RAFI-USA

E-Bulletin #16

August 2003

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Tobacco Funds Used to Help Farmers' Market
Some Farmers Ineligible for Marketing Loans
Support for Contract Reform Grows
Seeds and Breeds Conference
Truth or Consequences: The Future of Contracts in Agriculture
Briefs: Chickenization, Farmers in a catch-22 again, Hurricane Isabel

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Tobacco Funds Help Farmers' Market

By Jason Roehrig, RAFI-USA Program Manager

Tobacco Communities Reinvestment FundTommy Britt’s family has been growing tobacco on the same farm in northeastern North Carolina for decades. But as tobacco imports are up and domestic production has dropped by more than 50% in the past five years, farmers such as Britt, who depended on tobacco income to keep their farms running, are left with a big hole to fill.

At first, Britt tried cotton and some of the other crops that his neighbors were growing. He soon realized that in order to succeed he needed to find his own niche. Looking around he saw an opportunity in landscaping. Having grown plants all his life, Britt knew that he could grow the perennials he saw in other people’s yards. He also knew that selling those plants was going to be drastically different from taking tobacco to an auction house. Finding a place to sell his new product was the biggest challenge to his new business. Lacking the budget for a big retail facility, Britt turned instead to the Roanoke-Chowan Farm and Garden Market.

For Britt, the weekly farmer’s market has been more than just another place to sell his wares. The market has provided an outlet for his landscaping plants and exposed him to potential customers for his landscaping business without a huge outlay of capital for advertising.
Lynn Johnson, the market president, sees the market as a place where farmers can grow their businesses with the help of the local community. Johnson is working to ensure that a variety of job skill development and business opportunities exist through the market.

George Powell, another tobacco farmer, sells potatoes, tomatoes, melons, and butter beans at the market. When asked what brought him to the Roanoke-Chowan Farmer’s Market, he explains, “I’m working real hard to try to make it on the farm.” He admits that selling produce at a farmer’s market is very different from taking his tobacco to auction, but he likes the interactions with customers, and, “It helps pay the bills,” he adds.

Farmer advocacy organizations have not missed the importance of farmer’s markets in helping tobacco farmers in transition to stay on their feet. This year RAFI-USA, with the support of the Tobacco Trust Fund Commission, gave a $10,000 cost share award to the Roanoke-Chowan Farm and Garden Market to assist with site-preparation for a new market shelter. A number of vacant tobacco barns have been donated for construction of the shelter. Johnson envisions more economic opportunities and possibly a whole new industry developing utilizing the wood from old tobacco barns. She is happy that the market can play an important part in that.

As the transition away from tobacco continues, farmer’s markets are going to play a bigger role in sustaining farms and the rural communities that depend on those farms for survival.

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Some Farmers No Longer Eligible for Marketing Assistance Loans and Loan Deficiency Payments (LDPs)

By Scott Marlow, RAFI-USA and Jill Krueger, Farmers Legal Action Group Inc.

The Farm Service Agency (FSA) issued a notice in early July, notifying local FSA offices that farmers who are delinquent on any federal non-tax debt are no longer eligible for federal marketing assistance loans and loan deficiency payments.

The federal marketing assistance loan program provides short-term loans to farmers who offer their crops as collateral. This enables farmers who are not delinquent to delay sale of their crops after harvest until prices are more favorable, at which time the farmers may sell the crops and repay the loans. Eligible farmers may choose to receive loan deficiency payments (LDPs) instead of marketing assistance loans when the posted county price falls below the loan rate for eligible crops.

Some are critical of the law making delinquent farmers ineligible for the assistance. "Marketing assistance loans and LDPs are more like price supports than traditional farm loans. This change denies price supports to the very farmers who need it most." said Scott Marlow .

Congress made delinquent farmers eligible for marketing assistance loans and LDPs in the past. However, with the passage of the 2002 Farm Bill, Congress would need to act again in order to restore eligibility for delinquent farmers.

Jill Krueger, an attorney at Farmers Legal Action Group, notes, "When delinquent farmers were made eligible in 2001, their payments were required to be applied to their FSA debts. The government's interests were not harmed, but the likelihood that those farmers would keep farming was increased, because the marketing assistance helped them to catch up on their debts."

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Support for Contract Reform Grows

By Laura Klauke, RAFI-USA Project Director, Contract Ag Reform

This October a diverse group of farm and civic organizations delivered a letter to Senator Orrin Hatch in support of legislation to address abuses associated with forced arbitration clauses in livestock and poultry contracts. A group of diverse organizations signed on to the letter printed below.

The groups urged Senator Hatch, as Chairman of the Senate Judiciary Committee, to support the quick passage of the Fair Contracts for Growers Act of 2003 (S. 91) introduced this January by Senators Grassley and Feingold. The Fair Contracts Act ensures that the decision to arbitrate is truly voluntary. It specifies that if a livestock or poultry contract provides for the use of arbitration to resolve a dispute, arbitration may be used to settle the controversy only if, after the controversy arises, both parties consent in writing to use arbitration.

The sign-on letter does not include every organization supporting the protection of contract farmers' legal and civic rights. Individual citizens and other organizations are encouraged to contact their own Senate members with a similar message. (See letter below)

Contact Laura Klauke at RAFI-USA 919-845-4615 or laura@rafiusa.org for more information.

Letter to Senator Orrin Hatch on Arbitration Bill

October 3, 2003

The Honorable Orrin Hatch, Chairman
Committee on the Judiciary
United States Senate
Washington D.C. 20510

Dear Mr. Chairman:
In January of this year, Senators Grassley and Feingold introduced the Fair Contracts for Growers Act of 2003 (S. 91) to address abuses associated with mandatory arbitration clauses in livestock and poultry contracts. A strong bipartisan and regionally diverse group of senators has cosponsored the bill, including Sens. Enzi, Johnson, Leahy, Harkin, and Edwards. We are writing to urge your support for S. 91, and for its passage by the Judiciary Committee at the nearest possible opportunity.

It is becoming increasingly common for farmers and ranchers to be forced to sign mandatory arbitration clauses, as part of "take-it-or-leave-it" non-negotiable contracts with a large, vertically integrated processing firms. Farmers are forced to give up their basic constitutional right to a jury trial, and instead must accept an alternative dispute resolution forum that limits their rights and is often prohibitively expensive. These clauses are signed before any dispute arises, thus paving the way for unscrupulous integrators to employ practices that are unfair without fear of legal challenge by the farmer.

In recognition of these concerns, the Senate passed an amendment offered by Sens. Feingold and Grassley during the recent farm bill debate to prohibit the use of forced, mandatory arbitration clauses in livestock and poultry contracts. The amendment was passed 64 to 31, but was ultimately dropped during conference negotiations.

As the lead sponsor of the Motor Vehicle Franchise Contract Arbitration Fairness Act, you have been instrumental in bringing attention to the abusive use of mandatory arbitration clauses. The Grassley-Feingold Fair Contracts for Growers Act is nearly identical in structure to the "car dealer" arbitration bill that you ushered to enactment in 2002. Specifically, it prohibits the use of pre-dispute mandatory arbitration clauses in livestock and poultry contracts, and would require that both parties to such a contract agree in writing to pursue arbitration after the dispute arises.

Arbitration can be a useful and valuable tool when entered into in a voluntary manner by two parties. However, arbitration can be used to severely limit the rights and judicial options in a non-negotiable contract.

We look forward to working with you and other members of your committee toward passage of this important legislation.

Sincerely,

Alabama Contract Poultry Growers Association
American Farm Bureau Federation
Campaign for Contract Agriculture Reform
Consumer Federation of America
Georgia Poultry Justice Alliance
Humane Society of the United States
National Contract Poultry Growers Association
National Farmers Union
North Carolina Contract Poultry Growers Association
Organization for Competitive Markets
Rural Advancement Foundation International- USA
Sustainable Agriculture Coalition
United Poultry Growers Association

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60 Attend Summit on "Seeds and Breeds for the 21st Century"

By Michael Sligh, RAFI-USA Project Director, Just Foods

A conference to discuss the challenges and solutions to the nation's seeds and breeds, sponsored by RAFI-USA, brought together over 60 people representing farmers, public plant and animal breeders, sustainable agriculture organizations, rural sociologists, consumers, USDA and legislative officials. The meeting was held in Washington DC September 6 through the 8th.

Michael Sligh chaired the three-day meeting and led the participants through specific ideas on the general topics presented by 5 keynote speakers followed by panel discussions, audience participation and the drafting of conclusions.

Over the course of the summit, the participants hoped to:
• Develop a blueprint for re-invigorating plant and animal breeding to meet the needs of a more sustainable agriculture
• Build momentum to continue to work together toward these ends.
• Launch a campaign to educate policy makers about the issues
• Publish sound information on actions toward achieving these goals

"Now is the time at the beginning of this new century," said Sligh, "to focus our attention on what plant and animal breeding and agricultural genetic conservation can do to help solve some of the many complex societal and environmental challenges facing agriculture.

"Agriculture is a diverse enterprise involving a vast array of crops produced in a wide range of climatic, economic, and cultural environments on widely diverse farms. New value-added market opportunities such as organically grown foods are increasing. For many reasons, it is in the nation's interest to ensure a broad availability of crop varieties and animal breeds to ensure farmer and consumer choice.

"Regrettably, the United States has not taken a long-term, comprehensive, strategic approach to these challenges and the public sector breeding has declined. Currently, the USDA's Agricultural Research Service and Land Grant Universities, once major developers of new varieties and breeds, release relatively few new varieties or breeds compared with the private sector. In this era when control of elite germ plasm has increasingly become proprietary, it is important to assure a balance through enhanced activity within the public domain," Sligh continued.

The conference proceedings will be made available on RAFI's website (www.rafiusa.org) and will include all papers presented, comments and examples of successful programs.

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Truth or Consequences: The Future of Contracts in Agriculture

By Laura Klauke, RAFI-USA Project Director, Contract Ag Reform

The University of Arkansas and the Farm Foundation sponsored a conference on the future of contracts in agriculture in Kansas City, MO September 4th and 5th. The 29 speakers included distinguished economists, rural sociologists, attorneys, academics, representatives of ag co-ops and non-profits, both state and federal governments and a large processing company. Two of the speakers were also working farmers familiar with contracting crops and livestock.

The speakers covered many aspects of contracting such as bargaining, producer protection laws, lending practices, employee or independent status, legal issues, arbitration, impact on farmers, alternatives, and cooperatives. The panelists' time was tight and speakers did their best to stay within the limits; however, there was little time left for comments or questions from the audience.

The conferees concluded that contracting is here to stay and that the drivers most responsible for how food will be produced will be the consumers and competition.

The conference organizers are compiling the presentations, handouts and additional information from the proceedings on a CD which will be for sale at $25 ea. You may order a CD from:

Janie Hipp
217 Agriculture Bldg.
University of Arkansas
Fayetteville, Arkansas 72701
Ph: 479-575-2256
Fx: 479-575-5306
Jhipp@uark.edu

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Briefs

Chickenization
On September 23, Sen. Grassley (R-IA) introduced bill S.1644, an amendment to the Packers and Stockyards Act titled "Annual Limitation on the Number of Packer-Owned Swine Slaughtered by Certain Packers."

In his remarks to the Senate, Sen.Grassley explained that his bill would make it unlawful for any packer with an annual slaughter capacity of more than 20 million swine to slaughter more than 10 million of its own hogs, thus forcing the packer to purchase the other 10 million from independent farmers.
He explained, "I am offering this because I believe the pork industry is at a critical juncture due to the impending sale of Farmland's pork division. Either we stop the trend toward vertical integration, or we prepare for the inevitable "chicken-ization" of the pork industry.

Senator Grassley's reference to the chicken industry shows that the contract poultry growers have been successful in explaining their plight to the rest of the nation - so successful that a mid-Western Senator can use "chickenization" in the U.S. Congress with the knowledge that everyone there understands what he means.

Coastal Farmers in a Catch-22
Rose Acre Farms of Indiana is proposing to build a 4 million chicken operation to produce table-eggs in Hyde County, North Carolina within a mile of a national wildlife refuge and several miles from rivers, towns, other wildlife refuges and the coast. The area is a favorite hunting, fishing and boating area as well as a tourist site for wildlife observation.

Coastal towns and many state organizations including RAFI-USA are asking Governor Easley to conduct a thorough investigation into the potential impacts, costs and benefits to all concerned.

In Washington County, adjacent to Hyde Co., the U.S. Navy is planning an Outlying Landing Field (OLF) for practice take-offs and landings on aircraft carriers. The 2000-acre field is adjacent to wildlife refuges and farmers' grain fields where waterfowl fly in to feed on the waste grain. In December and January those numbers peak to 100,000 birds including 20,000 tundra swans, 65,000 snow geese, and huge flocks of tree swallows and red-winged blackbirds.

The farmers in these counties raise large amounts of grain on thousands of acres of flat coastal land. On the one hand they are looking forward to the large, nearby market for their grain crops if the huge chicken operation is built. On the other hand, if the Landing Strip is approved, the Navy plans to mitigate the severe threat to aircraft from birds (Tundra Swans have a 6-ft. wingspan and weigh 15 lbs.) by proposing that 53,000 nearby acres be made "unattractive" to the birds by limiting their forage. Farmers will be forbidden to plant anything attractive to the birds as food - including their grain crops!

Hurricane Isabel

Hurricane Isabel made landfall on the northeastern coast of North Carolina and moved quickly across the state northward into Virginia where it unleashed its strongest punch.

RAFI-USA opened its Dan Pollitt Conference Center as a shelter for farm families in the path of Isabel. Thirty-five men, women and children took refuge there for two days and nights until the storm had passed.
The area covered by the enormously wide storm is also the home to hundreds of commercial chicken and hog farms. Farmers, with memories of Hurricane Floyd fresh in their minds , took advantage of the early warnings to prepare generators and feed supplies for the certain power outages. In the end, NC reported losses of only 18,000 chickens. No hogs or turkeys were lost to the storm and no hog lagoons overflowed or were damaged. .

In the path of the storm were also large acreages of corn, soybeans, cotton, peanuts and tobacco. Early reports indicate that $134.8 million in damage was done to these commodities. (Feedstuffs, Sept. 29, 2003, p.34)

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Bulletin edited by Mary Clouse - 919-545-0945; clouses64@yahoo.com

For more about RAFI-USA and back issues of the bulletin, see the RAFI-USA Home Page or call 919-542-1396.

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