In redefinining 'rural,' Senate version of Farm Bill could cut funds for neediest rural areas

The Senate version of the Farm Bill would streamline definitions of “rural” but one result "could be less funding for the very areas that most meet what many Americans would consider the targeted recipients for these programs," Farm Bill policy expert Aleta Botts writes for The Rural Blog and the Daily Yonder.

USDA Rural Development programs use varying definitions of “rural area,” Botts explains. “Rural water programs are allowed to go only to cities, towns, or unincorporated areas of fewer than 10,000 people. The limit for community facility programs (which pay for libraries, health centers, and many other community brick-and-mortar investments) is 20,000, while the limit for business programs is 50,000.” The Senate bill would use a 50,000 limit for all programs.

That could hurt rural areas with small populations, Botts writes. She notes testimony by the National Rural Water Association that more than 400 communities will have to wait until at least next year for water-project money. “This is an oversubscribed program and has been for years,” she writes.  “If it is oversubscribed now with its limit at 10,000 people, what will result when the population limit is raised to 50,000?”

The bill sets aside half of one rural water program’s funds to communities with fewer than 3,000 people and gives a “priority” to areas with fewer than 5,500. “But more than 80 percent of the funding already goes to areas of 5,000 or fewer, according to the National Rural Water Association testimony, so this language may actually mean little in practice,” Botts writes. For her full article, click here.

Emerald ash borer sighted in Mass. for first time

The emerald ash borer is eating its way up the East Coast, leaving swaths of dead or dying ash trees in its wake. It has been spotted in Massachusetts for the first time, officials said yesterday, in Berkshire County in the hilly western part of the state. Ash trees are the main component of the state's northern hardwood forest.

State officials said they are working with the U.S. Department of Agriculture to limit the beetle's impact on forests and the wood-products industry, Ros Krasny of Reuters reports. Massachusetts Department of Conservation and Recreation commissioner Ed Lambert said officials "are not taking its presence lightly" and are defining a quarantine area to limit movement of certain wood products, and working with landowners to properly treat and dispose of infested timber.

The invasive Asian beetle has destroyed tens of millions of trees in the U.S. since being accidentally introduced here in the 1990s. It was first discovered in Michigan in 2002, and has been found in 17 other states since then. Its larvae feed on the inner bark of trees, cutting off their ability to take in water and nutrients. Infested ash trees die within a few years. (Read more)

Study says wind energy development increases personal income and creates jobs in rural counties

After all the cheerleading and naysaying on the matter, at last, a systematic analysis of how wind energy development affects rural counties has been done. That study, in the current issue of Energy Economics, shows that wind energy development increases both personal income and employment in the county where the development is located. The paper was authored by Jason P. Brown and John Pender of the U.S. Department of Agriculture's Economic Research Service, Ryan Wiser and Ben Hoen of the Lawrence Berkeley National Laboratory and Eric Lantz of the National Renewable Energy Laboratory.

The Daily Yonder breaks down the complexities to explain that "the economists looked at wind capacity installed in 12 states from 2000 to 2008. The states included Iowa, Kansas, Minnesota, Nebraska, North Dakota, South Dakota, New Mexico, Oklahoma, Texas, Colorado, Montana, and Wyoming. In all, the study area included 1,009 counties. Their findings concluded that for every megawatt of wind power capacity installed, total county personal income increased by $11,150 over the 2000 to 2008 period. And, for every megawatt of wind energy installed in a county, one half of a job was created." (Read more)

Amid drought, farm income predicted to be way up

With 2012 corn and soybean supplies expected to be the lowest in almost a decade and their prices at new highs, partly because of an exceptional drought in much of the southern Midwest, U.S. net farm income is set to hit its highest levels since 1973 despite the drought's impact on production, according to Tuesday's U.S. Department of Agriculture farm and cost report.

In real numbers, that means net cash income for farms could exceed $139 billion. Agri-Pulse reports that  "the balance sheet also looks extremely good," with farm equity expecting to increase to an all-time high of almost $2.3 trillion in value. "Debt repayment capacity utilization -- a measure of farm exposure to financial risk -- is forecast to be at its lowest since 1970," the agricultural newsletter explained.

Agri-Pulse is subscription-only, but free trials are offered at www.agri-pulse.com.

USDA modifying conservation programs to help farmers struggling with drought

The Department of Agriculture is allowing flexibility in its conservation programs to help livestock producers affected by the persistent drought. Secretary Tom Vilsack also intends to encourage crop insurance companies to "provide a short grace period" for farmers unable to pay their premiums because of crop losses, a USDA release said..

The flexibility will allow conditions of the Conservation Reserve Program, Environmental Quality Incentives Program and the Wetlands Reserve Program to be modified to allow haying and grazing on lands enrolled in those programs. The USDA will also encourage crop insurance companies to forego charging interest on unpaid crop insurance premiums for an extra 30 days for spring crops, which are being devastated by drought. (Read more)

Farm economies dim as drought continues

The drought ravaging crops from Indiana to Arkansas to California is taking its toll on rural economies and threatening to drive food prices to record levels, Bloomberg reporters Joshua Zumbrun and Mark Drajem write. (Photo of Morse Reservoir near Cicero, Ind., by Daniel Acker for Bloomberg)

Agriculture had been one of the most resilient industries in the past three years as the country struggled to recover from the recession; now it could be a drag. “It might be a $50 billion event for the economy as it blends into everything over the next four quarters,” said Michael Swanson, agricultural economist in the Minneapolis office of Wells Fargo & Co., the nation's largest commercial agriculture lender. “Instead of retreating from record highs, food prices will advance.”

The Department of Agriculture declared last week that more than 1,000 counties in 26 states are natural-disaster areas, the biggest such declaration ever, report Zumbrun and Drajem. This makes them eligible for low-interest loans. Corn prices rose Monday to the highest in 10 months, and soybeans increased to the costliest since 2008. Ernie Goss, a professor of economics at Creighton University in Omaha, said farm income, which has underpinned the growth of many rural states, will be under “significant downward pressure."

Next year, though, farmers are expected to boost equipment, seed and fertilizer purchases as they try to recoup in production what they lose this year, said Ann Duignan, analyst for JPMorgan & Co. This year’s lost crops will force some farmers to take out new loans to get through a poor season. “In those areas hit the hardest by drought, we will have to work with those farmers to do some additional financing because they’ll be missing the revenue they were expecting,” Well Fargo's Swanson said. “Farmers have always said to me $7 corn is no good if I have no corn,” Duignan added.

Weather no problem in California: Almond farmers to harvest third record crop in as many years

Thanks largely to excellent weather, California’s almond industry is pointed toward a third consecutive year for a record crop and its second 2-billion-pound crop in a row, reports Dennis Pollock of Western Farm Press. Growers are hoping to sustain prices in the $2 per pound range.  A U.S. Department of Agriculture forecast issued June 29 revised this year’s crop upward to 2.1 billion meat pounds. That’s up 5 percent from May’s subjective forecast and 3 percent above last year’s crop. The expected pounds per acre for 2012 are 2,690, compared with 2,670 for 2011.

“This number is about where buyers had in mind that the crop would be,” said Frank Roque, general manager of Panoche Creek Packing in Kerman, Calif., one of largest independent almond packers in California."We grew our business 13 percent last year and hope to grow it this year.” Don Cameron, general manager of Terra Nova Ranch Inc. at Helm, said that the demand is there "to use every bit of the crop, and the prices to farmers should remain at good levels. This is what the market needs."  Michael Kelley, president of the Central California Almond Growers Association, called the almond industry’s growth “a great story of sustainability for the state."

Almond growers are preparing for a harvest that is expected to be earlier than usual, possibly in the first or second week of August. Cooler temperatures in late June helped the nuts to reach proper size and also gave a boost to the hulls, the uses of which include cattle feed. (Read more)

Growers of cranberries, which need sugar for sales, fear possible exclusion from schools

The federal government is expected to propose new nutrition standards soon that worry cranberry growers from Massachusetts to Wisconsin and into Canada. The effort, urged on by first lady Michelle Obama's "Let's Move" initiative, is the Department of Agriculture's likely new guidelines for what can be sold in school vending machines, stores and cafeteria lines. Sugar is the target, writes Larry Bivins of USA Today, and sweetened beverages like cranberry juice cocktail could be deemed unhealthy because the berry is not popular without some sort of sweetener added. That would be unfortunate and unfair, cranberry industry officials say, because the tart, deep-red fruit is loaded with nutrients and health benefits. But for consumers to avail themselves of those benefits, cranberries must be palatable. "Cranberries can be sweetened with anything," said Linda Prehn, a cranberry grower in Tomah, Wis., citing apple juice as an example. (Associated Press photo of Massachusetts cranberry worker Miguel Sandel)

Prehn, chairman of United Cranberry Growers Cooperative, a collective of 85 growers in Massachusetts, Oregon and Wisconsin in the U.S. and the Canadian provinces of New Brunswick and Quebec, was among cranberry honchos attending the recent inaugural meeting of the Congressional Cranberry Caucus on Capitol Hill. Prehn and others are hoping the bipartisan caucus led by Reps. Reid Ribble, R-Wis., and Bill Keating, D-Mass., and Sens. John Kerry, D-Mass., and Scott Brown, R-Mass., can help persuade agriculture officials to make an exception for cranberry products in its nutrition standards for added-sugar products.

"Given the beneficial and scientifically proven health properties of cranberries, we believe there is a need to establish clear standards that recognize cranberries as a part of a healthy diet," the lawmakers wrote in a letter to Agriculture Secretary Tom Vilsack. The lawmakers sent a similar letter to the first lady, pointing out cranberries "contribute to whole body health, particularly urinary-tract health and the potential to fight cancer and other diseases." At stake is exclusion from an estimated $2.3 billion school vending-machine business and an image that could have a negative impact on the marketing of cranberry products worldwide, particularly cranberry juice cocktail, industry officials say.

Corporations' increased role in funding university agricultural research raises concerns about influence

UPDATE, June 8: From 1994 to 2010, research and development expenses in the private sector to improve agricultural production increased by more than 40 percent in inflation-adjusted dollars, USDA's Economic Research Service reports.

The gap between federal support for agricultural research at large public universities and private investment continues to widen. A new research report suggests that the divide may mean an increased threats to academic freedom and more potential for corporate meddling in the once-independent university lab.

Alan Scher Zagier of The Associated Press reports, "A recent study shows that nearly one-quarter of the money spent on agricultural research at land-grant universities comes from corporations, trade associations and foundations, an all-time high. Financial support from the U.S. Department of Agriculture accounts for less than 15 percent, the lowest level in nearly two decades." Here's a graph showing the trend:

Zagier says the report by Food and Water Watch, a Washington-based environmental group, is "rife with what it calls examples of how corporate money 'corrupts' the public research mission at land-grant schools, which were created by the Morrill Act of 1862 (which will be 150 years old July 2). The examples range from a University of Georgia food-safety program that allows industry groups to join an advisory board in exchange for annual $20,000 donations, to an Ohio State University professor whose research on genetically modified sunflowers was blocked by two seed companies after the initial results suggested the sunflowers fostered the growth of weeds.

"The report, entitled 'Public Research, Private Gain,' also explores the blurry lines created when universities and industry work together, such as when South Dakota State University sued farmers over wheat-seed patents as part of a public-private coalition formed with a Monsanto Co. subsidiary. The company is known for aggressive litigation against what it calls seed piracy. Kansas State University, Colorado State and Texas A&M have pursued similar lawsuits," Scher Zagier reports. "Such alliances are a far cry from land-grant universities' historic role in promoting public knowledge and freely sharing the fruits of their research," said Patty Lovera, Food and Water Watch's assistant director.

Deans at several agricultural colleges said corporate support is vital but would be unlikely to sway research results or even influence what research gets done. "We're kind of caught between a rock and a hard place," said Thomas Payne, dean of the College of Agriculture, Food and Natural Resources at the University of Missouri. "In order for research to continue, we have to have support from a variety of sources." With the current five-year Farm Bill set to expire, AP notes, Food and Water Watch is lobbying for a boost in federal investment "in campus agricultural research, with more resources steered toward sustainable methods, organic farming and reduced use of pesticides. The group also is calling for land-grant universities to more fully disclose gifts by private donors and wants agricultural research journals to adopt more stringent conflict-of-interest rules, similar to the recent crackdown by medical journals." (Click here to download the report.)