Packer Owned Livestock Depress Prices

The Organization for Competitive Markets said a new USDA report confirms that packer owned livestock, in conjunction with long term contracts, push cattle and hog prices lower than competitive prices. At a cost of $4.5 million in taxpayer money, the study added very little new information to the captive supply debate and suffered many fundamental problems.

“In 2002, meat packers and members of Congress opposed to pro-competition measures requested this study as a diversion from real legislative action during the last Farm Bill debate,” said Keith Mudd, OCM President. “The authors either had no experience in antitrust economics, or were previously on record supporting packers' opposition to fair markets. Despite these flaws, the inescapable conclusion was that captive supplies drive livestock prices lower.”

“Captive supplies” are cattle and hog supplies that are committed to a packer more than 14 days in advance of slaughter because a packer owns the livestock or has them under contract. The livestock are moved outside the open (cash) market process in which negotiations determine the prices which are then reported to the public. Most credible studies have found that captive supplies lower prices, and consumers do not benefit.

USDA commissioned this report on livestock marketing in 2003. In the process, USDA rejected calls to focus on how packers manipulate prices through captive supply practices. Nevertheless, the study could not avoid this finding:

“The use of [captive supplies] is associated with lower cash market prices... .”

“Some of the authors of this report have longstanding, documented political bias against pro-competition rules,” continued Mudd. “Stephen Koontz of Colorado State University ridiculed criticism of captive supplies’ price effects in a 2002 BEEF magazine article entitled ‘Captive Supply Witch Hunt’.”

Koontz successfully lobbied to be on the team conducting this USDA study, as shown in his written comments submitted to USDA during the time period the study was being designed. He wrote the USDA, in June 2003:

“I would like to communicate that I would like to be involved in the proposal review process and that I intend – with a group of other agricultural economists – to submit a proposal or be part of a larger proposal.” …

“Lastly, I have heard indirectly a number of very troublesome statements attributed to government personnel with respect to the integrity of Land Grant University economists – that we are unscientific and unethical.”

Another author of the recent USDA report is John Lawrence of Iowa State University, who operates an institute receiving funding from beef checkoff dollars controlled by the anti-market competition group, National Cattlemens Beef Association. Lawrence has a record of attempting to prevent legislation to improve livestock markets. On January 14, 2002, Lawrence and Koontz and other Land Grant academics released a political report attacking legislation introduced by Senator Tim Johnson (D. SD) that would have restricted some captive supplies.
They collaborated with Ted Schroeder of Kansas State University, an expert witness hired by Tyson in captive supply litigation.

“The authors' bias was further revealed in an interim report to USDA during this $4.5 million taxpayer funded project, in which they documented ‘industry consultations’ with only special interest groups who oppose pro-competition reform,” said Mudd. “Organizations that favor competition were shut out of the process. The scientific method is supposed to be a search for the truth, but these authors let their pre-conceived opinions drive their conclusions.”

The authors completely omitted reference to a February 2004 jury verdict finding Tyson used captive supplies to manipulate cattle prices. They could have sought actual cattle transaction information, and viewed sworn testimony from scores of depositions and weeks of trial. They chose to ignore that information.

“The USDA report chose to exclude longstanding economic analysis designed to discover price manipulation,” said Mudd. “The industrial organization subspecialty of economics uses analytical tools to determine price impacts from large company conduct. USDA chose to exclude industrial organization economists from the study. This report will have very little impact on the pro-competition debate.”

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

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Battle in Congress Over Packing Contracts

Battle set in Congress over packing contracts

Such deals reduce prices paid to farmers, a new study reports

By PHILIP BRASHER REGISTER WASHINGTON BUREAU

Washington, D.C. - When Iowa hog producer Max Schmidt signed a three-year contract with a big meatpacker he knew he was taking a risk that he might not make as much money as he could selling pigs the old-fashioned way - on the spot market.

He sure didn't. Schmidt, who kept meticulous records of what he was paid under the contract vs. what prices were on the spot market, calculates that he lost a full $1 million on the deal. "We left a pile of money there," he said.

To Schmidt, that's the way business works. But critics of the meatpacking industry said processors are unfairly driving down the prices paid to farmers by increasing their control of livestock supplies through contracting and outright ownership of the animals.

Iowa's senators - Democrat Tom Harkin, chairman of the Senate Agriculture Committee, and Republican Charles Grassley - will lead an effort in Congress this year to impose a series of marketing restrictions on packers, including a ban on their ownership of livestock supplies.

Other measures would allow producers to challenge contracts in court and require the U.S. Department of Agriculture to set up an office to investigate allegations of anti-competitive actions by processors and other agribusinesses.

A new study that was required by Congress says that meatpackers' use of contracts and ownership of livestock reduces the prices that producers are paid for livestock, including hogs...

Packers "put their thumb on the farmer and see the family farmer as an employee of theirs, kind of an indentured servant of theirs," Grassley said. "They want to control everything.

"In addition to the ban on packer ownership of livestock, the senators want to stop processors from imposing arbitration clauses on contract producers. Requiring arbitration prevents farmers from taking packers to court over contracts.

Grassley said the ban on packer ownership has a good chance of passing the Senate, as it did in 2002, but faces an uncertain future in the House. Meatpackers argue that the legislation could even outlaw contracts between processors and farms, a claim disputed by lawmakers and legal analysts at Iowa State University...

... Read the full article at...
http://desmoinesregister.com/apps/pbcs.dll/section?category=BUSINESS01

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Harkin Bill Calls for Competition in Ag Markets

Senator Tom Harkin (D-IA) this week introduced legislation to correct deficiencies in USDA’s enforcement over agricultural markets and provide needed protections for producers involved in production contracts for agricultural commodities. The Competitive and Fair Agricultural Markets Act will be the basis for the development of a proposed competition title in the upcoming farm bill. Harkin is Chairman of the Senate Committee on Agriculture, Nutrition and Forestry.

“Producers need to have a fighting chance in an industry that is becoming far too consolidated and vertically integrated,” Harkin said. “I will propose and seek to include this legislation as part of a competition title in the farm bill.”

Last year, USDA’s Inspector General released a report commissioned by Harkin that detailed widespread inaction, the blocking of anti-competitive investigations, and efforts to cover up the lack of action by the Grain Inspection, Packers and Stockyards Administration (GIPSA). A hearing Harkin called to evaluate GIPSA’s enforcement dysfunctions also uncovered the lack of commitment towards preventing anti-competitive practices by USDA’s Office of General Counsel.

“If you take these facts together, it represents a complete lack of enforcement of the Packers and Stockyards Act passed by Congress in 1921, to protect producers from unfair, deceptive and anti-competitive practices in the marketplace,” Harkin said. “If we want to get serious about getting young people into agriculture, creating a fair and evenhanded marketplace is an obvious place to start.”

The Competitive and Fair Agricultural Markets Act would:

Reorganize USDA to streamline and improve enforcement of the Packers and Stockyards Act and Agricultural Fair Practices Act by establishing an Office of Special Counsel whose sole responsibility will be to investigate and prosecute violations on competition matters. The Special Counsel would be appointed by the President and confirmed by the Senate. This position will also serve as a liaison between the Department of Justice and Federal Trade Commission.

The legislation also amends the Packers and Stockyards Act:

Strengthens producer protections by making it easier for them to prove unfair actions by firms without additional burdens of having to prove adverse effects on competition across a region or sector and requires USDA to define the term "undue preference" - disallowing price premiums that are based solely on volume, or number of head, thereby discriminating agains smaller producers.

The bill also makes changes to the Agricultural Fair Practices Act...
...prohibiting unfair, unjustly discriminatory, anti-competitive or deceptive practices by a person that affects the marketing, receiving, purchasing, sale or contracting of crops... and provides needed contract protections to ensure that the production contract clearly spells out what is required of the producer... and prevents discrimination against producers belonging to an organization or cooperative...

How About Some Help Here?

by John Crabtree, johnc@cfra.org

Senator Tom Harkin (D-IA) is preparing to introduce legislation to foster competition in livestock markets that serve family farmers and ranchers. The bill is intended to lay the foundation for a competition title in the 2007 farm bill. Unfortunately, there is no stampede of Senators beating a path to Senator Harkin’s door to co-sponsor the bill, despite the fact that during the election cycle they made a lot of hay with rhetoric about “standing up for family farmers and ranchers.”

Let us give credit where credit is due, however. Senator Max Baucus (D-MT) quickly became a co-sponsor of Senator Harkin’s competition bill. And Senator Chuck Grassley (R-IA) has announced his intent to reintroduce legislation banning meatpacker ownership of livestock.

Senator Harkin’s bill calls for fair treatment of producers who labor under contracts with packers and processors; seeks to define what constitutes an undue price preference when packers deal unfairly with small and mid sized farmers and ranchers; and establishes a special counsel’s office for enforcement of competition policy within USDA. Anyone who cannot muster the political will to support these provisions should not claim that they stand with family farmers and ranchers.

The American Meat Institute and the National Cattlemen’s Beef Association are exerting pressure on Congress to oppose these reforms. But recently the Center for Rural Affairs joined 211 farm, faith and rural organizations in calling for a competition title, with these provisions, in the farm bill.

Family farm and ranch livestock production has been decimated in the five years that have passed since a conference committee tossed aside the hard fought competition reforms that were won on the Senate floor in 2002. Without action now, there will be far fewer farmers and ranchers to fight for in another five years.

Senators and Representatives whose voices are yet unheard on these issues, a vast majority, must steel their resolve and offer much needed leadership. Both Senator Harkin’s and Senator Grassley’s bills need and deserve broad, bipartisan co-sponsorship and support.

Each of us bears the responsibility of urging our Senators and Representatives to lead the debate, publicly, instead of following the herd. If enough of us demand that they stand with rural America, demand the leadership they promised in their campaigns, we will not lose. Time is of the essence, but every day that we stand, undaunted, brings us closer to victory.

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

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Ranch Steakhouse Drops Natural Beef

Partners split over dropping products free of hormones, antibiotics

by Jim Bainbridge, Colorad Springs Gazette

Mike Callicrate, the face of the Ranch Steakhouse and Market since it opened in October 2005, has sold his minority partnership in the restaurant because of a disagreement over how the business should be run. Ranch Steakhouse was started as a showcase for the no-hormone, no-antibiotic brand of meats sold by Callicrate’s Ranch Foods Direct Co., and while it developed a loyal following — sales of $2.5 million last year — majority owner Neil McMurry wanted to try a new direction. McMurry is buying his meats from industry giant Iowa Beef Processors (IBP), a division of Tyson Foods.

“My partner and I didn’t agree on the concept for the restaurant,” Callicrate said. “Essentially, he owned the building and I was unwilling to compromise on our company’s pledge and purpose, so the relationship has ended.” The last meals with Ranch Foods Direct meat were served on Valentine’s Day, and the Ranch Food Direct market just inside the front entrance at 575 Garden of the Gods Road closed Thursday, soon to be replaced by a bar.

The restaurant will undergo a name change — it may be announced as early as today, according to manager Steve Abeyta — and has placed notices on each table letting customers know about the change of meat providers. “I can’t tell you what it felt like to walk into the cooler at the restaurant and see IBP beef there,” Callicrate said. “These are the people I’ve been fighting for years.”

Callicrate, 55, was the lead plaintiff in a class-action antitrust lawsuit against Tyson Foods-IBP a decade ago — the first such challenge to a major meatpacker since 1921 — and has been an ardent opponent of big agribusiness all of his career. Callicrate said he attempted to buy the majority interest in the restaurant, but that McMurry, 83, “was not willing to work with me. It is a very big disappointment. I put a lot of money into the business, not to mention time and effort.” McMurry was not available for comment Thursday. Terms of the buyout have not been finalized.

Callicrate said that McMurry once believed in the Ranch Steakhouse concept, but thought that his advisers had convinced him that he could do better “with less expensive meats.” “I think these guys see a place like Outback Steakhouse with the parking lot full,” Callicrate said, “and don’t see the value of buying a better product.” Callicrate will continue to operate his other Ranch Foods Direct stores and online at www.ranchfoodsdirect.com.

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Fueling Global Prosperity

Fueling Global Prosperity

Worldwide Gains for Farmers Are in Reach

By Jake Caldwell, Center for American Progress

What if we could combat global warming, eliminate unfair trade barriers, and reduce global poverty with policies that could (simultaneously) lessen our country’s dependence on fossil fuels and lift the fortunes of farmers around the world? If that sounds too good to be true, it’s not.

In fact, the 110 Congress could vote key components of this multi-faceted strategy into law this year. Congress only needs to act.

Today, Secretary of Agriculture Michael Johanns testifies before the Senate Agriculture, Nutrition, and Forestry Committee on the administration’s plan for the 2007 Farm Bill. The administration’s proposal is a modest first step, particularly in boosting biofuels research and reducing subsidies to the wealthiest corporate farm entities. But Congress must accept that there is much more work to be done.

The 2007 Farm Bill, which will come up for a vote later this year, will require the 110th Congress to make critical decisions on energy legislation and trade policy. The timing is right for Congress to seize this opportunity to make the investments needed to jumpstart and sustain a global agricultural economy driven by clean renewable energy, technological innovation, and fair and open markets at home and abroad.

The 2007 Farm Bill offers the United States a strategic opportunity to improve the competitiveness of our nation’s farmers. Unlike the Bush administration, the Center for American Progress is putting forward a proposal that moves agriculture, energy, and trade forward together in unison and better prepares our rural communities and the nation for the future by expanding our farm policy to more farmers...

You can Watch Jake Caldwell Discuss the 2007 Farm Bill (YouTube)

An executive summary and the full "Fueling a New Farm Economy" report can be found here: http://www.americanprogress.org/issues/2007/01/farm_economy.html

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

Center for Rural Affairs
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Organic Companies Promise to Remain Clone-Free

Cloneburgers Won't Come with Warnings...
Organic Companies Promise to Remain Clone-Free

By LIBBY QUAID (AP) Food and Farm writer for the Jackson Hole, WY Star Tribune

Cloneburgers won't come with warnings. When the government approves food from cloned animals, expected in the next year, the Food and Drug Administration doesn't plan special labels. Government scientists have found no difference between clones and conventional cows, pigs or goats.

However, shoppers won't be completely in the dark. To help them sort through meat and dairy products, one signal is the round, green USDA organic seal, says Caren Wilcox, who heads the Organic Trade Association.

While many people choose organic to avoid pesticides or antibiotics, Wilcox says the U.S. Department of Agriculture label also means clone-free.

"Organic animal products will not come from cloned animals," she said.

Cloning is taboo to Organic Valley, the country's biggest organic farming cooperative.

"This is absolutely prohibited in our world. It goes against everything we believe," said George Siemon, CEO of the 700-member cooperative. "Organic is based on having plenty with what nature's given us."

"Clone-free" labels are also likely on some nonorganic food, such as ice cream made by Ben & Jerry's Homemade Inc.

Still, it's unclear how much cloning will matter to consumers.

The nation's milk industry worries that people might reject food from clones or turn away from dairy products altogether. But so far, public opinion appears mixed. In a September poll by the Pew Initiative on Food and Biotechnology, 64 percent said they were uncomfortable with animal cloning.

In a December poll by the University of Maryland, the same percentage said they would buy, or consider buying, such food if the government said it was safe...

...Organic is a rapidly growing segment of the nation's food market. Organic sales have grown by up to 20 percent annually; overall growth in food sales is around 3 percent.

Some in Congress want to require labels on food from clones. Sen. Barbara Mikulski, D-Md., has introduced legislation to require this note on packages: "This product is from a cloned animal or its progeny."

Mikulski and other critics disagree with FDA, which has said labels probably are unneeded because clones and their food are as safe as conventional versions.

"The FDA has gone astray, insisting that anytime they say a food is safe, consumers are obligated to eat it," said Carol Tucker Foreman of Consumer Federation of America.

The dairy industry says the bill would hurt their business.

"A huge burden would be on every single milk, cheese and ice cream company in this country, large and small, to provide 100 percent traceability and segregation and labeling of their milk," said Susan Ruland, spokeswoman for the International Dairy Foods Association.

"This is for a kind of milk that isn't even out there yet and that we're not even sure anyone is going to produce," Ruland said.

According to biotech companies, it may be difficult to promise that food is clone-free...

...The Agriculture Department was asked to address cloning when the organic standards were written, a process that drew comments from more than 300,000 people and organizations. The standards, which took effect in 2002, do not mention clones or their offspring; instead, they say genetic engineering is not allowed.

That is a source of disagreement between the department and the cloning industry.

Department officials say cloning is forbidden in organic animals. The process is incompatible with the standards, says Lloyd Day, head of the Agricultural Marketing Service, which governs the organic industry. The department still must decide whether the offspring of cloned animals are allowed, Day said...

...On the Net:

National Organic Program: http://www.ams.usda.gov/nop/indexIE.htm

Federal Drug Administration: http://www.fda.gov

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Center for Rural Affairs
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Working Together We Can Do More

Working Together We Can Do More

By Elisha Greeley Smith, elishas@cfra.org, Center for Rural Affairs

Not all farming and ranching communities have the traditional amenities that some touristy communities have such as beaches or mountains, but virtually all of our rural communities have space and often lots of it. Un-crowded natural land is hard to come by and is going to become a more valuable asset for rural communities in years to come.

What if our land retirement based conservation programs provided bonus payments for enrollments that allowed public access as part of a community development plan? It could provide for the basis for tourism-based small businesses such as bed and breakfasts and other agri-tourism and eco-tourism enterprises.

In the 2002 Farm Bill a program call the Conservation Partnership and Cooperation Program was created to serve these purposes, but its statutory language was vague and never implemented by the USDA.

The Center for Rural Affairs proposes that the 2007 farm bill reauthorize that program as the Cooperative Conservation Partnership Initiative (CCPI) – allowing bonus payments up to 50 percent for enrollment in conservation programs. Enrollment would be conditioned upon certification of the land as consistent with a plan to develop natural space and habitat as a community development asset, the land is restored to native plant species and habitat for native animal species and the land owner provides public access to the enrolled land.

The 2007 Farm Bill should strive to make better use of conservation programs to make rural communities more attractive places to live and visit.

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

Center for Rural Affairs
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USDA Allows Producers to De-register Animal ID Premises

USDA allows livestock producers to de-register NAIS premises

by Peter Shinn, Brownfield Network

USDA has decided to allow livestock producers who have already registered their premises as part of the still-developing national animal identification system to de-list their operations.

Andrea McNally is a spokesperson for USDA's Animal and Plant Health Inspection Service. She told Brownfield since national animal ID is strictly voluntary, producers should be allowed to decide to stop participating at their discretion."

You know, the national animal ID system is a voluntary program," McNally said," and, you know, we intend to put a process into place that would allow people to opt-out if they choose to do so, and we're working on that process right now."

At least one state, Idaho, has added existing breed registration databases to their premises registration database. In the process, Idaho officials have involuntarily registered some livestock premises. But McNally said that's not what's driving USDA's decision to let livestock producers de-register their premises."

No, no," McNally insisted. " It's just that, you know, it's an understanding that if you have a voluntary program that these are the sorts of processes you have to have in place should people choose to no longer be a part of it."

But are other states besides Idaho registering livestock premises without the knowledge of livestock producers? Nebraska Ag Director Greg Ibach told Brownfield he wants to assure producers that's not happening in Nebraska. "We as a state aren't manually working some of our present databases into the system in any way, shape or form," he said.

Calls to the state animal ID coordinators for South Dakota and Iowa revealed both those states are also only registering premises through the direct action of livestock producers themselves. As far as progress in actually registering livestock premises, Nebraska remains a regional and national leader, with nearly half registered. Just over 25% of Iowa's livestock premises and a bit more of 21% of South Dakota's livestock premises are registered as of now.

Audio related to this story - Peter Shinn, Brownfield Network reports http://www.brownfieldnetwork.com/resource/20070202/7e0b3d22-fd06-c618-adccdcf98956a307/103852/Peter%2520Shinn%2520reports%2520on%2520premises%2520registration.mp3

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Center for Rural Affairs
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Can Natural Assets Drive Rural Community Growth?

Can Natural Assets Drive a Portion of Rural Community Growth?

Amenity-driven growth offers a new means to bring economic returns to rural communities, especially in farm and ranch states with private land

by Michael Holton, Center for Rural Affairs, michaellh@cfra.org

In August 2006, ECONorthwest of Eugene, Oregon, studied Nebraska’s natural assets. They looked specifically at land amenities and analyzed the potential economic contribution of amenity-driven growth. This type of growth contrasts with converted-amenity growth like crop production, electricity, or other commodities that are changed and altered for economic purposes.

The report detailed four major mechanisms that challenge our thinking, particularly in economic terms. They included topics such as improving the quality of life, encouraging feedback to the farm sector, expanding recreation and other commercial uses of natural resources, and protecting environmental values.

The perception in Nebraska – probably shared in other farm states – is that our natural resource base has been degraded. People don’t see the quality of life values that are still present.

About 97 percent of Nebraska is privately owned. Most news tends to focus on the devastating effects of herbicides, chemicals, and other environmental hazards that converting crops into dollars has had on our natural amenities. It is no wonder that citizens view the influence of land and other resources negatively.

What should rural citizens do to derive more quality of life in amenity-driven decisions? The first key is to work through a fundamental transition in attitude and behavior towards our natural resources.

It is not easy to shift away from businesses that have made profits from degradation of the land, air, and water. Commercial farming, banks, grocery stores, and others whose fortunes have been linked to the industrial farming model will resist efforts for amenity-driven growth.

The second and more important key is to change the conversation in our communities. People are not satisfied watching their small communities dry up and are looking for alternatives. New options for deriving income from natural assets can prove more lucrative than past practices.

Fishing, bird-watching, boating, eco-tourism, agritourism, and hunting opportunities can help our economy flourish in the future.

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

Center for Rural Affairs
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What Would Rural America Look Like...?

What Would It Look Like If Rural America Mattered...?

by John Crabtree, johnc@cfra.org

--- editor's note - we have asked this question before, but our recent discussion on community development and related issues spurred me to ask it again... so, what would rural America look like if rural people and rural places mattered (in Congress, the White House, state capitols, etc.)... or mattered as much as we deserve, no more, no less...

A few months ago I was invited by the nice folks at Chipotle Mexican Grill and Niman Ranch natural meats to visit Ron Mardesen’s farm near Elliott, Iowa. I had missed all the good food at the main event where Chipotle chefs prepared special pork dishes with Niman Ranch pork for media and others interested in their natural pork business.

Ron raises hogs, farrowing in huts in his fields as part of a five-year rotation. He finishes hogs in hoop buildings and markets them at a premium through Niman Ranch. His weaning rate is as good as or better than a lot of the “state of the art” total confinement systems, despite the fact, as Ron pointed out to me, that extension, USDA, and the land grants have not been tripping over themselves to help producers like him address their challenges in engineering, husbandry, and genetics.

I first met Bill Niman, the founder of Niman Ranch, in 1998 when he came to Walthill to visit the Center for Rural Affairs and share his vision for expanding their natural pork business. The Center has put considerable effort into helping farmers reach high value markets over the years. We have helped Niman Ranch and others connect with producers. And we have helped farmers and ranchers form their own cooperatives to reach into high value markets.

I remember when Bill came to Walthill. We had lunch at Cowabunga Korner, and I listened to him talk about his vision of building a more sustainable, humane, and economically rewarding system of raising, slaughtering, and marketing hogs and cattle. And while listening I thought, for the first, but not the last time, what would rural America look like if we were able to put all these visions together? What would rural America look like if we succeeded in making rural issues, rural people, and rural places truly matter?

Ron Mardesen is a true success story. He and his family have built a profitable, diversified farming operation. They raise some of the best tasting pork anywhere. They have made a beautiful home for themselves and their family. And as we stood among the sows and farrowing huts on Ron’s farm that day, I realized that Ron provided me with part of the answer to my question. What would rural America look like? Well, for one, there would be a lot more farms like Ron Mardesen’s.

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

Center for Rural Affairs
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New Scientific Report Shows Global Climate Change Real...

Scientific Report Shows Global Warming Real and Man-Made

by David Law, Greater Dakota News Service

Watertown, SD - A report released today by the Intergovernmental Panel on Climate Change (IPCC) shows with a new degree of scientific certainty that global warming is real and mostly man made, and it's fueling a new debate over the proposed Big Stone Two power plant in South Dakota.

The Intergovernmental Panel on Climate Change released a report today showing with new certainty that global warming is happening and is mostly man-made. The report, the fourth since 1990, is prompting renewed debate over the merits of a new coal-fired plant under consideration in northeast South Dakota. Jeanne Koster with the South Dakota Resource Coalition says the Big Stone Two power plant would contribute to global warming and that it makes more sense to develop wind power.

Jeanne Koster, member of the South Dakota Resource Coalition and an opponent of the Big Stone Two power plant explained, "This is development that can be pursued incrementally. The power isn't needed all at once, in fact, Big Stone Two can't come on all at once. It will take years. We can gradually be phasing in wind and the coal that we already have is the backup. We have it upside down."

Koster says that a strong economic argument can be made for wind power. "Wind power will bring us more than four times as much annual income as Big Stone Two would. We're looking at 7 million dollars annually economic gains from Big Stone Two, but an investment in wind in South Dakota would bring a steady 35 million annually and several times more permanent jobs. And remember, once those turbines are up, the fuel is free, a gift from heaven," added Koster.

Proponents of the Big Stone Two plant say it's needed to prevent a future energy shortage, but Koster says global warming is moving at an alarming pace and that Congress will eventually respond with carbon charges against customers who purchase energy from power plants that contribute to climate change. The Minnesota Public Utilities Commission will be holding hearings to either reject or approve a request to build power lines into that state.

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Center for Rural Affairs
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