Dorgan and Grassley Letter to Johanns - Where is the Farm Payment Database?

The Honorable Michael Johanns
Secretary
U.S. Department of Agriculture
1400 Independence Ave
Washington, DC 20250

Dear Secretary Johanns:

As you know, Section 1614 of the Farm Security and Rural Investment Act of 2002 requires USDA to “establish procedures to track benefits provided, directly or indirectly, to individuals or entities under titles I and II of the 2002 Farm Bill.” We are becoming increasingly troubled at the continuing delay in creating the Section 1614 farm program payment database.

We wrote to you in November 2005 on this subject and received a response from then-Under Secretary J.B. Penn on January 3, 2006 indicating that the database required by the 2002 Farm Bill was completed. In subsequent discussions, however, it became clear that the project was not in fact complete, but still in progress.

In response to a question submitted to Undersecretary Penn by Senator Dorgan at a hearing of the Agriculture Appropriations Subcommittee in March, Undersecretary Penn responded that, “The database required by Section 1614 of the 2002 Farm Bill will be made available by the Farm Service Agency…in August 2006.” We are now well past August, and the database is still, evidently, not completed. Although there are undoubtedly technical complexities in finishing this database, we are troubled at the delay and the lack of explanation as to its cause.

We appreciate the effort you have put into seeing that the language of Section 1614 is complied with. In order for Congress to make sound policy decisions about the farm payments, access to the best available information is crucial. We urge you to finish work on the database immediately, and we would appreciate an explanation of any outstanding issues that have yet to be resolved.

Sincerely,

Senator Byron Dorgan
Senator Chuck Grassley

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Missouri Attorney General Jay Nixon Should Intervene in Smithfield - PSF Merger

AG Nixon should intervene in Smithfield's purchase of PSF

By Russ Kremer, Missouri Farmers Union President and Osage County farmer

JEFFERSON CITY, MO - Industrial livestock development by meatpacking corporations raising pork has been a controversial issue in rural America for more than a decade. During that time, the vast majority of hog production has moved away from thousands of diversified small-scale family farms and concentrated into the hands of a few corporate owners. This development has been divisive in rural communities, and has devastated independent family farmers who are dependent upon hog production as one of their key income-producing areas of farming.

Here in Missouri, this story began with the rise of Premium Standard Farms (PSF) and its ambitious growth in the Northern part of the state. Bolstered by a last-minute move in the state legislature that allowed it to get around Missouri's anti-corporate farming law, PSF bought land and developed the largest industrial livestock production facilities in the Midwest. Their model of owning the land, the livestock and the meat processing facility completely locked existing farmers out of the system. Their high volume of manure brought serious environmental and public health risks to the surface. Their business operations brought serious bitterness to the communities where PSF operates.

New chapters are added to this sad story every year. Additional industrial hog facilities were built under contract for other meatpackers or their procurement partners in Western and Northeastern Missouri. State laws were passed to provide safeguards and community-based protections over the negative impacts of industrial livestock development. PSF struggled under constant financial turmoil, even declaring bankruptcy. In recent years, state-level safeguards have been under steady assault from industrial livestock promoters at the State Capital in order to spur industrial livestock expansion efforts.

Last week, an entirely new chapter opened in the industrial livestock tale as the world's largest pork producer and pork packer, Smithfield Foods, agreed to purchase the second largest, PSF. If this deal is allowed to proceed, Smithfield will wield a huge amount of marketshare. With PSF's assets in place, Smithfield will own 1.1 million sows out of the approximately 6 million sows in the nation. In addition, Smithfield will move from owning 26% of national pork processing capacity to over 31%.

These figures are shocking to most independent family farmers, and reveal the need for federal action that will mandate fair and competitive markets in agriculture. Poultry is already locked up by Tyson. Cargill controls grain. ADM controls ethanol. Now Smithfield is really the only major player in the pork industry, and they reap large advantages with this kind of market power. Federal policy that bans corporate meatpackers from owning livestock is the surest and simplest way to accomplish fair markets. This issue will certainly come up as we re-write the next federal farm bill over the coming two or three years, and family farmers hope that the Congress will do the right thing and pass the packer ban to restore competitive markets.

But in Missouri, there is also hope for local action that can stop some of the detrimental impacts of the proposed PSF buyout by Smithfield. Way back in the 1970s, in what seems like lifetimes ago in the rapidly changing agricultural marketplace, Missouri legislators had the foresight to outlaw corporate agribusiness from owning and farming land in the state. In 1993, PSF was able to play a political game and get three counties exempted from this state statute. Putnam, Mercer and Sullivan Counties became the home of PSF's production and processing facilities. At the time, this was described as a PSF-only deal designed to improve the economy of these three impoverished rural counties.

It is now time to revisit the three-county exemption from the Missouri corporate farming law. After almost 15 years of this experiment in industrial livestock development, we can see that much of the marketing pitch for this type of agriculture has shown to be full of false promises. Missouri's agricultural future should be based upon the strength of its vast majority of diversified independent family farmers; not a handful of corporate factories where profits flow to corporate boardrooms.

Attorney General Jay Nixon could provide the important backstop needed to slow this deal down and allow a thoughtful, democratic process to play out over such an important issue. Smithfield's approach of gobbling up most of their competitors should concern us all. Let's put them on notice that Missouri is going to stand up to their way of doing business from the very beginning. Smithfield shouldn't have the advantage of skirting Missouri's corporate farming law. Attorney General Nixon could intervene and help to shed some light on this important debate.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Winds of Life: Windmills across Nebraska

Winds of Life: Windmills across Nebraska

By Rhea Landholm, Center for Rural Affairs, rheal@cfra.org

The Center for Rural Affairs recently launched Nebraska’s first ever statewide arts and tourism project. Winds of Life: Windmills across Nebraska invites artists statewide who specialize in any medium to shape their version of a windmill. Prototypes of outdoor windmills will be juried in November, with the best designs gaining a sponsor. Artists will have until May to complete and display the sculptures throughout the state. All pieces will be auctioned off in September 2007.

Outdoor windmill sculptures will be displayed in communities throughout Nebraska from May 2007 through August 2007. Indoor works will be displayed throughout the state at locations that will be announced at a later date. Maps of these displays will be available on the official Winds of Life: Windmills across Nebraska website and at local tourism information sites.

All Nebraska communities, businesses and individuals are invited to participate by financially supporting an artist or by planning their own events around the windmill theme.

Auction proceeds will support rural communities and the work of the artists. Proceeds invested in rural development will be shared by the Center for Rural Affairs and participating communities for activities such as the Women’s Project for Rural America. The goal of the Women’s Project for Rural America is to increase activism and advocacy for rural issues, focusing on rural women, engaging them in a revitalization of rural America.

Windmills were essential to the sustainability of early Nebraska settlement and today remain a symbol of the life and culture they enabled. Today’s new wind turbines towering above those historic monuments capture new winds of life for rural Nebraska.

“Winds of Life is an excellent opportunity for communities to unite through individual projects and fundraisers,” Barbara Chamness, project organizer, said. “I am especially excited about what rural women can do to revitalize life in Nebraska.”

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Child Poverty in Rural U.S.

Child Poverty in Rural United States

The Carsey Institute

On August 29th, the U.S. Census Bureau released new data on child poverty that show a disturbing increase in rural child poverty rates in many states. The child poverty rate is the most widely used indicator of child well-being because poverty is closely linked to undesirable outcomes in areas such as health, education, emotional welfare, and delinquency. Changes in child poverty signal important changes in children’s quality of life and life chances.

Key results include:
• Rural child poverty rates increased between 2000 and 2005 in 41 of the 50 states (data were not available in four states).
• In 18 states, the increase in the rural child poverty rate was higher than the increase in the overall U.S. rural child poverty rates between 2000 and 2005.
• The state with the biggest percentage point increase in rural child poverty between 2000 and 2005 was Maine (+ 7.4 percentage points), followed by North Carolina (+ 6.7 percentage points), and Mississippi (+ 6.1 percentage points).
• Only six states showed a decrease in the rural child poverty rate, lead by Wyoming with a 4.2 percentage point decrease.
• Five states (Maine, North Carolina, Mississippi, Ohio and Indiana) experienced increases of five percentage points or more in the rural child poverty rate between 2000 and 2005.
• The rural child poverty rate in 2005 ranges from a low of just over six percent in Connecticut to a high of nearly 37 percent in Mississippi.
• Five states (Mississippi, Louisiana, New Mexico, Arizona, and Alabama) all had rural child poverty rates above 30 percent in 2005, which reflects the pervasive child poverty in the rural South.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

My Town, My Home

My town. My home.

By Rhea Landholm, rheal@cfra.org, Center for Rural Affairs

“Small town trap with dreams of breaking out.”

These words are sung by the popular band, Eve 6 in their 1998 song, “Small Town Trap.” I agreed completely with this song as the first line is “suffocate from lack of stimulation.”

As a senior in high school, all I could think about was getting out. Small towns definitely were a trap. If I stayed, I was stuck here forever.

Four years later, I am beginning to rethink. There are a lot of benefits to small towns. I would much rather raise kids in an environment where the whole community nurtures your children. I don’t want to worry about a lot of traffic, or a lot of strangers coming through town.

I would much rather start a business in my hometown than in a city. The citizens of my hometown have watched me grow. They know me, they know my work ethic and they would welcome me with open arms.

I also don’t want to see my hometown fail as I’m looking in from the outside. Sure, I could commerce here, but I would love to start a business in one of the empty storefronts that line Main Street.

As Montgomery Gentry says in his 2002 song “My Town,” “Where I was born, where I was raised/Where I keep all my yesterdays… This is my town.”

My town. Where I grew up, where I will settle, where I will raise my kids. My town. Where I know everyone at the grocery store, bank, and post office. My town. My home.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Brother Can You Spare a Dime?

Brother Can You Spare a Dime?

By John Crabtree, johnc@cfra.org

Throughout the summer, there were over 20 congressional farm-bill field hearings. And not one hearing included a substantive discussion of rural development, not one.

Testimony from farmers about farm programs that impact their lives directly is crucial. However, providing no opportunity to discuss rural development provisions of the farm bill means that other rural citizens who have much to offer and much at stake in this debate are not being heard.

Rural development programs have been sidelined in the farm policy debates too often, making rural development programs the last to be funded and first to be cut.

We can do better than this. The Center for Rural Affairs has proposed quadrupling rural entrepreneurial development in the 2007 farm bill – including efforts to foster farm and ranch entrepreneurship and innovation as well as the next generation of family farmers and ranchers. Payment limits that reduce the cost of farm programs by just ten percent would free up in excess of $1 billion to invest in the long term future of rural America.

Moreover, limiting farm-program payments that mega farms use to drive smaller operations out of business would be the single most effective thing Congress could do to strengthen family farms.

Limits that trim just a nickel from the farm program dollar could fund the Center’s rural development proposals and still provide an additional $250 million for investment in bio-energy and broadband telecommunications.

Is a nickel from every farm-program dollar too much to ask for the future of rural America?

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Center for Rural Affairs Offers Testimony on Farm Bill

Chuck Hassebrook, Center for Rural Affairs, chuckh@cfra.org

The next farm bill offers America a choice. We can continue the misplaced federal priorities destroying rural communities, or we can invest in creating a future in rural America.

That was the central message in written testimony submitted by the Center to the U.S. Senate Agriculture Committee. We wrote:

“All Americans have a stake in the outcome. America is strongest when all of its communities are strong and all of its people have access to genuine opportunity. Rural America is a valuable part of America. But rural communities are not sharing in the nation’s prosperity. That hurts all of America.

We can create a better future for rural America and with that enhance the rural contribution to a stronger America. There are proven, practical, local strategies working to revitalize 21st century rural communities. But local initiative must be matched by federal policies that support rural revitalization rather than hinder it.”

Full text of the Center's Testimony to the Senate Ag Committee

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Rural Pharmacies and the New Medicare Plan

One-third of rural pharmacists consider closing under new Medicare plan

from the Rural Blog at the University of Kentucky Institute for Rural Journalism
Rural Blog - http://www.uky.edu/CommInfoStudies/IRJCI/blog.htm

A survey of more than 500 community pharmacists revealed that nearly nine out of 10 (89 percent) are getting less money and a third are considering shutting down since the new Medicare Part D prescription drug plan went into effect January 1st.

"The survey found that more than half (55 percent) of respondents said they have had to obtain outside loans or financing to supplement their pharmacy’s cash flow because of slow reimbursement by health care plans," according to the National Community Pharmacists Association. "

More than two-thirds (67 percent) of those surveyed said their pharmacy was located in an area with a population of less than 50,000 persons, and most (68 percent) said they had been in business for at least 20 years."

“Community pharmacists have been the backbone of the Part D program and are frequently the most accessible—and sometimes the only—health care provider in the community,” said NCPA Executive Vice President and CEO Bruce Roberts. “We need to address the serious problems of low and slow reimbursement in the Medicare Part D program to ensure that these communities will continue to be served by their pharmacists.” (Read more)

A study by the Center for Rural Health Policy Analysis of the Rural Policy Research Institute reported that average monthly premiums for Medicare Advantage prescription drug plans vary from $6 in urban New Hampshire to $53 in rural Hawaii, click here for the study.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Center and GenerationEngage Host Rural Youth iChat

Center for Rural Affairs and GenerationEngage Co-Host Rural iChat

Former Senator Tom Daschle featured in Internet-based video conference

by Dan Owens, dano@cfra.org, Center for Rural Affairs

As many communities across rural America look for strategies to keep their youth from leaving their hometowns and heading for the big city, they have realized the significant role public policy can and should play. Yet the youth who would be most affected by those policies – the very ones we are trying to keep at home – are often not involved in these policy and political debates.

Stereotypes portray rural young adults as unconcerned with political or policy debates, with little to offer. Consequently, they are frequently not engaged on the issues most important to the survival of our rural communities.

But this stereotype is false. Many young adults in rural communities are concerned with remaining in their hometowns and have good, creative ideas on how they can do so. The current political system, though, ignores young adults in rural America.

If politics today focuses on young adults at all, it looks to college students at big schools in big cities or students at expensive private schools. The hardworking student at the local community college or small four-year state college is bypassed, not to mention young adults who are not in school and are already making vital contributions to the rural American economy.

To help fix this problem, the Center for Rural Affairs partnered with Generation Engage, http://www.generationengage.org/, to discuss rural issues with young adults on October 30 at Alexandria Technical College in Alexandria, Minnesota. Utilizing internet-based videoconferencing technology, young adults from around the country were poised to discuss their role in politics and the many issues that affect all of rural America.

At this writing, former Senator Tom Daschle of South Dakota will answer questions during the event, and we expect an interesting and lively discussion. The Center hopes to create more opportunities to engage the young adult population of rural America. We think they will make a valuable contribution to policies that will shape the future of our communities.

Agree? Disagree? Post a comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

What Iowa Farmers Think about the Farm Bill?

by Dick Layman, Iowa News Service

Des Moines, IA – What’s the leading concern of Iowa farmers regarding the 2007 farm bill…that small operations will be gobbled up by mega-farms unless changes are made to the 2007 farm bill.

As Congress considers reauthorization of the farm bill next year, what Iowa farmers want is for lawmakers to care more for the survival of smaller operations and less about the mega-farms. That is the result of a new survey released by the Farm Foundation’s National Public Policy Education Committee. Chuck Hassebrook, Center for Rural Affairs says farmers want the government to close loopholes in the farm bill for mega-farm corporations to get aid meant for small family farmers.

“Farmers felt even more strongly about the need to close those loopholes than their support for farm programs in the first place,” said Hassebrook

Hassebrook says the farm bill was originally conceived to help struggling family farms but that is not the case anymore, profitable mega-farms now get the lion’s share of the funds.

“We now have a farm program that effectively does at least as much to subsidize mega-farms to drive their neighbors out of business as it does to keep the little guys out there,” Hassebrook added.

Iowa farmers rank closing loopholes for mega-farms is the highest priority of all the issues that need to be addressed in the new Farm Bill.

Post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Strong Support for Farm Payment Limits among Farmers

Strong Support for Farm Program Payment Limits among Farmers

Lyons, NE – This morning, the Farm Foundation’s National Public Policy Education Committee (NPPEC), released a survey of 15,000 farmers and ranchers in 27 states regarding policy preferences for the 2007 farm bill. The survey – which can be viewed at http://www.farmfoundation.org/projects/06-02ProducerSurvey.htm – shows clear support among farmers in every region surveyed across the nation for targeting of farm programs to small and mid sized farms and for specific farm program payment limit reforms.

“This survey once again demonstrates that farmers, across the nation, are ahead of their elected representatives on this issue and the organizations that ostensibly represent them. That’s not surprising, since it is family farmers that bear the brunt of federal programs that subsidize mega farms to drive their neighbors out of business. It’s time for elected officials and agricultural organizations to catch up with the farmers they are supposed to represent,” said Chuck Hassebrook, Executive Director of the Center for Rural Affairs.

Among proposals for tightening farm commodity program payment limits, farmers’ strongest support was for eliminating the three-entity rule that allows the creation of multiple legal entities within a larger single farming operation to secure multiple farm program payments; followed closely by farmers’ support for eliminating unlimited commodity loan gains.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Tell Your Congressman - Fix the Farm Bill & Invest in Rural America

Tell Your Congressman: Fix the Farm Bill & Invest in Rural America

August Congressional recess may be the last chance to directly communicate with your representatives before the 2007 farm bill

by Chuck Hassebrook, chuckh@cfra.org, Center for Rural Affairs

Take the opportunity this month to tell your congressman to fix the farm bill and invest in the future of rural America.

The August Congressional recess will likely bring your congressman to your area to hear from constituents. It may be your last chance to share your views directly prior to the 2007 farm bill.

The future of family farming is at stake. Tell your representative we cannot afford one more farm bill that subsidizes mega farms to drive smaller operations out of business. It is destroying family farming and closing the door to beginning farmers. It is driving land rents and prices to levels that leave little margin, making it hard for even established family farmers to make a living.

Ask your representative to stand firm against any farm bill that continues the destruction of family farming through mega payments to mega farms. Say that delivering more dollars to farmers is not the solution. Done wrong, it contributes to the problem. The most effective thing Congress can do to strengthen family farms is to stop subsidizing mega farms to drive their neighbors out of business by capping payments.

The future of our rural communities is at stake. Tell your representative it’s time to invest in the future of rural communities. Practical strategies work in rural America – investing in small scale entrepreneurship and micro enterprise, beginning farmers, value added agriculture, leadership development, and youth engagement enable small communities to determine their destiny. But they are not free.

Don’t fall for the statement that there is no new money for anything. Common sense reforms would make farm programs work better and save money. It starts with more effective payment limitations. Ending direct payments on farmland converted to housing developments would yield additional savings.

Reforms that reduce farm program costs by just 5 percent could fund a half billion dollar per year increase in funding for entrepreneurial rural development – a quadrupling of current funding levels – plus provide a quarter billion dollars to invest in bio energy, high-speed Internet service, and other rural priorities.

The future of the land is at stake. Tell your representative to reward farmers who practice good stewardship through the Conservation Security Program. For too long, many of the best stewards have been penalized by federal farm policy.

These practical reforms are possible with determined leadership. Each of us must fulfill our responsibilities as citizens to engage with elected officials in fixing what is broken. Our elected officials must have some backbone. Tell those who would represent you that it’s time to stand up. The future of rural America is at stake. It’s not time to look for the easy and safest path.It is time to take control of our destiny.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

USDA Programs Lack Benefit for Small Farms and Ranches

USDA Research and Grant Programs Lack Benefit for Small and Mid Sized Farms and Ranches

The Center for Rural Affairs released a report today, entitled The Impact and Benefits of USDA Research and Grant Programs to Enhance Mid-size Farm Profitability and Rural Community Success. The report analyzes the benefits to small and mid sized farms and ranches of four mainstay USDA research and rural development grant programs – the Value Added Producer Grant program (VAPG); Rural Business and Enterprise Grant program (RBEG); National Research Initiative (NRI); and Initiative for Future Agriculture and Food Systems (IFAFS).

“Our analysis revealed that, in total, of nearly $500 million dedicated to these four programs, only five percent went to projects determined to be beneficial to small and mid sized farmers and ranchers or beginning farmers and ranchers,” reported Kim Leval of the Center for Rural Affairs.

The Center for Rural Affairs’ report identified the Value Added Producer Grants (VAPG) and IFAFS as the two programs, among the four analyzed, that offered the most benefits to small and mid sized producers as well as beginning farmers and ranchers. “Which is understandable, because value added grants and IFAFS came into being shortly after the National Commission on Small Farms recommended the creation of such programs to assist small and mid sized farmers and ranchers in creating new markets and economic opportunities,” added Leval.

Consequently, the Center for Rural Affairs recommends in the report that the Value Added Producer Grant program be reauthorized in the 2007 farm bill and provided with $50 million annually in mandatory funding.

The report goes on, however, to state that “despite recommendations and challenges of the National Commission on Small Farms and the rhetorical commitment of USDA to small agricultural operations, we found that the vast amount of funded projects and program funds do not benefit small and mid sized and beginning farmers and ranchers and are not relevant to their needs.”

For a full copy of the report and recommendations see http://www.cfra.org/pdf/Leopold_Report_Final.pdf

“The NRI, intended to foster research to address national food, fiber and natural resource challenges, has failed to invest in research that helps develop economic opportunities that will keep families on the land,” said Leval. “And RBEG, aimed at rural small and emerging business development, also failed to make the grade.”

The Center for Rural Affairs’ report also points out that all four projects were generally lacking in projects benefiting beginning farmers and ranchers. “Given the demographics of agriculture in America – with only 70,000 farmers and ranchers under the age of 35 as opposed to 350,000 just 25 years ago – the inability of major USDA research and grant programs to address the topic of beginning farmers and ranchers is disappointing,” Leval concluded.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Center to Discuss Rural Development in Minnesota

Center for Rural Affairs to Discuss Rural Development in the 2007 Farm Bill

Kathie Starkweather and Dan Owens, Policy Organizers for the Center for Rural Affairs, will be featured at roundtable discussions on rural development in the 2007 farm bill October 10-12 in Marshall, Bertha and Bemidji, Minnesota. The meetings are hosted by the Minnesota Rural Partners, Northern Great Plains, Inc., and the Center for Rural Affairs.

Starkweather and Owens will discuss the Center for Rural Affairs’ 2007 farm bill proposals which will increase investment in and provide strong support for the development of genuine and sustainable rural economic opportunity in America. The Center’s rural development proposals for the 2007 farm bill focus on entrepreneurial development in rural areas; strategies to build assets and wealth for rural people and in rural communities; beginning farmers and ranchers; and entrepreneurial opportunities for farmer and ranchers through producer owned value added enterprises.

The Center for Rural Affairs is asking for input from local organizations and individuals so that the 2007 farm bill will ensure that all rural Americans have access to genuine economic opportunity and the chance to contribute to their rural communities.

Media packets, including copies of the Center for Rural Affairs’ rural development proposals for the 2007 farm bill will be available at each event. For background information on the Center for Rural Affairs go to – http://www.cfra.org/.

Location – Marshall-Lyon County Library, 301 W Lyon St., Marshall, MN
Date - Tuesday, October 10, 2006 10 a.m.--2 p.m.

Location – Bertha Community Center, Main Street
Date – Wednesday, October 11, 2006 10 a.m.—2 p.m.

Location – Beltrami Electric Company, 4111 Technology Drive NW
Date – Thursday, October 12, 2006 10 a.m.--2 p.m.

To arrange interviews or other media needs, contact John Crabtree, 402-687-2103 ext. 1010

USDA's Perspective on Rural Development in Farm Bill

USDA Gives its Perspective on Rural Development in the Farm Bill

by Chuck Hassebrook, chuckh@cfra.org, Executive Director

The U.S. Department of Agriculture has released a briefing paper on rural development issues in the farm bill. It sets the context and raises some important issues, though it glosses over the importance of small scale entrepreneurship in revitalizing rural communities.

USDA data tells a story. Rural incomes are less than three-fourths of metropolitan incomes. One in five rural counties continues to rely heavily on farming, most in the Great Plains. Just over one-fifth of these counties grew in population since 2000. Rural manufacturing employment declined, though it appears to have stabilized in the last few years.

Among all rural areas, population has grown since 2000. Over half of the rural growth came from a 15 percent increase among Hispanics. In addition, rural recreation counties located near mountains, lakes, beaches, and other natural amenities had rapid growth in employment, income levels, earnings, and other measures of socioeconomic well-being.

USDA’s briefing paper presents three options for the farm bill debate.
1. Target rural development programs to areas of greatest need and areas that won’t gain critical services without assistance. For example, Rural Utility Service loans do not always go to rural areas and are not targeted according to need. Likewise, the low interest loan program for rural high speed Internet has shifted away from those communities that won’t get high speed service without government assistance. And USDA has allowed it to be used in suburban areas, contrary to law.
2. Focus on new non-farm business formation with rural private investment. While small business and micro lending would continue to have a role under this option, USDA would focus on getting equity capital to entrepreneurs – identifying, aggregating, and assisting many small individual investors to finance critical investments. Entrepreneurs would be brought together with rural communities, banks, potential individual rural investors, and non rural investors to create mechanisms to use rural wealth to create more wealth.
3. Move toward regionalized assistance. Federal policy has already moved in this direction. The Delta Regional Authority (DRA) was created in 2001 to fund projects in the lower Mississippi Delta region based on priorities set by the governors. Assistance goes to local multi-county development organizations which plan and implement the projects. The 2002 farm bill authorized three new regional initiatives, including the Northern Plains Regional Authority, but funding was never released.

We urge USDA to place greater emphasis on supporting small and microbusiness development, assisting small communities in developing their capacity to determine their own destiny, and helping ordinary rural people build assets.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Study Says Rural Nebraska Continues to Lose Population

LINCOLN (Associate Press) - A new report from The Center for Public Affairs confirms that many of Nebraska's towns are shrinking and the rural population is aging. Population analysts based at the University of Nebraska at Omaha produced the report.

The study found about half of all counties in the state now have higher death rates than birth rates, and in the state's most rural counties, 21 percent of the population is older than 65. The combined population of three counties - Lancaster, Douglas and Sarpy - now exceeds the population in the rest of the state, the analysts said.

Jerry Deichert, director of the research center, said the growing elderly population combined with the lower birth rates will "be putting a lot of pressure on some of those areas." The problem is the younger population isn't there to support the older population, Deichert said.

Richardson County had a net loss of 448 people between April 2000 and July 2005. Valerie Buckminster, administrator of the 119-bed Falls City Care Center, isnt surprised. "I think the population of Falls City itself over the last five to 10 years has taken a decline," Buckminster said. "We just recently lost a couple of factories that have closed down and moved elsewhere. Its rough times for us."

As of Tuesday, 66 jobs will be moving to India by Ames True Temper, maker of hammers and other striking tools. Falls City residents Bart Keller and Gail Gerlt remain upbeat. Keller, owner-manager of Farm and City Supply, is involved in the Greater Falls City Economic Development and Growth Enterprise. He points to a new library, new aquatic park and school renovations as reasons for optimism. "I think we really do have some good times ahead of us," Keller said.

Gerlt, a member of the Falls City High School class of 1958 who recently moved from California, has joined a Come On Home Campaign that uses the power of persuasion to reach other people who ready to retire. "I feel retirement people who are coming back here have made their money. We're not taking anybody's jobs," Gerlt said. "So we're paying full taxes and we're able to pick up on some of the houses and stuff that are available here."

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Assets vs Needs in Rural Development

Assets versus Needs in Rural Economic and Community Development

Uncover talents and skills within and build interdependencies or identify what is weak or missing and look outside for the solutions

by Michael L. Holton, michaellh@cfra.org

Much of traditional economic and community development in small rural communities has been based on needs rather than assets. Understanding the difference plays a pivotal role.

Needs assessment looks at what we have and what it should be. There’s nothing wrong with this, except it might be putting the cart before the horse. Starting with a needs assessment says to a community and its residents that they are fundamentally lacking and deficient. It makes us look for resources to address the need, making us consumers. This can create a sense of dependency.

Asset-based development relies on uncovering talents and skills found in the community right now. It is an internal model that focuses on effectiveness and builds interdependencies rather than dependencies. Asset-based development seeks to empower people rather than create a second class of citizens who seek answers through agencies outside of the community.

The question I am asked most often is why needs assessments are bad. They aren’t. We all have needs to address. People and communities do have deficiencies, but people and communities also have skills and untapped talent.

Community decisions are often made through a pyramid-shaped process that allows a top person or persons to make decisions and disseminate them to the general population. No interdependencies exist in this way of thinking. A preferred shape is that of intertwined circles, where relationships with each other are used in decision making.

We are involved with a community development project in Knox County, Nebraska. The strategy is to first identify the assets of the nine communities in the county. Once the identification of assets has been secured, both internally and externally, then the mapping process can begin. By developing an inventory of the assets, we will then be able to create a database of skills and talents that had previously gone untapped.

Is there a place for outside resources? Absolutely! Once assets have been identified, it is possible to then address needs in a productive manner. In this way we are hooking the cart to the horse to begin mobilizing rural communities for their future.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Hispanic Rural Business Center Finishes Second Year

Hispanic-Rural Business Center Finishes Second Year of Operation

Outreach to Nebraska’s rural Hispanic entrepreneurs increased four-fold in the Center’s small business development program

The Center’s Rural Enterprise Assistance Project recently completed its second year operating the REAP Hispanic-Rural Business Center. The Hispanic business center focused on four Nebraska communities during phase two: Schuyler, South Sioux City, Crete, and Madison. We anticipated phase two would impact 25 Hispanic startup and existing entrepreneurs, but the impact was actually much greater.

Highlights of the year included:
Over 100 Hispanic entrepreneurs received substantial technical assistance or training from REAP staff during the project year.
All of the pilot communities formed REAP Rural Business Roundtable groups that will provide a vehicle for continued training and networking.

All of the communities completed the five-session REAP Basic Business Training course in Spanish.

Business owners expressed gratitude for having access to services in their own language. Martha Martinez of South Sioux City said, “It meant a lot to have a program with a reputation as good as REAP’s supporting you within your needs in my own language.”

REAP Business Specialist Adriana Dungan implemented the Hispanic work in northeast Nebraska. Adriana noted, “It was nice getting a lot of response from business owners and the public in general; it speaks volumes of the need to have Spanish services.”

The pilot communities were chosen due to their high population rate of Hispanics. According to the 2000 U.S. Bureau of the Census, Schuyler (located in Colfax County) has a population of 5,371, with an Hispanic population of 2,464 or 45.9 percent of Schuyler’s overall population base. Crete (located in Saline County) has a population of 5,989, with an Hispanic population of 828 or 13.7 percent of Crete’s overall population base.

South Sioux City (located in Dakota County) has a population of 11,925, with an Hispanic population of 2,976 or 25 percent of South Sioux City’s overall population base. Madison (located in Madison County) has a population of 2,369, with an Hispanic population of 825 or 34.8 percent of Madison’s overall population base.

REAP has applied for funding to further expand outreach to Hispanic entrepreneurs. If approved, phase three will include piloting the REAP Hispanic-Rural Business Center approach on a regional basis in northeast Nebraska. At the same time, we will continue to research, develop, and build strategic partners to provide comprehensive New American services across all of rural Nebraska.

Funding for our work on phase two was provided by a Rural Business Enterprise Grant (RBEG) from USDA, the Mammel Foundation, the Nebraska Microenterprise Partnership Fund through the Nebraska Microenterprise Development Act, the Small Business Administration Microloan Program, and the Community Development Block Grant program through the Nebraska Department of Economic Development.

Jeff Reynolds, Center for Rural Affairs, jeffr@alltel.net or 402.656.3091

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Universal Health Care Recommended

Universal Health Care Recommended

by John Crabtree, johnc@cfra.org

The Citizens’ Health Care Working Group, an independent committee established by Congress in the 2003 Medicare Modernization Act, recently released “Health Care that Works for All Americans.” The report and its recommendations are based on months of meetings across the nation, data and policy recommendations from health care experts, and 5,000 individual commentaries on health care related issues.

Members of the committee were appointed by the Comptroller of the United States and represent a cross-section of heath care providers, consumers, and benefit providers.
The committee found a health care system it describes as “unintelligible to most people” and that is “disconnected from the mission of providing people with humane, respectful, and technically excellent health care” and as a result made the following recommendations:

>> All Americans should have affordable health care, with access to a “set of core health care services” and financial assistance to those who need it.>> Defining a “core benefit package” for all Americans.

>> Guaranteed financial protection against very high health care costs through a national program that ensures universal health care coverage and financial protection for low-income Americans and against very high out-of-pocket costs.

>> Support of community health provider networks for health care services in underserved areas and for vulnerable populations, including rural areas and rural residents.

>> Promote efforts to improve quality of care and efficiency to lower costs.

The public has until August 31, 2006, to comment on the report. The President then has an opportunity to review and add his comments. Five committees in Congress will subsequently hold hearings. This report and its recommendations have the potential to profoundly reform and shape the American health care system. That makes public comment vital.

Review entire report and submit comments online at http://www.citizenshealthcare.gov/ or by mail at Citizens’ Health Care Working Group, Interim Recommendations, 7201 Wisconsin Avenue, Suite 575, Bethesda, MD 20814.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Smithfield Merger: Enough is Enough

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Enough is Enough

by John Crabtree, Center for Rural Affairs, johnc@cfra.org

Smithfield Foods, the nation’s largest pork producer and packer, recently announced that they intend to acquire Premium Standard Farms, the nation’s number two pork producer and number six packer.

According to Successful Farming, Smithfield owns 800,000 sows and Premium Standard owns 221,000, bringing Smithfield’s holdings to over one million sows, at least 20% of U.S. hog production, and 31% of U.S. pork packing. And they will own over 50% of all the hogs they slaughter each year. In a world where packers own all the pigs and cattle, what need is there for farmers and ranchers, or, for that matter, rural communities?

Smithfield wants to own the sows, the pigs, the processing and the label. Smithfield wants farmers to borrow money to build the confinements, accept all the risk, spread the manure, and that’s all.

The regulators at the Justice Department and Packers and Stockyards Administration should put down their invitations to the ribbon cutting ceremony for the new Smithfield sign at Premium Standard Farms and reject this merger. That’s harsh, I suppose, but remember, this is the same Packers and Stockyards Administration that lied to farmers, ranchers and Congress by claiming to have conducted 1,739 investigations into potential violations of the Packers and Stockyards Act, investigations later revealed as a sham intended to convince everyone that they were doing their jobs.

Congress should prohibit packer ownership of livestock and price discrimination against small and mid sized farmers and ranchers. Enough is enough, and Smithfield has taken too much.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Smithfield Foods Acquires Premium Standard Farms

Smithfield merges with PSF

By Randy Mudgett, Managing Editor, Farm News – Fort Dodge Messenger

Total vertical integration has long been the goal and business structure that Smithfield Foods has followed, and now, Smithfield owns more than 1.2 million sows, clearly solidifying the company’s hold on the pork industry.

On Monday, Smithfield announced plans to merge with Premium Standard Farms Inc., the nation’s second largest pork producer and sixth largest pork processor. Smithfield, who is No. 1 in both categories, said the deal will cost the company $674 million in stock plus assuming $117 million of Premium Standard Farms debt load.

John Crabtree, a spokesman for the Center for Rural Affairs in Walthill, Neb., said Monday this is the most significant move by Smithfield in recent years. After an attempt to purchase IBP failed in 2001, Smithfield has since acquired several processors including Farmland Foods and John Morrell plus acquiring a good portion of ConAgra Foods branded meat business and overseas investments including the Sara Lee Corporation European meats business.

“Smithfield has been clear on this from the beginning,” Crabtree said of the packing giant. “They want to own the sows, the baby pigs, the feeders, the processing and the label,” Crabtree said. “They’ve done it and this should be a red flag to our leaders.”

Iowa Sen. Tom Harkin said Monday the merger should be closely scrutinized by the U.S. Department of Justice. “The merger involves a very substantial change in the structure, vertical integration and degree of consolidation in the U.S. pork industry,” Harkin said. “It obviously will have significant impacts on both independent hog producers and those who raise hogs under contract.”

In the last round of farm policy talks, the Senate pushed for a packer ban on ownership of livestock and while the language did not make it into the final 2002 farm bill, Crabtree said it was a significant first step in getting hogs, chickens and cattle back into the hands of America’s livestock producers.

"The only real solution to getting livestock ownership back into the hands of producers is to pass meaningful packer ownership laws,” Crabtree said. “Pork production has often been viewed as the mortgage lifter and a huge part of the family farm system. Now, corporations like Smithfield own the sows and the only role for the farmer is to build a building, accept the risk and spread the manure for the packers.”

Iowa Sen. Charles Grassley told ag reporters Tuesday he was concerned about the proposed merger. “We have to maintain plenty of competition, particularly for the small independent producers and family farmers for them to survive. This is of great concern to Iowa,” Grassley said. “I cannot fathom how Smithfield, the largest and fastest growing integrator, can continue to be allowed to purchase hog operations all across the country. They have made it clear that they intended to purchase its competitors to assert dominance in the pork industry. The attitude is alarming so we should ban packer ownership of livestock and eliminate mandatory arbitration.”

The Wal-Mart effect

If the merger is approved by the Department of Justice, Smithfield will own more sows than the remaining other eight top pork producers in the nation. According to Successful Farming’s Pork Powerhouses 2006 list, Smithfield would own 1.2 million sows after acquiring Premium Standard with nearly one-half of PSF’s sows located in Missouri.

Besides playing the role of the largest pork producer and processor in the world, Smithfield has also made inroads into the beef and turkey industries in recent years. The company is now the fifth largest beef packer and third largest turkey processor.

Roger McEowen, Iowa State University Extension economist, said much of the problem that is leading to companies desiring a vertical integration system is related to the race to the bottom for food prices.

“Looking long term, a vertically integrated system in the livestock sector relates to a loss of independence for the family farmer,” McEowen said. “Producers lose their portion of the open market system because corporations are experiencing the Wal-Mart effect.”

McEowen said the “Wal-Mart Effect” or a system that requires buyers to buy ever-increasing numbers in order to maintain efficiency, is forcing companies like Smithfield to become more and more efficient. In turn, companies like Wal-Mart desire to purchase products in bulk at cheap prices with a quick turnover and quick profit.

“You have to be big to get your product in stores like Albertsons or Wal-Mart,” McEowen said. “These big retailers charge slotting fees just to allow a processor to sell the product at their store. They have such buying power strength, the system forces companies to cut costs and vertical integration helps cut those costs.”

McEowen said the current political structure does not lend itself to pushing for a ban on packers owning livestock. “If our society desires a change and wants to see small farming return, then it could happen,” McEowen said. “But, right now, and even if the Democrats took control of Congress, I still do not foresee a change in thinking when it comes to ending the vertically integrated systems that are now commonplace.”

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

Congress' October Homecoming

Congress’ October Homecoming

By John Crabtree, Center for Rural Affairs, johnc@cfra.org

As September came to a close, so did the 109th session of Congress. Neither the Senate nor the House of Representatives will meet again until after the November 7th election. During October, most Senators and Representatives, and their opponents, will travel their states and districts meeting with voters and discussing past, present and future issues.

This presents an opportunity for farmers, ranchers and rural people to discuss the future of our rural communities, face to face, with the men and women that will make many decisions in the next two years that directly impact our lives and our communities.

If we expect our elected officials to remember us and our communities, then we need to tell them our stories. And we need to discuss not only the challenges that our communities face, but real solutions as well.

Take the time to meet with your Senators, Representative and challengers. Let them know that there are solutions to the stern challenges faced by our rural communities. Ask Congress to focus the 2007 farm bill on real solutions – beginning farmers and ranchers; conservation on working lands; value added agricultural development; and rural entrepreneurship.

And let them know that they can revitalize family farming by limiting the subsidies that mega farms use to bid up land costs and drive their smaller neighbors out of business. Moreover, farm payment limits will save money that can be invested in the future of rural America.

Read the Center for Rural Affairs’ 2007 farm bill proposals at http://www.cfra.org/.