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Michael Pollan on Agribusiness Populism

Saturday, October 25th, 2008

This is a near quote of Michael Pollan on NPR’s Fresh Air this week:

There is a real issue of perception of elitism, and it is one of ironies of our society that junk food being sold by multinational corporations like McDonalds and Kraft appears to be populist, and food grown by struggling, scrupulous farmers is regarded as elitist. And I think there is something wrong with this picture, that those agribusiness companies have seized the populist high ground. When you look at how that supposedly cheap, populist food is produced, it’s dependent on government handouts, it’s dependent on the brutalizing of workers and brutalizing of animals, and it suddenly appears in a very, very different light.

The discussion occurs at about 31:00 minutes into the interview.

Pollan’s comments notwithstanding, it remains the case that much of the sustainable and local food system in the U.S. supports those with solidly middle to upper-class paychecks. This has bothered me for years.

We have seen renewed food systems that we cheer come into existence in recent years, but we too often fail to acknowledge that the growing gap between the rich and the poor is precisely what has made this possible.

Who doesn’t love a Niman Ranch hog farmer? But these farmers that we love to love produce meat for high-end markets on the coasts. Certainly, this is better than producing hogs in confinement for export or growing corn for unmitigated biofuels production. But a local food system that caters to and relies upon a growing wealth disparity leaves too many of the social ills that we set out to address untouched.

That being said, Pollan, as he is apt to do, offers a concise and effective rebuttal to the “local food as elitist” argument. In fact, it is best rebuttal I ever recall having heard.

As We Sow

Sunday, April 6th, 2008

Part 1



Part 2


Part 3

Horribly depressing. Film credit.

Livestock pollution turns off young Iowans

Sunday, January 13th, 2008

I had the following oped published in today’s Des Moines Register:

Livestock pollution turns off young Iowans

BRIAN DEPEW, SPECIAL TO THE REGISTER

I recently returned from a visit to my family’s farm. While there, I was dismayed to learn that three more livestock confinement buildings are being built within 2 miles. Once complete, there will be 13 industrial livestock buildings within 3 miles of our farm. There is now at least one facility in every direction.

After growing up and attending college in Iowa, I left the state. Around the same time, political leaders in Iowa began to notice young Iowans leaving in droves. They wondered out loud: What can be done to keep our best and our brightest in the state? In 2005, legislators floated a plan to exempt Iowans under 30 from state income taxes. Then last year, the Legislature commissioned “Generation Iowa” to ponder the problem further.

But tax breaks and task forces will not help Iowa overcome the problems it faces. Today’s young adults are moving to places with vibrant natural resources, thriving communities and healthy economies. But for two decades Iowa’s leaders have sat silently while a corporate system of animal agriculture planted itself firmly in the state, undermining these crucial amenities. Our leaders are evading this issue and ignoring the barrier that large confinement operations create to a prosperous future.

Political leaders in Iowa have uncritically embraced the industrialization of animal agriculture and by doing so have contributed to the ongoing decline of family farms and rural communities. Iowa’s leaders took it a step further by ensuring that Iowa citizens have no recourse against the environmental destruction industrial livestock facilities sow upon the state.

I have some advice for the Generation Iowa Commission, due to report to the governor and Legislature on Jan. 15. If Iowa is serious about keeping young people in the state, it should work first to stop, and then reverse, the rise of large confinement operations. By destroying the economic and social fabric of rural Iowa and degrading the environment of the state, confinement facilities make returning to Iowa undesirable.

With palpable air pollution and undeniable water pollution, the environmental strife is easy to see. With fewer family livestock producers, rural communities are left without a vital sector of economic activity. As farm families leave the countryside, rural communities face the challenge of keeping afloat critical social infrastructure such as schools and government services. No young Iowan wants to return to a dying community or a polluted state.

For more than a decade, Iowa Democrats have run on a promise to clean up this mess. After taking charge last year of all three branches of state government for the first time in 40 years, they largely capitulated on this issue. They must do better in 2008.

Iowa cannot afford to lose another generation of young people to the allure of other states, and rural Iowa cannot afford to lose its next generation to the allure of the big city. The state must fiercely protect its resources and amenities from those looking to make a quick buck off the back of the state’s long-term viability.

Like others born and raised in the state, I would like to return one day, but I am loath to the idea of returning to a state overrun by an environmental, economic and socially detrimental livestock industry.

BRIAN DEPEW lives in Lyons, Neb. He grew up in Laurens and was the Green Party candidate for Iowa secretary of agriculture in 2002. He works for the Center for Rural Affairs, but these thoughts are his own.

Beyond Agriculture

Monday, September 10th, 2007

In our next post, Iowa Senator Tom Harkin will write about his hopes for the 2007 Farm Bill. A story in yesterday’s Des Moines Register offers some policy-context to parts of his post.

Talk of agriculture often dominates discussions about the farm bill, but yesterday Philip Brasher wrote about another sort of battle brewing in the debate over the 2007 Farm Bill.

Brasher: Harkin prepares push for rural development

A battle could be brewing between the House and Senate on an issue that seldom gets much attention in Congress - rural development.

The chairman of the Senate Agriculture Committee, Sen. Tom Harkin, is preparing a series of rural development proposals, including funding for water and sewer improvements, venture capital and even child-care centers, that would increase federal spending by $2 billion over the next five years.

The farm bill that passed the House this summer had relatively little new money for rural development programs. [Snip…]

A mandatory program must be included in the federal budget each year. Spending for other rural development programs in the House bill would be left to the discretion of congressional appropriations committees.

By contrast, all of the $2 billion in new rural development money that would be in Harkin’s legislation would be designated as mandatory spending, according to his staff, which provided a description of his plans.

“We need to help communities help themselves to create quality jobs and an improved quality of life,” says Harkin, D-Ia.

Harkin’s proposal provides money for rural water and sewer systems which currently face a large funding backlog. It also includes money for constructing and maintaining rural hospitals, assisted-living facilities and child care facilities.

The proposed legislation designates $100 million for microenterprise loan programs for people looking to start a new rural businesses, and $200 million over five years for value-added grants.

These are important programs for rural America, and critical after years of farm consolidation and rural out-migration driven by unlimited farm payments in the Commodity Title of the bill. But the fight won’t be easy.

Republican-led Congresses repeatedly nicked several rural development programs that were authorized in the 2002 farm bill, including the value-added grants and Internet loans. (This is the reason the House Agriculture Committee’s chairman, Rep. Collin Peterson, D-Minn., gave for not putting more mandatory spending into rural development this year.)

Harkin has allies in the Bush administration for at least some of his ideas. In threatening to veto the House farm bill, the White House specifically cited the lack of funding for rural hospitals and infrastructure, among other reasons.

I will be watching the debate unfold, and hoping Harkin holds out for a full $2 billion in mandatory rural development spending in the 2007 Farm Bill.

As Wal-Mart Stock Rises, Rural America Falls

Saturday, August 4th, 2007

Before you catch yourself nodding in agreement with that title I have to warn you, Jim Branscome doesn’t agree:

[T]he reality of what really drives the rural American economy is Wal-Mart and the 39 other companies in the Yonder 40.

But perhaps I should back up and explain how we got to this point in the debate before I offer my full rebuttal of Jim’s claim. About a month ago the Daily Yonder asked Jim Branscome to come up with an index of stocks that represent the economic well-being of rural America. In unveiling the resulting Yonder 40, they proclaimed:

Finally, there’s a stock index that tells rural America how it’s doing. This is the Yonder 40, forty companies that reflect the economy of rural America.

It is an interesting idea, but there is a slight problem. It seems that a number of the companies selected for the Yonder 40 are companies whose interests and goals actually stand squarely at odds with the well-being of rural American - be it economic or otherwise. I first expressed this in a comment posted at Daily Yonder:

What does the Yonder 40 tell us?

This is an interesting idea — an economic indicator of the relative health of rural America. But what will we really know when the Yonder 40 soars, and when the Yonder 40 falls? With stocks like Wal-Mart, Tyson, Smithfield, Monsanto, and ConAgra included in the index, the economic health of rural America might in fact be measured as an inverse of the Yonder 40.

When Wal-Mart is doing well, businesses up and down main street in rural communities are being driven out of business. And when Wal-Mart is doing well money is being sucked out of rural communities, destined for the pockets of rich urbanites.

When Smithfield is doing well, farmers aren’t receiving a fair price for their livestock. And when Smithfield is doing well, family livestock producers are being put out of business. And so it goes for a number of the stocks in the Yonder 40.

So, what does the Yonder 40 really tell us?

To the credit of the editors at the Daily Yonder, they picked up on my comment, and repeated the question in a follow-up post about their stock index. They also went back and asked creator of the index, Jim Branscome, to respond to my concern about the reliability of concluding that when Wal-Mart (and other companies in the index) are doing well, rural America is doing well. This drew a response from Jim:

None of us may like it and would love a stock index that reflects the hard work of the small farmer and throws in the sweet smell of alfalfa drying in the windrow, but the reality of what really drives the rural American economy is Wal-Mart and the 39 other companies in the Yonder 40. [snip]

We sorted through about 3000 stocks before we selected the sainted 40. It would have been nice had we come across investable public companies that represent farmer cooperatives, rural electric co-ops, or worker-owned coal mines and sawmills. There ain’t none. No fan of the Daily Yonder may be comfortable with it, but the reality is that Thomas Jefferson’s vision of America as a nation of farmers and toilers in the soil is as dead as our third president. Or at least that’s what you find when you try to construct an index using SEC registered and stock exchange listed companies for rural America.

Had we tried somehow to value the private companies that deal with rural America, impossible as that probably is, we would also have had to list Cargill and Koch Industries and the Chicago Board of Trade as well as the little bitty businesses that dot our small towns.

While briefly lamenting the downfall of the small farmer, the farmer cooperative, and the locally owned sawmill, Jim stands by his original assertions. He further asserts that the stock price of companies like Wal-Mart, Smithfield and Monsanto are a representative corollary to the economic well-being of rural America. I feel the need to further explain my objection.

In outlining my objection, I will stick with Wal-Mart as an example. However, my objection is not about Wal-Mart per se, and the argument can be easily extended to Smithfield, Monsanto, or a number of the other companies that comprise the Yonder 40.

A shuttered building on Main Street in Lyons.

If you walk down Main Street in Lyons, Nebraska (population 960) where I live it doesn’t take long to start to understand the result of the Walmartization of rural America. A solid 50% of the buildings on Main Street are simply closed, boarded up or vacant. With a lack of economic activity on the street, even some remaining businesses are open sporadically at best. A few can still be counted on to be open every day, but of those, one often wonders how they manage to stay open and how many more years they will hang on for.

It hasn’t always been this way. But ever since Wal-Mart began their concerted campaign to infiltrate rural America, and stake their business model on gobbling up an ever-increasing share of rural retail activity, small businesses up and down Main Street in Lyons and small town streets like it across the country, have been shuttering their doors (pdf). Every time one does it means a loss of local jobs and local economic activity. These are losses that often have ripple effects throughout a community. Wal-Mart is most often located in a nearby mid-sized town, and even if one does drive to Wal-Mart to work, the jobs don’t pay what the local jobs did. To add insult to injury, Wal-Mart’s profits are wired to Arkansas at the close of business every day. With them goes the multiplier effect of money spent locally.

In short, this is to say, when Wal-Mart does well rural America does poorly. But let’s look at some numbers too.

From 1990 to 2000 Wal-Mart stock rose from an adjusted daily close of $6.45 per share to $53.31 per share. That is an 8-fold increase. Following the logic of the Yonder 40, this should be an indication of rising prospects for rural American during the same time period. But rural America did not fair quite so well during the 1990s.

Swept Away, a study done by Jon Bailey at the Center for Rural Affairs, reports that while per capita earnings for metropolitan counties in the states studied rose steadily between 1990 and 2000, rural farm and rural non-farm per capita earnings were essentially stagnant in real dollars. At the beginning of the decade, the average person in rural farm counties earned 58 cents for every dollar earned by the average person in a metropolitan county. But by 2000, the average rural farm county resident earned only 48 cents for every dollar earned by a metropolitan county resident. During the same time period, metropolitan counties also saw a job growth rate of 25%. Rural farm counties experienced job growth at a rate just 1/5 of metropolitan counties.

In the 10 year period in question Wal-Mart stock doubled, and then doubled, and then doubled again. However, for every year of that period, rural America slipped further and further behind the earnings and job growth of their fellow metropolitan residents. During this time period rural America also continued to lose population, watch the number of farmers decline, and watch the younger generation depart for the city.

So, there does not in fact seem to be a positive correlation between Wal-Mart’s stock price and the overall economic health of rural America. While I use Wal-Mart as the focus of my rebuttal, I will stand behind my argument in reference to the entire Yonder 40 index.

In his response to me, Jim Branscome also counters my critique by arguing that the companies in the Yonder 40 were used in part because there are a limited number of publicly traded companies to choose from. Home-grown businesses that might actually tell us something about the economic prospects of rural America aren’t traded on the big stock exchanges. However, that is not a reason to argue that the companies that do comprise the Yonder 40 are positively related to the economic fortunes of rural America. If anything it reveals a crack in the methodology behind using a stock index to measure the economic health of rural America. At the end of the day, I would actually argue that this is close to the truth. I doubt there are very many companies that are traded publicly that have a positive correlation with the economic (and social) health of rural communities.

All that being said, I think we should keep the Yonder 40. That might seem like a strange conclusion, but I think it does tell us something.

When Wal-Mart’s stock goes up, another small business that was the life-blood for a rural community somewhere will shutter its doors. When Monsanto’s stock goes up, you can count out another family farmer whose children would enroll in rural school struggling to maintain enrollment. And when Smithfield’s stock goes up, you you can bank on more environmental degradation from large livestock facilities - degradation that has a negative environmental, social and economic impact for rural communities.

That is to say, when the Yonder 40 soars we best expect troubled times ahead for rural America.

Whole Foods, Empty Promises

Saturday, July 14th, 2007

Long time readers know I’m no fan of corporate behemoths, and have no confidence in the idea that what a rural community needs to prosper is another Wal Mart, another large livestock facility, or a corporate dump.

For similar reasons, I don’t put much faith in Whole Foods’ recent promise to do more to support local farmers - an effort that would only slow the trend to corporatize the natural food market, not stop it. This week we got another reason to think Whole Foods will not be inclined to crusade for justice on any front as long as CEO John Mackey is in charge.

By now you’ve probably heard, Whole Foods CEO, John Mackey, spent much of the last two years posting anonymous diatribes online in an ongoing effort to paint his chief competitor, Wild Oats, in a negative light. Read the original story at the Wall Street Journal.

I want to draw attention to one of Mackey’s posts in particular - the one in which he talks of his love for Wal Mart, his disdain for labor unions, and his apparent dislike for anyone who might claim to be a victim of sexual or racial discrimination. Mackey writes:

Wal-Mart was just named the most admired company in America (also by Fortune Magazine — that magazine which obviously hates “working people”). I probably admire Wal-Mart more than any other company in the world (except for maybe Whole Foods!). What a great, great company! Wal-Mart has single handedly driven down retail prices across America. They have improved the standard of living for millions and millions of American people. Also Wal-Mart is crushing the parasitical unions across America. I love Wal-Mart! Damn straight that they should be on this list. Sexual discrimination lawsuits? Sexual harrassment lawsuits? Racial discrimination lawsuits? What company doesn’t have those? The Trial Lawyers (the richest professional class in the United States and the largest contributors to the Democratic Party — even bigger than labor unions which are #2) sue Wal-Mart. They sue Whole Foods Market. They sue every business which makes any money. They are probably even a bigger threat to our country than labor unions are (if that is possible?).

For Mackey, an interest in the all-mighty dollar trumps workers rights and pesky discrimination lawsuits. Mackey’s love for Wal Mart, which relies on boatloads of imported merchandise, legions of poverty-stricken workers, and clear anti-competitive practices, leaves one wondering.

Just how serious can Whole Foods possibly be about helping small, local farmers?

Hat tip: Tom Philpott at Gristmill

Let There Be No Doubt

Wednesday, July 11th, 2007

The Farm Bureau supports unlimited commodity subsidies — subsidies that help the nation’s largest farms drive family farmers out of business. Responding to a draft version of the 2007 Farm Bill, the Farm Bureau said in a press release:

While Farm Bureau was pleased there are no cuts to payment limits in the proposal, the organization will watch the debate closely in the future. “We recognize that the farm bill debate is far from over and that changes are likely in the coming weeks,” said Stallman. “Farm Bureau will be particularly watchful of changes to payment limitations and adjusted gross income caps.”

In so doing, Farm Bureau is protecting the interests of these “farms.”

Rank Farm Businesses Location 2003-2005
1 Balmoral Farming Partnership Newellton, LA $7,908,563
2 Phillips Farm Yazoo City, MS $5,893,194
3 Due West Glendora, MS $5,417,792
4 Kelley Enterprises Burlison, TN $4,933,845
5 Walker Place Danville, IL $4,627,034
6 R A Pickens & Son Company Pickens, AR $4,307,636
7 Dublin Farms Corcoran, CA $4,286,864
8 Morgan Farms Cleveland, MS $4,192,828
9 Perthshire Farms Gunnison, MS $4,161,420
10 P G C Farms Brinson, GA $4,157,017

The Farm Bureau has long claimed to be the “largest farmer-member organization” in the country, but when it comes to Farm Bill politics, they are a lobby for the interests of large agribusiness. Supporting $8 million subsidy checks is no way to be a friend of the farmer.

With their support for unlimited subsidy checks, Farm Bureau is helping to drive the continued consolidation of agriculture. I’m sure their lobbyists in Washington talk a good line about supporting farmers, but in the countryside the devastating effects of the agricultural policy they help write is clear.

Restoring Rural Roots

Monday, July 9th, 2007

by Steph Larsen

In a recent trip through the small town of Walthill, Nebraska, the phrase “rural revitalization” took on a whole new meaning. In this case, it was the lack of any kind of prosperity that made it obvious to me why rural communities are in need of revitalization. Main Street looked painfully deserted, with two recent arsons adding fresh scars to the once-active storefronts. As we drove around the residential area, most houses looked to be in some state of disrepair—so much so that it was difficult to really tell which were homes and which had already been abandoned. If ever there was a town that needed some life breathed back into it, this was it.

About the same time, I read an article about the aging farmer population and the simultaneous difficulty of young and beginning farmers breaking into farming. This from John Seewer from the Associated Press:

So many American farmers are working longer than ever before that one in four is at least 65 years old. [snip] Within the next decade those older farmers will be looking for someone to take over their operations and selling millions of acres of land.

Much of that land will be merged into bigger farms with fewer people working on them. Rural communities will lose even more young people, and a few will struggle for survival. [snip]

“Some of those communities will survive, but the nature of the community will change,” said Lori Garkovich, a rural sociologist at the University of Kentucky. “Studies have shown that industrial farms change communities in many ways.

Todd Stewart, who raises hogs and cattle near Meadow Grove, Neb., and at 47 is among the youngest farmers in the area, said it’s hard to find volunteers who will coach ball teams or help out at church anymore.

“Towns are hurting,” he said. “The school is usually the first to go, then it’s the churches and then the town. There’s going to be a lot of towns that will wither up and go away.”

Communities need people, of course, but vibrant, sustainable rural communities need people of all ages so that the infrastructure that makes a town strong—schools, churches, local businesses—are able to thrive. Farmers are a significant part of this equation, and being able to recruit young people into farming will only help to strengthen the communities in which they live.

In my last post, I talked about local ownership as a key component if rural communities will see any substantial benefit from the ethanol boom. It is clear, however, that it takes more than money to reinvigorate a community. Another component to this push for revitalization is to renew demand for the institutions that have been weakened as farms consolidated. The aspiring farmers I know are typically energetic folks who choose to come back to the land, and will greatly add to any community if only they can access the things they need to start farming.

Not coincidentally, I think about this as legislators in Washington, DC are writing the next Farm Bill. There is a lot of debate about the future of the commodity title and the need to increase money for nutrition and conservation, but often rural development seems to be thrown in as an afterthought—as if legislators know that it’s a good thing to say but think there isn’t enough political will to put their money where there mouths are.

Why aren’t rural voices demanding more from their legislators?

There clearly have been some voices, though I would argue not nearly enough. The 2002 Farm Bill included some promising provisions that help rural communities, including the Beginning Farmer and Rancher Development and the Value Added Producer Grant Program (VAPG). The former was in the 2002 Farm Bill but did not receive funding from 2002-2007, while the later usually received between $15 million and $20 million dollars annually, or about one-third to one-half of the money it was slated to receive.

The draft of the 2007 Farm Bill was just released in the House by Chairman Collin Peterson, and while these two programs are funded at $15 million for Beginning Farmer and Rancher and $20 million for VAPG, legislators will need to hear from their constituents in order for these numbers to remain strong.

A welcome addition to the 2007 draft is the Rural Entrepreneurs and Microenterprise Development program, which would provide technical assistance and loans for starting a rural business. However, unlike the other two programs I mention, a slight technical difference in the language for the Microenterprise program means there’s no guarantee it will see a dime.

Rural communities aren’t receiving fair treatment in federal legislation, which is slightly ironic considering that it’s the Farm Bill, and most farming occurs in rural areas. This bill is a great opportunity to push for the rural revitalization that legislators keep promising—not with haphazard handouts but with strategic investments that assist new, resourceful, innovative farmers establish new roots and bring young people back to rural communities.

Why is the League of Rural Voters Shilling for Corporate Interests?

Saturday, July 7th, 2007

The League of Rural Voters is going to bat to support the proposed merger between the only two satellite radio companies - Sirius and XM. I wrote about this puzzling dynamic at some length a few weeks ago. You can read that analysis here.

After I first wrote, the League of Rural Voters issued an additional press release and a report on the merger (pdf).

The report seeks to rebut the argument that the proposed merger between Sirius and XM is similar to the proposed merger between satellite television providers Echostar and DirectTV. The FCC rejected that merger citing concerns over a lack of competition, consumer choice, and diversity of viewpoints in the market. In the latter half of my original post on this topic, I wrote about the rejected Echostar/DirectTV merger and its relation to the proposed Sirius/XM merger.

Quite aware of the argument against their position, the League of Rural Voters wrote the following in their press release:

League Of Rural Voters: SIRUS/XM merger is not ECHOSTAR/DIRECTV

The League of Rural Voters (LRV) today released a new analysis drawing clear differences between the DBS [Direct Broadcast Satellite] market in the 2002 Echostar/DirecTV attempt to merge, and the expanding, competitive audio entertainment market in the SIRIUS/XM merger. In doing so, LRV reaffirmed its support for the proposed merger between SIRIUS Satellite Radio (Nasdaq: SIRI) and XM Satellite Radio (Nasdaq: XMSR).

The press release links to a five page report (pdf) on the League of Rural Voters’ website. The report, with the League’s logo stamped on the front, sets out a point-by-point argument to show how the Sirius/XM merger is “A Fundamentally Different Merger for Rural Consumers” than the proposed Echostar/DirectTV merger was. The report takes up the FCC’s reasons for rejecting the satellite TV merger and offers a brief narrative in response to each to show that “Such concerns do not apply to satellite radio.”

I am not going to do a detailed analysis of the report right now. I will say this though, it certainly does not read like a report that vigorously examines the issue, and then draws a conclusion based on sufficient evidence pointing in one direction. Rather, it summarily dismisses each point from the Echostar/DirectTV case with very little real analysis of the issues at hand. But I want to leave the conclusion of the report aside for now. There are more interesting things going on here.

Of primary interest to me at this point is why the League of Rural Voters cares so much about this issue. The League has published a grand total of of 5 press releases since October of 2006, and two of them have been about their support for the Sirius/XM merger. They only list one other report on their website. This is not a group that runs around issuing press releases and reports on everything under the sun of possible interest to their cause. The League’s support of the proposed satellite radio merger represents a significant part of their work this year.

So, why satellite radio? The question simply baffles me. It is a Farm Bill year, after all. The Farm Bill is arguably the piece of legislation of most interest to rural issues, and it only comes up for debate and changes once every five years. One might think the Farm Bill would be of interest to the League of Rural Voters. However, on their website they have only a “Coming Soon” message on their 2007 Farm Bill page. Why does the League of Rural Voters feel compelled to spend time fighting to allow a merger of Sirius and XM radio, but lack the time to develop even a single page on their website about the 2007 Farm Bill?

But it gets even more interesting.

The LA Times ran an excellent opinion piece on the proposed merger and the role of interest groups in the process. While the whole story is quite interesting, the final paragraph is the kicker for us tonight.

Sirius, XM and American values

Got a big business deal in the works? Start lining up interest groups.

Worried about the proposed merger between the XM and Sirius satellite radio services? So are more than 70 members of Congress, Consumers Union, the Consumer Federation of America and the American Antitrust Institute, among other groups.

The article goes on to discuss this phenomena — whenever regulators are set to make an important and controversial decision, a “swarm of advocacy groups representing a rainbow array of ethnic groups, regional interests and other constituencies” emerge out of the woodwork to comment.

Some of them weigh in on their own accord. For example, Consumers Union and Consumer Federation routinely take positions on mergers involving telecommunications services (and, typically, oppose them). But other groups step up to the microphone at the behest of parties most affected by the government’s action. It’s become part of the game: If you want the Federal Communications Commission (FCC) to bless your merger, as XM and Sirius do, you line up as many grass-roots allies as you can. Your opponents do too.

[snip]

Given the stakes involved, it’s not surprising that the process has been abused. [snip] There’s also the practice of pouring money into supposedly independent research groups, then trotting out studies that, amazingly enough, support their benefactors’ point of view.

[snip]

[Grassroots groups have] also helped XM and Sirius advance an argument that the publicly traded services can’t make themselves: that the two companies are too weak to survive as independent entities.

That’s one of the points made by the Minneapolis-based League of Rural Voters, which joined the debate at the behest of XM and Sirius. It released a report last week that argued the merger was fundamentally different from the proposed merger of satellite TV providers DirecTV and EchoStar, which the FCC unanimously rejected in 2002. Niel Ritchie, the league’s executive director, admitted that “the XM guys did this particular study,” but he said he agreed with its conclusions and was happy to put it out under the league’s banner.

Well now. The League of Rural Voters didn’t find their interest in satellite radio on their own. They entered the debate at the “behest of XM and Sirius.” And that not-so-balanced report (pdf) published by the League of Rural Voters was actually written by the corporate interest under scrutiny for their proposed merger. I double and triple checked. There is nothing in the report that indicates any authorship other than the League of Rural Voters.

I’ll leave it there for tonight. You all can draw your own conclusions from those last pieces of information.

Lies The Economist Told Natasha

Monday, June 11th, 2007

Natasha over at Pacific Views has a great post up on the Economist and the business of agriculture. She starts with a quote from the Economist article:

… This special report will examine how climate change is affecting business, and how business can affect climate change. It will concentrate on industrial emissions rather than on agriculture and deforestation (which produce lots of carbon dioxide without involving business much) but will leave out air travel, on which this newspaper will publish a special report in two weeks’ time.

Then the fun begins for Natasha:

Pardon? Agriculture … doesn’t involve business much? My cranial hamster wheel wobbles on its very axis; it threatens a total derailment. Are these people stupid, lying, deranged, or merely hard toking the hash that’s been flooding Europe since the US invasion of Afghanistan? Maybe they decided to write the preface to this special report during their annual editorial off-site in Amsterdam. I am not qualified to say with certainty which explanation is correct, but as you can see, my suspicions in this regard run towards the lurid.

Read the full post over at Pacific Views. Natasha is right. Agriculture today is increasingly, and in many countries solely, about business.

Natasha offers somewhat regular agriculture commentary. She should write about agriculture more often though.

Satellite Radio Merger: Differing Rural Perspectives

Sunday, June 10th, 2007

A recent press release by the League of Rural Voters left me scratching my head:

League of Rural Voters Adds its Voice and Support for Sirius/XM Satellite Radio Merger
May 31, 2007

SIRIUS/XM SATELLITE RADIO MERGER CRITICAL TO GROWTH AND DEVELOPMENT OF RURAL COMMUNITIES
Minneapolis, MN - The League of Rural Voters urged the Federal Communications Commission (FCC) to approve the merger between XM Radio (Nasdaq: XMSR) and SIRIUS Satellite Radio (Nasdaq: SIRI), noting that the combined entity would offer listeners in rural communities more programming options at lower prices than those currently available from the two companies separately.

“In many rural areas throughout America, commercial radio reception can be extremely limited. Satellite radio has offered listeners in rural areas a robust alternative with hundreds of specialized channels that meet the programming needs of rural America,” said Niel Ritchie, the League’s Executive Director.

Consolidation of the commercial, over-the-air radio industry over the last decade has left much of rural America behind in recent years, as locally-owned stations are replaced with corporate conglomerates producing homogenized content with so-called local news and weather delivered from offices hundreds of miles away.

So, the League of Rural Voters is voicing support for the consolidation of the satellite radio industry to help deal with the negative impacts of consolidation of over-the-air radio stations.

Huh?

Of course, there is the line that you expect to hear from the executives at Sirius and XM. Only it’s right there in the League of Rural Voters press release:

[T]he combined entity would offer listeners in rural communities more programming options at lower prices than those currently available from the two companies separately.

Isn’t that what all companies who want to merge say? This merger will allow us to combine our efforts to bring more (insert product or service) to consumers at a lower cost.

Senator Herb Kohl (D-WI) agrees. On May 23, 2007 Kohl wrote a letter to the Justice Department and Federal Communications Commission urging them to block the proposed merger. Kohl is the chairman of the Senate Judiciary Committee’s Antitrust, Competition Policy and Consumer Rights Subcommittee, which held a hearing earlier this year to examine the XM-Sirius merger. In a letter to regulators, Kohl wrote:

I have concluded this merger, if permitted to proceed, would cause substantial harm to competition and consumers, would be contrary to antitrust law and not in the public interest, and therefore should be blocked by your agencies.

As you know, XM and Sirius are the only two providers of satellite radio service in the United States. If satellite radio is considered to be a distinct market, this merger is to a two to one merger to monopoly and should be forbidden under the antitrust laws. If satellite radio is a separate market, the combined firm will have the ability to raise price to consumers, who will have no choice to accept the price increase. Such a result should be unacceptable under antitrust law and as a matter of communications policy. [snip]

The merger’s proponents, however, argue that new technologies will in the future create competitive alternatives. However, only new entry that is “timely” is properly considered to be a competitive alternative under antitrust analysis. “Timely” means likely to be on the market within the next two years. No new technology satisfies this requirement. [snip]

In addition, the parties concede that, due to the enormous capital expenditure running into billions of dollars for new satellites, as well as the regulatory difficulties in obtaining new spectrum licenses, the parties concede that the entry of a new satellite radio service is unlikely. [snip]

In sum, because this merger will result in a satellite radio monopoly, it will violate section 7 of the Clayton Act which forbids any merger or acquisition when “the effect of such acquisition may be substantially to lessen competition, or tend to create a monopoly.” Elimination of the head-to-head competition currently offered by XM and Sirius leaving only a monopoly satellite radio service will likely result in higher prices and poorer service being offered to consumers. Satellite radio is a unique service for which none of the other audio services is a substitute. Uncertain promises of competition from new technologies tomorrow do not protect consumers from higher prices today. The antitrust laws should not countenance such a dangerous outcome. I therefore urge the Justice Department to bring a legal action to block this merger.

Further, because of the likely harm to competition and consumers, we believe this merger is not in the public interest, and we likewise urge the FCC to deny approval to this merger under the Communications Act. Nor has there any basis demonstrated for the FCC to eliminate its rule — first promulgated when satellite radio was licensed in 1997 — that there be at least two licensees for satellite radio.

I therefore urge that both of your agencies take all necessary actions to deny approval of this merger and prevent the creation of this satellite radio monopoly.

That last point in bold above warrants further explanation. When satellite radio came about in the late 1990s the FCC created two spectrum slots for two independent license holders. The argument used at the time was that two licensees holders in the satellite radio market would provide an “an incentive to diversify programming.”

I want to return to the to the position of the League of Rural Voters though. Unless Sirius and XM are both in danger of imminent and complete collapse, and a merger in particular is the only way to ensure that satellite radio in some form can continue, I don’t really understand the position of the League. Furthermore, I can’t find anyone claiming that such imminent demise awaits either (and certainly not both) Sirius and XM.

The argument that is advanced in the League’s press release is that a merged company will offer more programming options at a lower price. This runs counter, however, to the original intention by the FCC of creating spectrum space for two satellite radio companies to ensure a diversity of programs and a competitive market to keep prices in check.

I don’t think the FCC is likely to forget their reasoning, and I offer their recent rejection of the EchoStar Dish TV and DirectTV merger as a clue to what their opinion of the Siruis and XM merger will be.

The merger would create the largest satellite television company, merging EchoStar’s Dish Network with Hughes’ DirectTV. The companies claimed that the merger would help them compete better with cable and would make it more feasible for them to carry local television broadcasts.

But the FCC rejected these claims. In most urban areas of the country, the number of pay television competitors would drop from three, including the local cable franchise, to two if the merger were approved, the FCC said. And in many rural areas, the combined satellite company would have a monopoly on paid television services.

Having such little competition would actually decrease the incentive for the combined satellite television company to offer local programming, the FCC said.

“Such a loss of competition is likely to harm consumers by eliminating an existing viable competitor in every market; creating the potential for higher prices and lower service quality; and negatively impacting future innovation,” the FCC said in a statement.

A government regulator doing their job to keep corporate powers in check while watching out for the common consumer. How refreshing.

A merger of Sirius and XM would almost certainly guarantee a permanent monopoly in the satellite radio business. Therefore, lacking compelling reasons to think otherwise, I am inclined to err on the side of a competitive marketplace when determining what will be best for consumers.

Farm Labor Movement

Tuesday, May 29th, 2007

The movement for a fair and just agricultural and rural policy and the movement for fair and just labor policy are both close to my heart. For that reason, agricultural labor movements, and the history of the agricultural labor movement is of particular interest. A guest post on Ethicurean last week offers a good primer on the history of the farm labor movement in the context of the current immigration debate.

Quick! The history of U.S. policy on farm labor in 60 seconds. During and after World War II, U.S. workers shift out of farming and into industrial jobs. Agricultural producers mobilize to persuade the government to help find workers. In 1951, Congress passes a law creating the Bracero guestworker program, which allows producers to “import” Mexican workers legally for seasonal jobs and send them home afterward. (Bracero means “farm worker.”) In addition to tying migrants to one employer, Bracero contracts establish standards for housing, pay, and the guarantee of work that are lower than those applied to U.S. workers. The President’s Commission on Migratory Labor provides this assessment of the situation in a 1951 report: “We depend on misfortune to build up our force of migratory workers, and when the supply is low because there is not enough misfortune at home, we rely on misfortune abroad to replenish the supply.”

Honesty in government — a real breath of fresh air, no?

Fast-forward to the 1960s. The Bracero Program has become the focal point for organizing by the United Farm Workers (UFW) union, which charges that it undermines domestic labor conditions and drives down wages industry-wide. The opposition kills the program in 1964, and the farm labor market tightens. The UFW launches campaigns against the use of undocumented workers as strike-breakers and wins concessions for unionized workers requiring rest periods, clean drinking water, and the provision and use of protective clothing during pesticide application. By 1973, the UFW represents 67,000 workers on California farms producing grapes, lettuce, strawberries, and other specialty crops.

But the UFW’s heyday is short. The networks established during the Bracero era between communities in Mexico and the United States are strong, economies in Mexico and Central America are weak, and the rate of undocumented migration surges. UFW wage strikes in the late ’70s and early ‘80s don’t gain many friends among producers, who turn to the growing pool of undocumented workers instead. By 1983, the number of UFW contracts has dropped from a high of 180 to fewer than 20.

In the ’80s, a weakened UFW decides to switch gears and help undocumented workers become legal immigrants so they can join and support the union. They’re stymied by two factors: first, employers use the threat of job termination to keep workers from even talking to the union, and second, when workers do manage to gain legal status, they typically leave the farm sector for better-paying positions in other industries. They’re replaced by newly arrived undocumented migrants — and the UFW is back to where it started.

And that brings us to today.

Read the rest at Ethicurean

Biofuels: Boon or Bust?

Sunday, April 15th, 2007

by Steph Larsen

Biofuels are clearly getting a lot of attention lately, and some speculate that ethanol and biodiesel will bring much needed income and spur revitalization in rural communities. Ethanol might be good for the price of corn at the moment, but it looks like it’s not going to be helping residents of rural America as much as one might think. From the Omaha World Herald:

“The EPA on Thursday substantially relaxed air pollution standards for plants that manufacture ethanol for fuel, eliminating one of the major hurdles to plant size.

“The rule will allow plants to generate two-and-a-half times more of certain types of air pollution before they face regulation. Included are particulates, volatile organic compounds and sulfur dioxide. The change also exempts some emissions from being counted toward the limit.

“Critics condemned the change as unnecessarily increasing the risk to public health. Supporters say the change represents a more balanced, fair approach to regulation that allows industry to take advantage of the economies of scale.”

“Fair” by these new standards means that the people who live near ethanol plants are the ones who may suffer more problems with asthma and other diseases caused by increased air pollution. The rule change came about because plants making ethanol for food or alcohol could pollute 250 tons, while those making ethanol for fuel could pollute 100 tons. With this decision, the EPA is choosing to prioritize the interests of corporate ethanol producers by allowing plants to pollute at the higher level, at the expense of public health and the environment.

It’s true that biofuel companies have the potential to bring income into struggling communities, except that chance for revitalization is lost when those companies choose to relocate to urban centers. From the Des Moines Register:

“Biodiesel company Renewable Energy Group Inc. says it is considering a plan to relocate its corporate headquarters to Ames. ‘The company, now based in Ralston, in Carroll County, plans to relocate to central Iowa as part of plans to grow from its current 70 employees to 300 by 2010,’ said spokeswoman Alicia Clancy.”

“Clancy said Friday that a move would help in the company’s expansion plans, strengthen its ability to recruit workers and improve operational efficiency. Relocating to Ames would put the company closer to research partners at Iowa State University and business partners including the construction and engineering company Todd and Sargent.”

Ralston had a population of 98 in 2000, and estimates projected that number to decrease even further. 230 new jobs would certainly go a long way to encourage growth and attracting new residents to Carroll County, and their business partners in Ames are only 50 miles away, hardly far by Midwestern standards.

Biofuels could be a valuable asset for rural areas, but only if jobs and profits aren’t exported to urban centers. In addition to existing incentives for biofuel production, there should be incentives for local ownership in order to capture the full benefit for struggling communities.

Hillary’s Wal-Mart History

Saturday, April 7th, 2007

Hillary Clinton was in Iowa this week courting rural caucus voters. From the Des Moines Register:

Fort Madison, Ia. - Democratic presidential candidate Hillary Clinton introduced her campaign to rural Iowa Monday… promoting her agenda as the same as small-town America’s.

“There’s a lot we can do, and obviously we need a new goal of revitalizing the rural economies of America,” the New York senator told about 200 southeast Iowans.

I wonder if her plan for revitalizing rural economies involves her old ties to Wal-Mart. Excerpts from a 2000 Village Voice article:

Twice in three days last week, Hillary Rodham Clinton basked in the adulation of cheering union members. Her record of supporting collective bargaining, however, is considerably worse than wobbly.

Pity the thousands of unionists at last Tuesday’s state Democratic convention who chanted her name… They would have dropped their forks if they had heard that Hillary served for six years on the board of the dreaded Wal-Mart, a union-busting behemoth. If they had learned the details of her friendship with Wal-Mart, they might have lost their lunches.

She didn’t mention Wal-Mart… As she was leaving the dais, she ignored a reporter’s question about Wal-Mart, and she ignored it again when she strode by reporters in the hotel lobby.

But there are questions. In 1986, when Hillary was first lady of Arkansas, she was put on the board of Wal-Mart… So what the hell was she doing on the Wal-Mart board? According to press accounts at the time, she was a show horse at the company’s annual meetings when founder Sam Walton bused in cheering throngs to celebrate his non-union empire, which is headquartered in Arkansas, one of the country’s poorest states…

It’s no surprise that Hillary is a strong supporter of free trade with China. Wal-Mart, despite its “Buy American” advertising campaign, is the single largest U.S. importer, and half of its imports come from China…

During her tenure on the board, she presumably helped preside over the most remarkable growth of any company until Bill Gates came along. The number of Wal-Mart employees grew during the ’80s from 21,600 to 279,000, while sales soared from $1.2 billion to $25.8 billion.

And the Clintons depended on Wal-Mart’s largesse not only for Hillary’s regular payments as a board member but for travel expenses on Wal-Mart planes and for heavy campaign contributions to Bill’s campaigns there and nationally…

During the same period, small towns all over America began complaining that Wal-Mart was squeezing out ma-and-pa stores and leaving little burgs throughout the Midwest and South with downtowns that featured little more than empty storefronts…

As part of Hillary Clinton’s gamble with the board of Wal-Mart, she supported trade policies that sent often previously rural-based manufacturing jobs overseas. She had oversight over a company that offers jobs void of health care and other essential benefits.

And perhaps most poignantly, Hillary Clinton played a key role in a company that uses anti-competitive practices to drive small rural businesses under—leaving boarded over windows up and down main street in rural communities across America.

That is no way to revitalize rural America.

Rural Development Goes Urban

Friday, April 6th, 2007

From the Washington Post:

Data Show Rural Money’s Urban Drift
Friday, April 6, 2007

A Washington Post analysis found that the U.S. Department of Agriculture’s Rural Development program sends billions each year to areas that bear little resemblance to the isolated, rural regions where the program started in the 1930s. Over the past five years, for example, the program has funneled more in grants and guaranteed loans to major metropolitan areas of more than 1 million people ($10.9 billion) than it has to distressed rural counties ($8.6 billion).

The analysis was based on more than 150,000 actions reported to the government-wide Federal Assistance Award Data System by Rural Development from 2001 to 2005. The system contained actions totaling $64 billion, about 90 percent of all of the grants, loans and loan guarantees awarded by the three agencies that make up the program.

The Post’s review found that an additional $8.8 billion was funneled to counties classified by the USDA as retirement or resort destinations. For the $42 billion that could be analyzed in more detail, The Post found that about 75 percent was sent to Zip codes within a 45-mile drive of an urban area, as defined by the University of Washington’s Rural Health Research Center.

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