovascular system -- in particular,
on the endothelial cell lining inside blood vessels. Early
on, Schmitz began to focus on whether cocoa flavanols could
stimulate the production of nitric oxide and 'relax' this
lining. The relaxation of the endothelial layer results in
better blood flow. That relaxation, in simplest terms, is
good for the cardiovascular system.

When Mars's research produced encouraging results, Schmitz
said he knew that if the company's next step -- human
testing -- turned up compelling data, Mars would need to
change the way chocolate has been made for at least the
past century to bring a flavanol-rich chocolate to the
market. By the late 1990's, various scientists at Mars were
doing just that, working with growers in Indonesia and
Brazil to see if they could preserve flavanol levels at the
cocoa beans' harvesting and processing stages; their goal
was to identify the right kind of cocoa bean (there are a
number of genetic varieties) and to settle on a gentler,
minimal-fermentation, lower-heat processing method that
Mars could make proprietary. The biggest obstacle was
flavor. Hammerstone, Schmitz and other Mars technicians
worked on making a flavanol-rich cocoa taste good -- a tall
order, since flavanols impart bitterness and astringency
'like a young wine,' Hammerstone said. Ultimately, the
company claims, well over a hundred Mars employees around
the world were recruited to produce a marketable,
consistent-tasting, flavanol-rich cocoa. 'The initial
results were very discouraging,' Schmitz said. 'The cocoa
we were creating was difficult even for the lab subjects to
choke down. There were times where we really did wonder
whether this was possible.'

Yet by around 2000, Mars had a product good enough to start
mixing into M&M's and Dove bars. (The company continues to
work on the cocoa's flavor and on boosting its flavanol
levels.) Mars stopped short of rolling out a purely
functional powdered cocoa or cocoa drink; in part, Schmitz
explained, the company still didn't have the taste
chemistry down well enough to build a product around it.
But Mars also wasn't sure how strong the case for the
effects of cocoa yet were. And you can't really sell a
functional food without the function.

In its recent history, the Mars company has financed some
dubious and embarrassing science -- most notably in the
early 1990's, when it supported research that resulted in a
claim that chocolate was actually good for your teeth. It
has also sponsored reams of legitimate research. Helping to
create scientific studies (and related spin, frequently)
that boost its products' appeal has been a hallmark of
Mars's public-relations strategy for the past decade. This,
too, is the case for its high-flavanol marketing campaign,
which may have required as much forethought and expense as
the creation of the high-flavanol cocoa itself. From the
start, Schmitz's objective was to pursue broad scientific
credibility for the project. In the mid-1990's, the
company, at Schmitz's behest, undertook a strategy of
distributing cash and high-flavanol cocoa to academics.
Mars's largess was directed almost exclusively to
respected, independent researchers who publish their
results in peer-reviewed journals.

This investment first bore fruit in the late 1990's, when a
study by Carl Keen, chairman of the nutrition department at
the University of California, Davis, reported that the
flavanols in cocoa appeared to have a healthful,
aspirinlike effect on platelets. While Mars had spent at
least $800,000 financing Keen's studies, Keen told me he
had no qualms, then or now, about using private-industry
money, despite the potential for perceived bias; if other
food companies spent as much as Mars on studies, he said,
the science of nutrition might be much further along. In
Keen's opinion, moreover, the early data from the
Mars-sponsored cocoa experiments are so persuasive that
they may lead to a reconsideration of links between disease
and diet. 'Some of the drugs we have today are so powerful
that it's unrealistic to think of food as having the same
effect of reducing blood pressure as, say, ACE
inhibitors,' Keen said, referring to the commonly
prescribed class of drugs to combat hypertension. 'But I
would argue that there will be a number of foods in the
future that will help in maintaining health, or can be used
with drugs, and will have a preventative use.' Mars's
cocoa, he added, which is far richer than many green teas
and red wines in flavonoids (the class of naturally
occurring compounds that include flavanols), is at the top
of his list.

Ratcheting up Keen's expectations are the latest studies
from Norman Hollenberg, a professor at Harvard Medical
School and a former editor of The New England Journal of
Medicine. In 2003, Hollenberg and an assistant professor,
Naomi Fisher, published a paper in The Journal of
Hypertension offering exactly the kind of evidence Schmitz
dreamed about: cocoa flavanols appear to stimulate the
production of nitric oxide in blood vessels, which in their
subjects had the effect of relaxing the endothelial lining
and increasing blood flow to the extremities. Hollenberg
and Fisher both believe this has positive implications for
diabetics who suffer from a range of afflictions tied to
poor circulation. This month, a paper that Hollenberg wrote
with Schmitz for The British Journal of Cardiology
assembles the most recent data to bolster the case that
cocoa flavanols may have therapeutic potential for those
afflicted with various cardiovascular diseases.

When I visited Hollenberg in June, in his cozy book-lined
office tucked away on the ground floor of Brigham and
Women's Hospital in Boston, he said he was even more
encouraged by a pilot study he concluded a few weeks
earlier. The project measured whether subjects who drank a
cup of high-flavanol cocoa had an increased flow of blood
to the brain; on average, participants registered a 33
percent increase in blood flow. Hollenberg called the
results 'a grand-slam home run.' And he sees potential
applications for the vascular (non-Alzheimer's) dementia
that afflicts millions of Americans and is believed to be
caused by poor cerebral blood flow. No drug on the market,
Hollenberg added, appears to do what high-flavanol cocoa
has done in his initial studies.

Hollenberg, like Keen, is not shy about his corporate
sponsorship; he conceded that his work would not have been
possible without Mars. In the early 1990's, the Harvard
professor was researching whether certain genes might offer
protection from the onset of age-related hypertension. In a
few select cultures around the world -- in parts of New
Guinea, for instance, and in the highlands of China -- men
and women consistently show no increase in blood pressure
as they age. Some years ago, Hollenberg also happened to
come across an article written in the 1940's by an Army
surgeon in the Panama Canal Zone, noting that the Kuna
Indians, in the San Blas Islands of Panama, had extremely
low blood pressure, and that it did not climb as they got
older. 'The Kuna had a few things going for them,'
Hollenberg said. 'They were close, and American Airlines
flies direct from Boston to Panama City. I didn't have a
lot of money, but I had a lot of frequent-flier miles.'
The problem was that Hollenberg's initial visits turned out
to be disappointing. He recorded low blood pressure
readings for the Kuna, but he found little evidence of a
protective gene. When islanders moved to the mainland, for
instance, their blood pressure increased, which genetic
protection ought to prevent. And yet, one thing struck him:
the Kuna living on the islands drank a significant amount
of locally grown, minimally processed, high-flavanol cocoa.
Those living on the mainland did not.

Hollenberg soon stopped looking for protective genes and
started focusing on cocoa. In the mid-1990's, with his
support running low, a search for grant money led him to
the American Cocoa Research Institute, a trade organization
of confectioners; a few days later, Harold Schmitz called.
'Before I knew it,' Hollenberg said, 'I was flying to
Panama with Mars's lawyer to meet with the Panamanian
Ministry of Health so they could sign permission papers for
the study.' Mars has since covered the bulk of
Hollenberg's projects in Panama and Boston, costs easily
amounting to more than a million dollars. Yet this may
prove a pittance in the long run. For one thing,
Hollenberg, who sits on the advisory boards of several drug
companies, has advised the company as it considers sharing
its cocoa research with a large pharmaceutical company.
(Mars told me it is currently in talks.) And Hollenberg has
been forceful in pushing the idea of selling cocoa as a
functional food. Early on, he said, he told Mars's top
executives: 'You know, I don't think the issue is whether
there is going to be a flavanol-rich cocoa made for human
consumption. The issue is, who is going to profit from your

In Hollenberg's view, there's a fortune at stake. 'It's
going to be a billion-dollar market, you can bet on it,'
he said. 'It's going to be on every mother's shelf. And a
year from now, when the news starts trickling out, every
old person is going to buy it.' He added: 'I think it's a
long-term strategy. If one could persuade school districts,
which are terribly concerned about junk food, to put
vending machines in to provide flavanol-rich hot chocolate
and cold chocolate -- well, do you happen to know who owns
most every vending machine around the world?' I did happen
to know. While Hollenberg overstated things somewhat, Mars
is a huge player in the vending business. Not only is it
among the leading providers of electronic components in
vending machines, but it is also the top company in
vending-machine candy sales. (Mars is second only to
Frito-Lay in overall snack-food sales at those machines.)

'It could happen,' Hollenberg continued, seemingly
entertained by the fine carpentry -- tongue into groove,
tenon into mortise -- of such a business strategy. 'And to
think that Mars began all this without a product in mind.
Who knew?'

But selling a mass audience a high-flavanol cocoa, for
example, is by no means simple. The marketplace is littered
with functional-food failures from big, smart companies
like Nestle and Campbell's, which thought they could design
a best-selling yogurt or a frozen dinner with
health-conferring properties. This largely explains Mars's
caution. When I visited the Hackettstown headquarters a
second time, this past summer, I sat down with Schmitz and
Jim Cass, the marketing vice president at Mars charged with
creating a campaign for the coming line of high-flavanol
products. Cass told me that with CocoaVia, the company has
decided for now to restrict the bars directly to consumers
on the Web. This way Mars can create a database of buyers
and even contact them individually, to understand how
they're reacting to the product and how large the potential
base might be for similar foods. Cass explained: 'It's
something that we've talked about -- how far can these
healthful benefits go? To the kids' market? Maybe. And we'd
like to maybe understand that. Is this just a market for
boomers, or those who lead an active life, or the wellness
seekers? That's why we're taking this calculated learning
approach before we do anything on a national or much larger

There are other hurdles that have nothing to do with
marketing, however. Hollenberg's cocoa-flavanol findings --
though effectively duplicated this summer by Mary B.
Engler, a non-Mars-financed professor at the University of
California, San Francisco -- could lose some of their
promise as they are tried in larger and more involved
trials. Then there's the uncomfortable fact that Mars is,
first and foremost, a candy maker. As Carl Keen, at U.C.
Davis, put it: 'If Mars were some sort of juice company,
they would find this far easier to market, but they're in a
difficult position because they're a confectionary company.
The marketing here is much, much more difficult than if
they were selling a fruit or a vegetable.' Schmitz, too,
has no illusions about what's ahead. 'Nutrition is already
controversial,' he said, 'and you can imagine that
chocolate nutrition is about 1,000 times more

It's not reassuring that Mars seems unwilling to draw a
clear line between making subtle health claims for
chocolate and making forthright health claims for cocoa. Or
perhaps it's more accurate to say that Mars draws a clear
line, then seems to step over its edges, much like an
artful politician. In both of my visits to Hackettstown,
for instance, Mars executives made it clear that they think
it's irresponsible to claim that their research suggests in
any way that eating more of their chocolate is good for
you. That's why the company does not draw attention to the
fact that M&M's, say, now have more flavanols than
competing brands. The notion of pushing a 'healthy'
candy, especially to kids, is perhaps one of the last
remaining taboos left in the marketing world. At the same
time, Mars executives weren't hesitant to claim that their
research has created an upside: it can 'reduce the guilt'
from the daily chocolate habit, especially if the daily
habit includes a Dove dark bar, which caters to adult
palates and contains about 150 milligrams of flavanols.
It's hard not to imagine that a sister brand, like M&M's,
would benefit from that same upside.

To consumer food advocates like Marion Nestle, a professor
of nutrition at New York University, this borders on the
absurd. Nestle (who is not related to the food company)
says she thinks guilt is part of chocolate's inherent
appeal; she also takes the position -- extreme, by her own
admission -- that no food should be packaged with health
claims, not even wine, walnuts or blueberries. 'Everything
isn't a health food,' Nestle said. 'Or put it another
way: unprocessed foods are health foods. Once you start in
on processed foods, you're talking about marketing. This is
marketing, pure and simple.' Her position is echoed by
consumer groups like the Center for Science in the Public
Interest, which has criticized Mars in the past for making
health claims for chocolate, and which has tried (generally
without success) to call attention to questionable health
claims, often carefully and legalistically worded, for new
functional foods. 'What has happened is that we've gone
from having virtually no health claims on labels to a
free-for-all where companies can say almost anything they
want with almost no evidence,' said Bonnie Liebman,
nutrition director of the center. 'It has gotten so that
consumers can't identify the foods that truly may be
beneficial. The overall trend is good news for the industry
and not such good news for the consumer.'

The Center for Science in the Public Interest has not taken
a position on Mars's high-flavanol cocoa, or on CocoaVia,
which is currently packaged with the suggestion, 'Be good
to your heart everyday.' And at Mars, Cass and Schmitz
remarked that they don't think too highly of what's in the
functional-foods marketplace at the moment, either. Both
men said they consider the science on their cocoa so
promising for consumers, and the product so natural and
unadulterated, that they're loath to compare it to anything
currently available, perhaps with the exception of red
wine, which exploded in popularity in the early 1990's
after several studies revealed potential health benefits.
Nevertheless, the novelty of what Mars is doing, and the
fact that it is a food producer and not a drug maker, makes
it hard to know where to come down on the company. If the
flavanol research holds up, do you applaud a mammoth
multinational corporation that probably spent tens of
millions in an effort to 'capitalize' (as Jim Cass put
it) on a product that may help confront a leading cause of
mortality in America? Or do you instead doubt its
intentions -- and likewise its products -- because Mars
cares only about fattening its bottom line?

Hollenberg, for one, is unfazed by how deeply the business
and the science are intertwined. In his Boston office, he
told me that years earlier, he worked on the team that
began to explore the effects of ACE inhibitors -- a
once-in-a-lifetime experience, he had always thought, until
he started getting his flavanol results a few years ago.
'This is big news,' he said, 'from the point of view of
the future of cardiovascular medicine -- we think. But
there is going to have to be the investment of millions of
dollars to convert 'we think' to 'we know.' ' Hollenberg
said that those millions ultimately won't come from Mars,
since the company's interest in expensive cocoa studies
would certainly diminish once it created its line of
products and had assembled a portfolio of strong scientific
studies. That would only make sense, Hollenberg admitted
with a shrug. Also, he speculated, the day Mars moves on
may not be so far off.

Hollenberg then took me into the lab next to his office and
asked an assistant to make me a cup of experimental
high-flavanol cocoa -- the kind that Mars is still
tinkering with as a commercial product, he said. I had just
seen the charts on Hollenberg's subjects who had responded
to the drink (which contains about 500 milligrams of
flavanols) with a massive increase in blood flow to their
brain, some by as much as 40 percent. I took a taste. As
far as I could tell, there was little physical reaction; I
felt more alert after a few sips, a symptom perhaps
attributable to the caffeine (a fraction of what's in a cup
of coffee) or, more likely, to the liveliness of its
flavor. The taste is more akin to a dark, fruity, slightly
bitter chocolate.

'Now, that's not so bad, is it?' Hollenberg asked.

it wasn't, I had to admit. Not bad at all. Then again, we
were only talking about the taste. The harder question was
how good it is.

Jon Gertner is a contributing writer for the magazine. He
most recently wrote about Whole Foods Market.

Copyright 2004 The New York Times Company.

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To: Snowshoe who wrote (174)11/22/2004 12:34:41 AM
From: Jon Koplik
   of 4346
NYT -- Plant geneticists have developed a mild habanero chili pepper, and some enthusiasts are outraged.

November 21, 2004

Some Like It Hot, but a New Pepper Is Bred for the Rest


WESLACO, Tex., Nov. 18 - It's a burning issue for some
hot-pepper lovers: Whatever possessed Kevin M. Crosby to
create the mild habanero?

For Dr. Crosby, a plant geneticist at the Texas A&M
Agricultural Experiment Station here near the Mexican
border, the answer is simple: "I'm not going to take away
the regular habanero. You can still grow and eat that, if
you want to kill yourself."

But for those who prize the fieriest domesticated Capsicum
for its taste and health-boosting qualities, Dr. Crosby and
the research station in the Rio Grande Valley have
developed and patented the TAM Mild Habanero, with less
than half the bite of the familiar jalapeño (which A&M
scientists also previously produced in a milder version).

With worldwide pepper consumption on the rise, according to
industry experts, the new variety - a heart-shaped nugget
bred in benign golden yellow to distinguish it from the
alarming orange original, the common Yucatan habanero - is
beginning to reach store shelves, to the delight of
processors and the research station, which stands to earn
unspecified royalties if the new pepper catches on.

"I love it," said Josh Ruiz, a local farmer whose pickers
this week filled some 200 boxes of the peppers to be sold
to grocers for about $35 a box. "It yields good and I'm
able to eat it." As for the Yucatan habanero, he said, "My
stomach just can't take it."

By comparison, if a regular jalapeño scores between 5,000
and 10,000 units on the Scoville scale of pepper hotness
based on the amount of the chemical capsaicin
(cap-SAY-sin), and a regular habanero averages around
300,000 to 400,000 units, A&M's mild version registers a
tepid 2,300, or barely one-hundredth of its coolest
formidable namesake. A bell pepper, by the way, scores

Not everyone hails the breakthrough. Dr. Crosby, 33, a
native Texan and a distant relative of the crooner Bing,
said "chili pepper fanatics" have called with rude
questions about what he was thinking and why he was wasting
his time. A Mexican voiced complete bewilderment. Why, he
asked Dr. Crosby, would you want a habanero that's not hot?

Dr. Crosby said he sympathized. He had, after all, seen
Mayans in the Yucatan eating their way through plates of
habaneros dipped in salt. "I've heard it said it's
addictive," he said.

But he said most people should not try this at home, not
even with the most potent antidote at the ready, ice cream.
(Milk is second best.)

The center's director, Jose M. Amador, said people in
Mexico had called wondering if A&M was out to "ruin" the
habanero, and asking, "What are you, crazy?" There was even
a move afoot in Mexico, he said, to trademark the Yucatan
habanero in the same way, say, that the French protect
Champagne and Cognac, but he shrugged off its prospects.

Actually, Dr. Amador said, he came from Havana, for which
the pepper is named, but had never eaten it there, Cuban
cuisine not being known for its spiciness. With the same
confusion, Dr. Crosby said, the habanero's scientific name
became Capsium Chinense, although the pepper undoubtedly
reached China via the tropical Americas.

Last week, Dr. Crosby was among 225 scientists, growers and
processors who gathered at the 17th International Pepper
Conference in Naples, Fla. Business was booming, a
conference announcement said: "In recent years, interest
and demand for peppers has increased dramatically
worldwide, and peppers are no longer considered a minor
crop in the global market."

Specialty peppers, including hot peppers, were a
particularly fast-growing part of the market, perhaps
increasing by 5 percent a year, said Gene McAvoy, the
conference organizer and a regional extension agent at the
University of Florida in Labelle.

Dr. Crosby, who delivered a paper on breeding peppers for
enhanced health through plant chemicals like carotenoids,
flavonoids and ascorbic acid, said capsaicin was being
studied as a stroke preventive. Other chemicals in peppers
were potent antioxidants and protected against macular

The process to produce a more palatable habanero, he said,
began with cross-breeding a regular hot variety with germ
plasm from a wild heatless pepper from Bolivia. "We took
pollen from the hot to pollinate the heatless to create a
hybrid," he said. The hybrid was then self-pollinated,
fertilized with its own pollen, to inbreed desired
qualities and then, Dr. Crosby said, "backcrossed to the
hot to recover more of its genes for flavor." That was
repeated for eight generations, or four years at two
growing seasons a year, to produce the TAM Mild Habanero.
He was breeding it in yellow but could also produce it in
white and red, he said.

"It's a pretty fruit," said Dr. Crosby, taking a bite and
chewing without flinching. "It's got the flavor but it
doesn't kill you."

Copyright 2004 The New York Times Company.

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To: Jon Koplik who wrote (177)12/30/2004 8:16:41 AM
From: johnlw
   of 4346
Cattle ranchers and beef industry officials were throwing cowboy hats in the air yesterday after the U.S. announced sweeping plans for opening the border to nearly all Canadian exports of beef and live cattle in March. "Isn't that wonderful," whooped Mac McLean, owner of two feedlots near Lethbridge. "That's a big, big step. That's wonderful that they're going to do that."

But after 19 months of living without their largest market, many on the Canadian side warn that the relationship between the U.S. and Canadian industries will never be the same again.


"This has been a real dose of reality for us," said Arno Doerksen of the Alberta Beef Producers Association.

"There's no question that this has been an interruption in business (that) has been an overreaction. The Canadian industry needs to understand that we need to diversify our marketing opportunities."

In a release, the U.S. Department of Agriculture said it will now recognize Canada as a minimal-risk region for bovine spongiform encephalopathy (BSE), the scientific name for mad cow disease.

It means Canadian producers will be able to start shipping live cattle under the age of 30 months, as well as certain other animals and meat products, beginning March 7. They will also be able to ship beef products from animals over 30 months old.

Older live animals and breeding cattle will continue to be blocked.

"We are committed to ensuring that our regulatory approach keeps pace with the body of scientific knowledge about BSE," said Agriculture Secretary Ann Veneman. "After conducting an extensive review, we are confident that imports of certain commodities from regions of minimal risk can occur with virtually no risk to human or animal health."

It was the word Canadian producers were hoping to hear. "It is a major breakthrough that some thought would take many years," said Ted Haney of the Canada Beef Export Federation.

The decision means about 95% of the trade in beef and cattle could resume in the new year, he said.

"Some in the U.S. worked for it; others worked hard to avoid this day."

Haney said cattle prices should begin to return almost immediately. "The livelihood of Canadian producers begins to improve today."

Haney also said the U.S. rule would encourage other former markets to follow suit.

Canada's beef industry has been struggling since May 20, 2003, when it was announced a single breeder cow in northern Alberta tested positive for BSE.


The U.S. and Canadian cattle industries are highly integrated. Before the trade ban, animals regularly crossed the border and Canada sold more than 70% of its live cattle to the U.S.

It's estimated the closure has cost the Canadian industry and rural communities about $5 billion. Federal and provincial governments have spent a total of $1.6 billion to help producers deal with the crisis.

In 2002, Canadians exported $1.8 billion of beef products to the States. The second-largest customer, Mexico, came in at $200 million.

Cattle ranchers and beef industry officials were throwing cowboy hats in the air yesterday after the U.S. announced sweeping plans for opening the border to nearly all Canadian exports of beef and live cattle in March. "Isn't that wonderful," whooped Mac McLean, owner of two feedlots near Lethbridge. "That's a big, big step. That's wonderful that they're going to do that."

But after 19 months of living without their largest market, many on the Canadian side warn that the relationship between the U.S. and Canadian industries will never be the same again.


"This has been a real dose of reality for us," said Arno Doerksen of the Alberta Beef Producers Association.

"There's no question that this has been an interruption in business (that) has been an overreaction. The Canadian industry needs to understand that we need to diversify our marketing opportunities."

In a release, the U.S. Department of Agriculture said it will now recognize Canada as a minimal-risk region for bovine spongiform encephalopathy (BSE), the scientific name for mad cow disease.

It means Canadian producers will be able to start shipping live cattle under the age of 30 months, as well as certain other animals and meat products, beginning March 7. They will also be able to ship beef products from animals over 30 months old.

Older live animals and breeding cattle will continue to be blocked.

"We are committed to ensuring that our regulatory approach keeps pace with the body of scientific knowledge about BSE," said Agriculture Secretary Ann Veneman. "After conducting an extensive review, we are confident that imports of certain commodities from regions of minimal risk can occur with virtually no risk to human or animal health."

It was the word Canadian producers were hoping to hear. "It is a major breakthrough that some thought would take many years," said Ted Haney of the Canada Beef Export Federation.

The decision means about 95% of the trade in beef and cattle could resume in the new year, he said.

"Some in the U.S. worked for it; others worked hard to avoid this day."

Haney said cattle prices should begin to return almost immediately. "The livelihood of Canadian producers begins to improve today."

Haney also said the U.S. rule would encourage other former markets to follow suit.

Canada's beef industry has been struggling since May 20, 2003, when it was announced a single breeder cow in northern Alberta tested positive for BSE.


The U.S. and Canadian cattle industries are highly integrated. Before the trade ban, animals regularly crossed the border and Canada sold more than 70% of its live cattle to the U.S.

It's estimated the closure has cost the Canadian industry and rural communities about $5 billion. Federal and provincial governments have spent a total of $1.6 billion to help producers deal with the crisis.

In 2002, Canadians exported $1.8 billion of beef products to the States. The second-largest customer, Mexico, came in at $200 million.

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From: Volsi Mimir2/13/2005 4:20:49 PM
   of 4346
Farm Policy For The Rest of Us
(from Environmental Working Group website)
Kenneth A. Cook
Speech to The American Bankers Association
Agricultural Bankers Annual Meeting
Minneapolis, Minnesota
November 16, 2004

"Most people not on the receiving end of farm program payments would question the broad public purpose being served by them. But Congress keeps passing farm bills, so the legislation must be designed to meet some objective."

--Bruce Babcock
"Creation of a WTO-Friendly Farm Safety Net"
Iowa Ag Review, Fall 2004

From time to time reporters who cover agriculture, or farmers and ranchers who've heard about us, ask if I'd describe the Environmental Working Group as a...well, you know, liberal outfit.

I tell them that's a good question. And I ask them back if it doesn't come down to where we stand on the role of government. Of course, they say that's exactly how you tell a liberal from a conservative.

So I run through a little checklist.

First, you know you're a liberal if you find yourself short of income by 30 percent, or 40 percent, or even more, year after year--actually, decade after decade--and to make things whole, you go to the Government.

Or if you find yourself needing disaster aid for crops four, five, six, even ten years out of ten, you go to the Government.

Is it disaster aid for livestock? Go to the Government.

Research on crops? Go to the Government.

Research on animals? Go to the Government.

Research on equipment? Go to the Government.

Research on pests? Go to the Government.

Eradicate those Boll Weevils? Go to the Government.

Fire ant problem? Go to the Government.

Karnal Bunt? Go to the Government

Export subsidies? Go to the Government.

Export marketing? Go to the Government.

Food for Peace? Go to the Government.

Folks the refrain here is "Go to the Government." Feel free to join right in.

Crop insurance too high? Apple prices too low? Go to the Government.

Wool and mohair subsidy? Go to the Government.

Milk too cheap? Go to the Government.

Cotton too expensive? Step 2 to Government.

Soil conservation? Factory farm pollution? Below-cost timber or logging roads? Irrigation subsidy? Go to the Government.

Farm lender of last resort? Go to the Government.

Guarantees on farm loans? Go to the Government.

Electricity and telephones? Go to the Government.

How about if you need your very own cadre of thousands of highly trained, well-paid economists who work solely on agriculture? Go to the Government.

Well, we don't have nearly enough time to go through the full diagnostic exercise here today.

Suffice it to say that, eventually, I reach the end of the checklist, and I'm obliged to conclude: Yes sir--or yes ma'am--when it comes to Government, I'd have to say we're liberals at EWG.

We're just not extreme liberals, like you find on the House Agriculture Committee and in most farm organizations.

But just because EWG is well to their right on the role of government in agriculture, that doesn't mean we can't find middle ground. And work together.

In July of 2002, a couple of months after the Farm Bill was signed into law, Kenneth Hood, then chairman of the National Cotton Council, devoted much of his fascinating 'chairman's report' to what he proclaimed to be the Cotton Council's top issue--the fight against payment limits on big cotton growers.

"At the core of our dilemma," Mr. Hood said, "is finding a way to make the public feel good about six and seven figure payments to farmers..."

I couldn't agree more. That was the core of the dilemma facing the agribusiness end of commodity crop agriculture back in 2002.

And I have detected no signs that the public has since begun to 'feel good' about those six and seven figure payments to farmers.

If anything, I believe the public feels a good deal worse about our top-heavy, unfair farm subsidy system than they did just two years ago.

And the problems with farm policy go much deeper than the issue of payment limits for the biggest commodity operations. Those deeper problems will be my main focus today.

First, I'll consider recent, major shifts in the politics of farm policy and the causes of those shifts. Those shifts will make the next farm subsidy bill debate one of the liveliest in history.

Second, I'll examine how the new and unsettled politics of farm subsidies fit against their remaining rationale, once we peel away the myths and the rhetoric that have been used to sell government subsidies to the taxpaying public for nearly three quarters of a century.

That remaining rationale arises from our export dependency for subsidized crops. The subsidies are the buffer--particularly for the biggest producers.

Finally, I'll describe what I believe will be the new policy framework that flows from these new politics. Policy, of course, always flows from politics.

Plenty of people have made a good living predicting that change will be on the margins in each farm bill cycle.

I'll predict major change in the direction of farm subsidies, beginning with this next subsidy bill, as a result of the new politics and the new policy framework.

And then we'll test the politics of that new framework together, right here, with three imaginary customers I've invited to meet with you. They're already waiting, back home in your office.

To return, briefly, to Mr. Hood: Two things struck me about his remarks. The first was just how out of touch he seemed to be, and many in the agriculture subsidy world seem to be, with the kinds of things that the American public might 'feel good about.'

He saw no problem with big cotton operations hauling in hundreds of thousands, even millions of dollars of taxpayers' money, year after year with no end in sight.

No, the problem as Mr. Hood saw it, was that for the first time, the public knew about those payments in embarrassing detail.

Worse yet, from the standpoint of the Cotton Council, the Rice Growers and the Farm Bureau, political leaders in both parties, including many senior farm policy makers, were moved to act by this very same information.

It was only behind the closed doors of the 2002 Farm Subsidy Bill conference committee that the big growers' problems disappear.

A working majority of Democrats and Republicans agreed, dishonorably in my view, to go against the positions of the House and Senate. They removed the payment limits and reduced conservation spending below a fair compromise between the two positions.

That enabled them to allocate more money to commodity programs.

It continued the flow of taxpayers' money, unimpeded, to the nation's largest producers--10 percent of whom collect over 70 percent of the subsidies.

Mr. Hood, like many in agriculture, blamed the close call on the payment limits, the intense debate over farm subsidies in general, on me, and my colleagues.

It was a proud moment for everyone at the Environmental Working Group who worked to produce and publicize the Farm Subsidy website. And cynical as I am about farm subsidy politics, we agree with many in the farm lobby. Our website did affect the debate.

The single biggest factor shaping the 2002 Farm Bill debate, far exceeding our plans and expectations, was the EWG subsidy website.

Which prompts me to ask: How many of you have surfed our farm subsidy data?

It's great to put some faces on all those IP addresses.

How many of you have found it of service in your business? How many of you believe a good service--like a well-stocked ATM machine--is worth a fee? How many of you have a checking account, a major credit card, and can take a hint?

You've got lots of company on our website.

In the first year it was in operation, the Farm Subsidy Database drew more than 60 million searches from millions of visitors. By the second year the searches far surpassed 100 million, and we lost interest in counting. The traffic has remained incredibly strong, particularly when we post updates.

For example, last spring, when we released the names of 436,000 prospective tobacco buyout recipients, and the estimated amount they would receive from taxpayers--including over 400 who stood to collect a million dollars or more--we experienced another shut-down of our T-1 line.

Eventually, that tobacco buyout analysis and the uproar it created in the media also shut down the outrageous proposal by House leaders that taxpayers would pick up the buyout tab--and shifted the burden to tobacco companies, where it belonged.

Please make a note of that precedent. It might come in handy later.

We've since dedicated a separate T-1 to the subsidy website.

And we'll need it on the morning of Tuesday, Nov. 30th.

That's when the latest update, of subsidy payments for 2003, goes online. That will make nine years' worth of payments, 1995 through 2003.

There are a lot of surprises in this update.

Here's a glimpse.

For the money taxpayers have spent on commodity and disaster subsidies between 1995 and 2003--not counting conservation payments--we could have bought 25 percent or more of the farms--land, barns, farmhouses and all--in 302 counties.

And that, mind you, is for just nine years' worth of subsidies. How many nine-year farm purchase notes have you issued lately?

We could have bought over 60 percent of the farms in 13 counties.

We could have bought half or more of the farms in 47.

The counties are scattered across Texas, Louisiana, Mississippi, Arkansas, North Dakota. Most--though not all--are what I call the 'red ink' states. They get more federal money than they pay in taxes. For most of them, farm subsidies are a major contributor to the red ink.

Why did the database have such an impact?

Any number of farm policy experts and commodity lobbyists dismissed it at the outset as adding nothing important, nothing new, to the farm policy debate. And I admire their message discipline. They said it over and over in literally thousands of articles about the EWG Farm Subsidy website.

I think the impact went beyond the unprecedented stream of news stories it generated. I think that despite its limitation, our website helped strip away myths and rhetoric.

It demolished the symbolism of farm subsidies as the salvation of family farms.

It repainted Grant Woods' American Gothic as a political cartoon.

You just can't hand a pitchfork to a collection of millionaires and Fortune 500 companies and State prisons and universities and other unlikely recipients, or drape them in a dress or overalls, and pass them off as family farmers.

You can't say farm subsidies are saving the family farm when most farmers get no subsidies. They grow the wrong crops or raise the wrong livestock. And those who get nothing really noticed that when they saw who did get subsidies, and how much.

The vast majority of the farmers who did get subsidies got a few hundred or a few thousand bucks a year. They noticed that, and what their neighbors got, too.

And all of the farmers who are turned away from conservation programs year after year for lack of funds noticed how subsidies didn't work for them.

One of the most interesting dynamics we noticed as the website uproar grew in late 2001 and early 2002 was the schizophrenic defense tactics of the farm subsidy fraternity.

The first impulse was to assert that the subsidies were good for all family farms, regardless of size. It was the big farmers trying to hide behind the small and the unsubsidized. To borrow a phrase from Gov. Schwarzenegger, it was kind of a girlie man strategy, when you think about it.

When that no longer worked, for the reasons I just mentioned, big farm operators and lobbyists began saying what they really thought, to reporters and in online discussions.

They described those who received small subsidies as 'hobby farms,' or 'not serious farmers,' not 'real farmers.'

The very crowd of small and medium-sized farmers that big-time commodity interests had hidden in for decades suddenly didn't deserve more support. Why? Because they just weren't big enough, they weren't aggressive enough, they weren't capitalized and mechanized enough, they weren't savvy enough to grow the right crops and cash in.

And that only made the schisms, the introspection, and the interest in subsidy reform more intense.

That leaves us with the remaining rationale for farm subsidies, the real reason we still have them, and they cost so much.

That is the profound export dependency of the crops we subsidize. We grow far more than we need for domestic purposes. So we depend on exports to market the rest. It can be 20 percent, 30 percent, 40 percent of production or much more, depending on the crop and the year.

But those markets aren't very dependable, and our domestic production is continually increasing.

Which brings me to the new policy framework for debating farm subsidies: it is the context not of saving the family farm, or rural America, or feeding the world--a myth I presume I needn't address in this audience.

The context is globalization. And the proper policy framework, domestically, is trade adjustment assistance.

And internationally, it is the dispute resolution and negotiation processes of the WTO. Brazil's challenges to the U.S. cotton program--in which EWG played an important role--and its separate challenge to the European Union's sugar program, introduce the other major new pressure factor for reform. (Budget crunches, of course, have been with us, and gamed, since time immemorial.)

Over the past few decades, farm policy makers have made a series of political decisions that obligate U.S. taxpayers to insulate some farmers from discontinuities in export markets. We insulate them, that is to say, from a globalized market that the entire subsidy crop sector is largely built around.

Crop export dependency should be thought of as the opposite side of the same globalization coin as import vulnerability. It is a reality of globalization, and we have known about it, and paid dearly for it through crop subsidies, since Earl Butz told farmers to plant fencerow to fencerow in the 1970s.

But instead of talking about this central problem within the narrow confines of farm subsidy program history and rhetoric, we should step back and think of it as another problem of trade adjustment. Specifically, trade adjustment assistance. And we should rethink and redesign farm subsidies accordingly.

Which brings me to those three people waiting in your office back home. All three want a loan, and because time is short, you meet with all three of them at once.

One is a large-scale commodity producer. You know just how large scale because you've gone on our database. You explain to the group how this farmer, and perhaps his wife and other relatives, received hundreds of thousands of subsidy dollars every year for a decade, with basically no limit. You explain how he'll get those subsidies into the future, and how they've boosted his land values and net worth. You explain, in fact, how he'll get tens of thousands every year no matter what happens to prices, income or trade.

The second customer takes this in. He is a small to mid-size farmer, maybe just starting out growing a commodity crop, maybe someone who grows something else. Not much to see on the farm subsidy database. Maybe, you say, the Farmers Home Administration would be a better place to look for help.

Finally, there's a man--or a woman--who has worked hard all his or her life and supported the family at a factory, or a software firm, or a textile mill. He made $50,000 a year until he lost his job to imports.

You tell him that in addition to his unemployment insurance, which will pay a fraction of his salary, he can petition the Labor Dept. (in groups of three or more workers) for trade adjustment assistance. If he qualifies, he can receive training, limited income support amounting to a few thousand dollars on average, a job search allowance, and maybe a relocation allowance.

He's one of hundreds of thousand of workers to apply for trade adjustment assistance. Including, recently, some farmers and aquaculture operations under a new trade adjustment assistance program for agriculture. But we are talking about a small amount of money and modest additional assistance for most workers who lose a job through trade.

Now as a banker, you know which one of these prospective customers you're most likely to do business with. So do they.

But is it fair, is it right, for that big agribusiness operator to get so much trade-related adjustment assistance, for so many years, when those other hard working people get so little?

Does it not make sense, in the interest of fairness to all workers and to taxpayers, to combine trade-triggered commodity subsidy payments with trade adjustment assistance programs for all other workers including the new one added for agriculture, and create a single pot?

Does it make sense to then scale commodity programs back, target them and limit them to working farms, and limit the duration for which a recipient could receive support--like we do with everyone else?

And might other forms of assistance, such as conservation payments, and actuarially sound crop or income insurance expand to fill part of the gap for all farmers, not just the subsidized, dependent few at the top?

Well, you won't be having that meeting anytime soon. But I'm willing to predict you'll be hearing this conversation the next time we take up a farm subsidy bill.
and if you goto their link there is a few charts and graphs
to show what/where the money has gone to.
What state in percentage basis has the most subsidies?
(answer below)
and link to almost every county in the states and how
much has been spent and on what and dig a little deeper, to who.

What state in percentage basis-
ND 78%

what are the top 3 subsidies(1995-2003)?--
disaster payments
conservation reserve
environmental quality incentives

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