Farm Subsidies: Sacred Cows No More

WASHINGTON—The hunt for cuts has come to this: Even agriculture subsidies—billions in spending both parties have embraced for years—are on the table.

With the farm economy booming and Washington on a diet, a program set up in the 1990s that cuts checks to farmers could be trimmed or eliminated next year when Congress writes a new five-year farm bill.

A group of conservative lawmakers has set its sights on these direct payments, and even farm-state Democrats who like the program say high crop prices make the outlays of about $5 billion a year harder to justify. Recently, the National Corn Growers Association, an industry lobby group, urged Congress to revamp the program, fearing it would be eliminated altogether.

Washington is looking everywhere for savings, even to programs once viewed as sacrosanct, including farm programs and defense spending.

Republican House Budget Committee Chairman Paul Ryan's blueprint for the fiscal 2012 budget puts agriculture subsidies in the cross hairs, seeking to cut $30 billion over a decade—starting when the next farm bill is passed in 2012—out of a total of some $150 billion in total expected spending on farm subsidies.

"We are very focused on getting a grip on spending—that means a lot of things even I like," said House Agriculture Committee Chairman Frank Lucas (R., Okla.) The direct payments have "a target on them," said Sen. Mike Johanns (R., Neb.), a former supporter of the program.

The farm payments at risk were supposed to be temporary. Lawmakers designed the program in the 1996 farm bill to wean farmers of rice, feed grains, cotton and later soybeans off years of subsidies tied to keeping portions of land fallow.

The direct payments have endured and are now a cornerstone of American farm subsidies. The $5 billion in direct payments to farmers accounts for a third of the roughly $15 billion in total farm subsidies last year, according to government data.

Benefiting are about one million farmers on 260 million acres of land spread around 364 of 435 congressional districts, according to the Agriculture Department and the Environmental Working Group, a organization that wants to eliminate some farm subsidies and use the money to protect natural habitats.

With the farm sector booming—the USDA estimates net farm income this year will be the second-highest in 35 years—direct payments have become an easy target. Iowa State University economist Chad Hart notes that the payments go to farmers regardless of crop price or quality—a way to provide assistance without violating international trade rules.

Farm subsidies have survived previous attempts to cut them back, and defenders will likely cite the continuing support for farmers in Japan and the European Union. This time, the U.S. industry has pared its defense of the status quo.

"Our members of Congress are telling us that they just can't support this program anymore," said Anthony Bush, a policy expert with the National Corn Growers Association.

"In times of record-high prices [the government is] still handing out money like this, it's just politically not possible, feasible or popular these days," he said.

Mr. Bush said corn farmers have the most to lose if direct payments are eliminated altogether. He said $2.1 billion of the roughly $5 billion in direct payments go to such farmers.

Corn futures Wednesday settled at $7.63 a bushel, down slightly after reaching an all-time high above $7.70 Tuesday. Prices have more than doubled since last summer on strong export demand, record ethanol output and steady buying by domestic livestock producers.

The National Corn Growers Association voted earlier this month to "investigate transitioning direct payments" into a more politically acceptable form of subsidy.

Roger Johnson, president of the National Farmers Union, said the direct subsidies have become indefensible because they don't go to farmers who need them to survive tough times.

Most of the payments go to the largest farmers in the U.S., given the amount of land they own. From 2002, when the program was expanded, through 2010, the top 10% of recipients received 67% of the funds, according to David DeGennaro, an Environmental Working Group legislative analyst.

Mr. Lucas of Oklahoma, the Republican chairman of the House Agriculture Committee, said in an interview that direct payments were fair game for lawmakers looking to cut spending next year. He still wants to resist some cuts, a point of view he outlined in a March 15 letter to the House Budget Committee written with Rep. Collin Peterson (D., Minn.). He didn't specify what might be protected.

Senate Majority Leader Harry Reid (D., Nev.), however, suggested earlier this month that farm subsidies were a likely budget-cutting target. He didn't specify which programs, but said, "Commodity price for farms, farm products have never been—never been higher than they are today. There's money there."

Study: No-Till Farming Reduces Greenhouse Gas Emissions

In the January edition of the Soil Science Society of America Journal, researchers at Purdue University published a report that found that cropland, left unplowed between planting seasons, significantly reduces the amount of nitrous oxide, a potent greenhouse gas (GHG), released into the atmosphere compared to conventionally plowed fields.The federally funded study concluded that no-till farming can help counteract global warming, as well as help farmers use their costly nitrogen-based fertilizers more efficiently. Researchers looked at the amounts of nitrous oxide released by no-till fields and plowed fields for three years, and found that no-till fields released 57 percent and 40 percent, respectively, less nitrous oxide than two types of tilling called chisel tilling and moldboard tilling. 

The researchers also found that emissions were fewer in fields with rotating crops than fields planted only with one crop each year. Nitrous oxide contains 310 times the heat-trapping power of carbon dioxide and can remain in the atmosphere for 120 years. The findings represent another benefit to the practice of no-till farming, which has been shown to reduce erosion and improve soil quality. Sixty-eight percent of U.S. nitrous oxide emissions came from farmland in 2008, according to the Environmental Protection Agency.

For additional information see: AP, Purdue Press Release, Study

The Six-Legged Meat of the Future

At the London restaurant Archipelago, diners can order the $11 Baby Bee Brulee: a creamy custard topped with a crunchy little bee. In New York, the Mexican restaurant Toloache offers $11 chapulines tacos: two tacos stuffed with Oaxacan-style dried grasshoppers.

Could beetles, dragonfly larvae and water bug caviar be the meat of the future? As the global population booms and demand strains the world's supply of meat, there's a growing need for alternate animal proteins. Insects are high in protein, B vitamins and minerals like iron and zinc, and they're low in fat. Insects are easier to raise than livestock, and they produce less waste. Insects are abundant. Of all the known animal species, 80% walk on six legs; over 1,000 edible species have been identified. And the taste? It's often described as "nutty."

The vast majority of the developing world already eats insects. In Laos and Thailand, weaver-ant pupae are a highly prized and nutritious delicacy. They are prepared with shallots, lettuce, chilies, lime and spices and served with sticky rice. Further back in history, the ancient Romans considered beetle larvae to be gourmet fare, and the Old Testament mentions eating crickets and grasshoppers. In the 20th century, the Japanese emperor Hirohito's favorite meal was a mixture of cooked rice, canned wasps (including larvae, pupae and adults), soy sauce and sugar.

Will Westerners ever take to insects as food? It's possible. We are entomologists at Wageningen University, and we started promoting insects as food in the Netherlands in the 1990s. Many people laughed—and cringed—at first, but interest gradually became more serious. In 2006 we created a "Wageningen—City of Insects" science festival to promote the idea of eating bugs; it attracted more than 20,000 visitors.

Over the past two years, three Dutch insect-raising companies, which normally produce feed for animals in zoos, have set up special production lines to raise locusts and mealworms for human consumption. Now those insects are sold, freeze-dried, in two dozen retail food outlets that cater to restaurants. A few restaurants in the Netherlands have already placed insects on the menu, with locusts and mealworms (beetle larvae) usually among the dishes.

Insects have a reputation for being dirty and carrying diseases—yet less than 0.5% of all known insect species are harmful to people, farm animals or crop plants. When raised under hygienic conditions—eating bugs straight out of the backyard generally isn't recommended—many insects are perfectly safe to eat.

Meanwhile, our food needs are on the rise. The human population is expected to grow from six billion in 2000 to nine billion in 2050. Meat production is expected to double in the same period, as demand grows from rising wealth. Pastures and fodder already use up 70% of all agricultural land, so increasing livestock production would require expanding agricultural acreage at the expense of rain forests and other natural lands. Officials at the United Nations Food and Agriculture Organization recently predicted that beef could become an extreme luxury item by 2050, like caviar, due to rising production costs.

Raising insects for food would avoid many of the problems associated with livestock. For instance, swine and humans are similar enough that they can share many diseases. Such co-infection can yield new disease strains that are lethal to humans, as happened during a swine fever outbreak in the Netherlands in the late 1990s. Because insects are so different from us, such risks are accordingly lower.

Insects are also cold-blooded, so they don't need as much feed as animals like pigs and cows, which consume more energy to maintain their body temperatures. Ten pounds of feed yields one pound of beef, three pounds of pork, five pounds of chicken and up to six pounds of insect meat.

Insects produce less waste, too. The proportion of livestock that is not edible after processing is 30% for pork, 35% for chicken, 45% for beef and 65% for lamb. By contrast, only 20% of a cricket is inedible.

Raising insects requires relatively little water, especially as compared to the production of conventional meat (it takes more than 10 gallons of water, for instance, to produce about two pounds of beef). Insects also produce far less ammonia and other greenhouse gases per pound of body weight. Livestock is responsible for at least 10% of all greenhouse gas emissions.

Raising insects is more humane as well. Housing cattle, swine or chicken in high densities causes stress to the animals, but insects like mealworms and locusts naturally like to live in dense quarters. The insects can be crowded into vertical stacked trays or cages. Nor do bug farms have to be restricted to rural areas; they could sprout up anywhere, from a suburban strip mall to an apartment building. Enterprising gourmets could even keep a few trays of mealworms in the garage to ensure a fresh supply.

The first insect fare is likely to be incorporated subtly into dishes, as a replacement for meat in meatballs and sauces. It also can be mixed into prepared foods to boost their nutritional value—like putting mealworm paste into a quiche. And dry-roasted insects can be used as a replacement for nuts in baked goods like cookies and breads.

We continue to make progress in the Netherlands, where the ministry of agriculture is funding a new $1.3 million research program to develop ways to raise edible insects on food waste, such as brewers' grain (a byproduct of beer brewing), soyhulls (the skin of the soybean) and apple pomace (the pulpy remains after the juice has been pressed out). Other research is focusing on how protein could be extracted from insects and used in processed foods.

Though it is true that intentionally eating insects is common only in developing countries, everyone already eats some amount of insects. The average person consumes about a pound of insects per year, mostly mixed into other foods. In the U.S., most processed foods contain small amounts of insects, within limits set by the Food and Drug Administration. For chocolate, the FDA limit is 60 insect fragments per 100 grams. Peanut butter can have up to 30 insect parts per 100 grams, and fruit juice can have five fruit-fly eggs and one or two larvae per 250 milliliters (just over a cup). We also use many insect products to dye our foods, such as the red dye cochineal in imitation crab sticks, Campari and candies. So we're already some of the way there in making six-legged creatures a regular part of our diet.

Not long ago, foods like kiwis and sushi weren't widely known or available. It is quite likely that in 2020 we will look back in surprise at the era when our menus didn't include locusts, beetle larvae, dragonfly larvae, crickets and other insect delights.

Rising Demand, Prices Boost Farm Income 31%

The U.S. Agriculture Department said Tuesday that net farm income, its rough measure of the agriculture sector's profitability, is expected to jump 31% this year to $81.6 billion from $62.2 billion last year.

The forecast shows how the global recession only temporarily interrupted a farmbelt boom that is being driven in large part by the expanding appetites of emerging nations such as China and the U.S. biofuels industry.

"The mid-1970s was the last comparable period when U.S. farming enjoyed multiple years of sustained levels of high output and income," the USDA report stated.

The Tuesday report is the second time the USDA has adjusted upward its profit outlook since the agency issued its original forecast of $63 billion in February. As a result, the sector's profitability has nearly returned to its level in 2008, when net farm income hit $86.6 billion. The government will issue its initial forecast for 2011 net farm income in February.

Thanks to broadly rising prices of livestock and major crops such as cotton, corn and wheat, farmers are generating 10.4% more revenue this year, the USDA calculates. At the same time, the farm sector's production expenses are rising just 2%.

One significant expense that took an unusual tumble this year was the price of seed, which had climbed so sharply since the advent of crop biotechnology in the mid-1990s that farmers complained loudly during the workshops held by the Obama administration this year to look at competition issues in agriculture.

According to the USDA, the prices farmers are paying for seeds this year are down 3.9%. Before this year, farmers saw their seed expenses jump 41% from 2006 through 2009, when it hit $15.5 billion, the USDA said.

Despite high grain prices and the surge in profitability, U.S. farmers are slated to collect about $12.4 billion in aid from Uncle Sam this year, close to the amount of federal aid they reaped in 2009.

Growers are getting about $4.8 billion in direct payments that aren't pegged to market prices, as well as checks for land-idling conservation programs and weather-related disasters, among other things.

Less Corn, Saner Fishing and Soda on Fridays

Chef Mario Batali looks ahead to the future of food, from farms to school lunches, and asks for moderation.

By MARIO BATALI  What lies ahead in the future of food? I don't think we'll be eating high-tech food pills anytime soon, thankfully. But with problems like collapsing fisheries and rising levels of childhood obesity, we do need to step back and consider where we want to be a few decades from now.

The future of food in America hinges on our ability to listen to what the earth and scientists and farmers are telling us. The issues surrounding food are not all black and white, good or bad. We must embrace moderation, from big business to the small producer, from steak to tofu. My own concerns are hardly unique to me—and I neglect countless important points—so think of what follows as the start of a conversation.

Corn as a Vegetable

Corn will continue to be planted "fence row to fence row" and subsidized by the U.S. government, sneaking its way into our bread and cereal and every other product, often in the form of high-fructose corn syrup. But farmers don't plant corn because they love corn syrup, or because they prefer seeing their crop used to fill the tank of an SUV with biofuel rather than to feed people in the developing world. They do it because it's how they can make money.

I'd hope that we can give our corn farmers more economically viable options, such as sustainable soy and alfalfa, and tell the American government that we want our corn to be a vegetable again. We might even stop making villains of all sugars and come to realize that moderation is the key. Eat all sugars, including high-fructose corn syrup, in moderation.

Catching Less

Fisheries all over America are collapsing. If we continue to ignore the experts' advice, we will definitely see the extinction of bluefin tuna and many other species. Entire fishing villages are losing their livelihoods at breakneck speed. I believe that Americans can learn to eat fish responsibly, sparing some of the more endangered species like Atlantic cod and grouper, just as fishermen can learn to accept seasonal quotas as a way to preserve jobs and income for generations to come.


Minding Our Meat

Industrial livestock farms are polluting and inhumane, and they account for much of the pathogenic bacteria, like salmonella, that end up in our meat and poultry (and even our leafy greens). They also sustain notoriously bad working conditions for the people that labor in them. We need to pay more attention to where our meat comes from, or we will continue to pay the price in public health and worker safety.

More encouragingly, the infrastructure for distributing meat from small farmers is improving, with Wal-Mart, of all companies, at the cutting edge. Campaigns like "meatless Monday" have also gained momentum. It may be unreasonable to expect everyone to become a vegetarian, but is it such a stretch for Americans to skip meat just one day a week?

Sweet Drinks

If Americans, especially younger Americans, keep drinking soda at the rate of 1,000 calories a day, we will continue to pay the price in higher rates of obesity, diabetes and heart disease. But maybe we can take Michael Pollan's sensible advice and "at least return soda to its place as a special-occasion drink." (How about Soda Fountain Fridays, along with pizza for a special food/drink combo?) And perhaps Americans will finally wake up and realize that the bottled-water companies are literally drilling up the water from under their houses and selling it back to them in plastic at the corner store.

Help for Lunch Ladies

My own Mario Batali Foundation is all about kids, so this issue is particularly dear to me. I hope that the future of food in America holds a drastic and intelligent update of the USDA-sponsored national school lunch program, which is one of our most successful social welfare efforts, feeding some 30 million children. We can't forget that many of these children depend on school lunch for their only meal each day, which makes it crucial that they get the nutrition they need.

To do this, the program needs to change its current focus on simply meeting calorie standards and holding down fat levels. Switching to an emphasis on certain amounts of particular foods, like lean protein, whole grains and vegetables, would give lunch ladies all over America some guidance in meeting a wider range of nutritional needs.

Those Amber Waves Are Fueling Exports

Foreign demand for U.S. grain keeps rising, and farmers have cash to spare. Just a few years ago, who would have guessed that farms would turn out to be a bright spot in the U.S. economy? Farmers were fretting about falling prices and mounting competition from Russia and Ukraine. Today drought has withered much of the Russian and Ukrainian crops, and the world needs more grain—and soybeans and pork—than ever. The best place to get it: the fertile soil of the U.S. Midwest and South, home to some of the most productive farms on earth.

In the first eight months of 2010, U.S. agricultural exports increased 14 percent, to $69.8 billion, from the same period a year earlier, according to the most recent U.S. Agriculture Dept. data. Joseph Glauber, chief economist for the USDA, says farm exports in the year that began on Oct. 1 may top the 2008 record.

This cornucopia is providing an unexpected boost to President Barack Obama's drive to double exports by 2015. China's need for cotton, pork, corn, and soybeans will make it the second-biggest U.S. agricultural trading partner in 2011, the USDA estimates. Shipments of farm products to China will total $15 billion, compared with Canada's $16.8 billion and Mexico's $14.6 billion. Corn prices are up over 60 percent since June, while wheat as much as doubled. "It's going to be the best year American farmers have had in two and a half decades," says Dennis Gartman, an economist and editor of The Gartman Letter in Suffolk, Va.

The cash that farmers are fingering in their pockets is boosting companies at home as well. While agriculture accounts for just 1 percent of the $14.3 trillion U.S. economy, the actual impact of surging prices may be 10 times more once spending on equipment, seeds, grain handling, and food processing is added, says Jason Henderson, an economist at the Federal Reserve Bank of Kansas City.

Sales of farm equipment are correlated to growers' cash receipts, which should increase 24 percent, to $118.4 billion, for majåor crops in the 2010-11 season, Ann Duignan, an analyst at JPMorgan Chase (JPM) in New York, said in an Oct. 8 report. That's good news for Moline (Ill.)-based Deere (DE), the world's largest farm-equipment maker as well as rivals Amsterdam-based CNH Global (CNH) and Duluth (Ga.)-based Agco (AGCO), she says.

Deere's per-share profit will more than double, to $4.25, in the current fiscal year, according to the mean estimate of eight analysts surveyed by Bloomberg. Cargill, the giant grain handler and food processor, said on Oct. 12 that thanks to price volatility and the performance of its affiliate, fertilizer producer Mosaic (MOS), profit for the latest quarter rose 68 percent.

Back in the 1980s, falling prices, record-high interest rates, and too much farmland bought on credit prompted a wave of farm bankruptcies. Now low interest rates are amplifying the boom, says Tom Neher, vice-president for AgStar Financial in Rochester, Minn. The bank issued twice as many farm-equipment loans as expected in a recent promotion. "I've seen more brand-new combines bought than I've seen for a long, long time," says Neher, who helps manage $2.1 billion in grain-related loans and leases for AgStar. "When you can get a machinery loan for 4 percent interest, that's about as low as it ever gets."

There are limits to how much cash will trickle down to the Main Streets of rural America, says Ernie Goss, an economics professor at Creighton University in Omaha: "You have fewer and fewer farms, and fewer and fewer farm families, so it hasn't spilled into small businesses like the drugstore or the shoe store." Farm prices have been supported by a lower dollar, which boosts exports, and not by rising domestic demand, says Goss. Small businesses "are mystified by all these reports about how wonderful the rural economy is. That's because they're selling in Greeley, Neb., and the farmer out there is selling in Beijing."

Still, the mix of foreign demand and a weak dollar is the best news farm country has had for decades. "It is a perfect situation for U.S. farmers, the best since the early 1970s," says Bill Adams, a trader at ACT Currency Partner, a currency and commodity specialist in Zurich. "There will be quite a few Cadillacs sold in the Midwest this Christmas."

The bottom line: Farm exports from the U.S. are rising fast. That's benefiting farm-equipment makers, fertilizer companies, and other suppliers.  By Whitney McFerron, Jeff Wilson, Shruti Singh and Elizabeth Campbell

Why Monsanto is paying farmers to spray its rivals’ herbicides

Monsanto's ongoing humiliation proceeds apace. No, I'm not referring to the company's triumph in our recent "Villains of Food" poll. Instead, I'm talking about a Tuesday item from the Des Moines Register'sPhilip Brasher, reporting that Monsanto has been forced into the unenviable position of having to pay farmers to spray the herbicides of rival companies. 

If you tend large plantings of Monsanto's "Roundup Ready" soy or cotton, genetically engineered to withstand application of the company's Roundup herbicide (which will kill the weeds -- supposedly -- but not the crops), Monsanto will cut you a  $6 check for every acre on which you apply at least two other herbicides. One imagines farmers counting their cash as literally millions of acres across the South and Midwest get doused with Monsanto-subsidized poison cocktails.

The move is the latest step in the abject reversal of Monsanto's longtime claim: that Roundup Ready technology solved the age-old problem of weeds in an ecologically benign way. The company had developed a novel trait that would allow crops to survive unlimited lashings of glyphosate, Monsanto's then-patent-protected, broad-spectrum herbicide. It was kind of a miracle technology. Farmers would no longer have to think about weeds; glyphosate, which killed everything but the trait-endowed crop, would do all the work. Moreover, Monsanto promised, Roundup was less toxic to humans and wildlife than the herbicides then in use; and it allowed farmers to decrease erosion by dramatically reducing tillage -- a common method of weed control.

There was just one problem, which the Union of Concerned Scientists pointed out as early as 1993, New York University nutritionist and food-politics author Marion Nestle recently reminded us. When farmers douse the same field year after year with the same herbicide, certain weeds will develop resistance. When they do, it will take ever-larger doses of that herbicide to kill them -- making the survivors even hardier. Eventually, it will be time to bring in in the older, harsher herbicides to do the trick, UCS predicted. 

At the time and for years after, Monsanto dismissed the concerns as "hypothetical," Nestle reports. Today, Roundup Ready seeds have conquered prime U.S. farmland from the deep South to the northern prairies -- 90 percent of soybean acres and 70 percent of corn and cotton acres are planted in Roundup Ready seeds. Monsanto successfully conquered a fourth crop, sugar beets, gaining a stunning 95 percent market share after the USDA approved Roundup Ready beet seeds in 2008. But recently, as I reported here, a federal judge halted future plantings of Roundup Ready beets until the USDA completes an environmental impact study of their effects.

Given what happened to other Roundup Ready crops, it's hard to imagine that the USDA can come up with an environmental impact study that will exonerate Monsanto's sugar beet seeds. Today, there are no fewer than 10 weed species resistant to Roundup, thriving "in at least 22 states infesting millions of acres," The New York Times recently reported. And the ways farmers are responding to them are hardly ecologically sound: jacked-up application rates of Roundup, supplemented by other, harsher poisons.

And as Monsanto's once-celebrated Roundup Ready traits come under fire, there's another Roundup problem no one's talking about: Roundup itself, once hailed as a an ecologically benign herbicide, is looking increasingly problematic. A study by France's University of Caen last year found that the herbicide's allegedly "inert" ingredients magnify glyphosate's toxic effects. According to the study, "the proprietary mixtures available on the market could cause cell damage and even death" at levels commonly used on farm fields.

Moreover, the annual cascade of Roundup on vast swaths of prime farmland also appears to be undermining soil health and productivity, as this startling recent report shows.

Meanwhile, the endlessly repeated claim that Roundup Ready technology saves "millions of tons" of soil from erosion, by allowing farmers to avoid tilling to kill weeds, appears to be wildly trumped up. According to Environmental Working Group's reading of the USDA's 2007 National Resource Inventory, "there has been no progress in reducing soil erosion in the Corn Belt since 1997." (The Corn Belt is the section of the Midwest where the great bulk of Roundup Ready corn and soy are planted.) "The NRI shows that an average-sized Iowa farm loses five tons of high quality topsoil per acre each year," EWG writes.

In short, Monsanto's Roundup Ready technology is emerging as an environmental disaster. The question isn't why a judge demanded an environmental impact study of Roundup Ready sugar beets in 2010; it's that no one did so in 1996 before the technology was rolled out. After all, the Union of Concerned Scientists was already quite, well, concerned back then.

As I wrote in June, rather than spark a reassessment of the wisdom of relying on toxic chemicals, the failure of Roundup Ready has the U.S. agricultural establishment scrambling to intensify chemical use. Companies like Dow Agriscience are dusting off old, highly toxic poisons like 2, 4-D and promoting them as the "answer" to Roundup's problems.

In a better world, farmers would be looking to non-chemical methods for controlling weeds: crop rotations, mulching, cover crops, etc. Instead, they're being paid by Monsanto to ramp up application of poisons. Perhaps the USDA's main research arm, the National Institute of Food and Agriculture, will rise to the occasion by funding research in non-chemical weed-control methods? Not likely, since the Obama administration tapped a staunch Monsanto man to lead that crucial agency.

But instead of true innovation, we have the spectacle of Monsanto paying farmers to dump vast chemical cocktails onto land that not only feeds us, but also drains into our streams and rivers. BY Tom Philpott