FEBRUARY 2007 NEWSLETTER

If Rural Really Mattered, What Would It Look Like in America?
It would look a lot like Ron Mardesen’s diversified, profitable Iowa farm raising hogs — and great tasting pork — for Niman Ranch

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 solve 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.

Contact: John Crabtree, johnc@cfra.org or 402.687.2103 x 1010 with your comments.

New Toll-Free Organic Hotline Established

If you ever considered transitioning to organic production and had questions, it is now easier to find answers. The Midwest Organic and Sustainable Education Service (MOSES), based in Spring Valley, Wisconsin, has a new toll-free Farmer Transition Hotline, 888.551.4769 (GROW), for Midwest producers interested in making the transition to organic production.

The new hotline will be staffed by long-time organic farmer, trainer, and organic inspector Harriet Behar, of Gays Mills, Wisconsin (608.872.2164). With more than 20 years experience and hundreds of farm visits, Behar says, “I’m here to help farmers understand the organic regulations and get through the paperwork.”

MOSES board member Audrey Arner, a beef producer from Montevideo, Minnesota, says the purpose of the hotline is to give farmers the chance to get clear answers to questions about organic production and marketing. According to MOSES Communication Coordinator Doug Nopar, “Undoubtedly we need more organic farmers, and that is why this new hotline is so important.” Nopar says, “Be it dairy, beef, poultry, hogs, produce, or livestock feed, the demand far exceeds current supply.”

MOSES will also host the 18th annual Upper Midwest Organic Farming Conference in La Crosse, Wisconsin, February 22-24, 2007. More than 2200 people attended this event last winter, making it the largest conference of its kind. Find out more about the conference at www.mosesorganic.org or call 715.772.3153.

CORPORATE FARMING NOTES
I-300 ruling appeal; farm bill competition title urged; pork boards push for animal IDs

>> Nebraska Attorney General Jon Bruning announced on December 19, 2006, that he will appeal an 8th U.S. Circuit Court of Appeals ruling that Initiative 300, Nebraska’s corporate farming ban, is unconstitutional. He will appeal the decision directly to the U.S. Supreme Court.

“We evaluated the case further and believe a Supreme Court appeal is our best option at this point,” Bruning said. On December 13, a three-judge panel of the 8th Circuit concurred with district court Judge Laurie Smith-Camp’s earlier ruling that Initiative 300 violates the U.S. Constitution’s dormant commerce clause. In late January, the Judge issued an injunction prohibiting the state from enforcing Initiative 300.

In his earlier decision Bruning said, “Nebraskans voted to add Initiative 300 to our state Constitution because family farms are an important part of our heritage. It’s our job to defend the amendment, and that’s what we’ll do.”

We urge Attorney General Bruning to fight on, because family farmers and ranchers are an important part of more than our heritage, they are an important part of our economy, our well-being, and our rural communities. 

>> On January 18, 2007, the Center for Rural Affairs joined more than 200 farm, faith, and rural organizations in sending a joint letter to the members of the House and Senate Agriculture and Judiciary Committees in Congress, urging them to restore fair, open, and competitive markets for our nation’s farmers and ranchers.  See the competition letter

The signatories urged the senators and representatives to champion a comprehensive competition title in the 2007 farm bill. The letter went on to recommend the inclusion of measures to limit packer and processor control and manipulation of livestock markets and producers.

>> The National Pork Board (NPB) and National Pork Producers Council (NPPC) will use $400,000 from USDA to make a major push aimed at getting all swine premises in the U.S. registered for the National Animal Identification System (NAIS).

NPPC President Joy Philippi said that 40 percent of U.S. pork producers have already registered their premises and that she has no doubt the remainder can be registered by 2008. All 50 states are currently registering livestock premises. USDA continues, however, to claim that the NAIS will not become a mandatory program.

Contact: John Crabtree, johnc@cfra.org or 402.687.2103 x 1010 for more information.

Guide Helps Farmers Take Ideas to the Bank

The Rural Advancement Foundation International - USA has released The Farmer’s Guide to Agricultural Credit. The guide provides step-by-step advice on financing non-traditional farm-based enterprises.

The Farmer’s Guide grew out of the Farmer & Lender Project, a partnership between RAFI-USA and the Self-Help Credit Union, supported by the North Carolina Tobacco Trust Fund Commission.

Creative ideas, from growing organic produce to grinding corn into grits, offer farms a way to stay afloat in financially challenging times. However, these ideas can be difficult to explain to lenders who are used to dealing with traditional commodity crops.

Farmers have experience with getting annual operating loans, but are often unprepared for the amount of documentation lenders expect for a new enterprise. Agricultural lenders know how to assess risks and benefits of familiar crops, but few of them are prepared to evaluate a new kind of project.

The Farmer’s Guide helps close this gap. It outlines how lenders evaluate loan applications, how to communicate ideas to lenders, and what resources are available to help along the way. A steering committee of farmers, commercial and agricultural lenders, representatives of state government, and other experts helped produce the Farmer’s Guide.

The Farmer’s Guide is available on-line at http://www.rafiusa.org/pubs/puboverview.html. A limited number of printed copies are available by mail. North Carolina farmers may request a free copy by calling 919.542.1396. Out-of-state shipping requires $10 to cover the costs of printing and postage.

RAFI-USA is a nonprofit organization dedicated to community, equity, and diversity in agriculture.

New Research Era in Agriculture Could Come from 2007 Farm Bill

The needs of family farm agriculture and rural communities are front and center in a new research proposal sponsored by the Sustainable Agriculture Coalition (SAC) and the Center. So far, these needs have gone largely ignored.

The Farm, Food, and Rural Transitions Competitive Grants program calls for $60 million a year. It would be directed for research focusing on improving the competitiveness and viability of small and moderate-size family farms; renewing the health and vitality of rural communities; enhancing natural resources protection and ecological health; and creating new farm and food system approaches to improve public health, food safety, and nutrition.

In contrast, the newest proposals out of the land grant lobby shops are two – one called Create 21 and another called NIFA (National Institute for Food and Agriculture). NIFA seeks to build a national institute focused on agriculture, comparable to the National Institute for Health.

The hope is that creating an institute will infuse billions of new dollars into agricultural research, extension, and education. The Create 21 proposal develops a national competitive grant program administered by the Secretary of Agriculture and an appointed board.

Congress and the architects of Create 21 and NIFA should designate the following areas as specific subprograms for the nation’s research policy:

• Agriculture of the Middle, focused on medium-sized family farms
• New Farmers and Ranchers
• Agricultural and Rural
• Entrepreneurship
• Public Plant and Animal Breeding
• Ecosystem Services
• Conservation Effectiveness
• Climate Change Mitigation
• Renewable Energy, notably developing sustainability criteria and resource conserving feedstock
• Rural Development Strategies
• Food System-Public Health Interactions
• Local and Regional Food Systems

If those developing Create 21/NIFA are interested in creating a new and inspired research agenda that embraces diverse constituent needs and innovation, they should give serious consideration to the SAC proposal.

Contact: Kim Leval, kimleval@qwest.net or 541.687.1490 to join our efforts for a more balanced and innovative research agenda.

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 ag states with private land

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.

Next month I will examine how feedback to the farm sector can help this conversation.

Contact: Michael L. Holton, michaellh@cfra.org or 402.687.2103 x 1015 for details. We're happy to announce that the first Rural Community Revitalization Discussion Guide is online: The Community Development Puzzle. So is the companion Facilitator's Guide.

Nebraska Legislature Opens with Fresh Faces and New Ideas

The 2007 session of the Nebraska Legislature began on January 3, 2007 with plenty of fresh faces and a promise of fresh ideas. Because of term limits, nearly half the Legislature consists of first-time senators, all focused on their priorities that they need to get accomplished in the limited time they have in the Legislature.

The 2007 session is a “long session” (90 days) that will focus on creating a state budget for the next two fiscal years. On January 11, Governor Dave Heineman released his budget proposal that frames the budget debate on limiting state spending and cutting taxes. The Governor’s budget proposes a 3.8 percent increase in state spending over the two-year budget period, significantly less than in recent budgets.

The Governor is also proposing a total of $476 million in tax cuts over the next two years, primarily from modest income tax cuts for middle and higher-income taxpayers. While most of the Legislature seems in a tax-cutting mood, many senators believe the Governor is focusing on the wrong tax.

Newly elected senators fresh off the campaign trail believe tax relief should be focused on property taxes. In the past, governors and legislatures have attempted to achieve property tax relief by providing more state aid to local units of governments supported by property taxes. In the new session, new ideas to provide property tax relief directly to taxpayers are appearing. This promises to be one of the more interesting debates of the 2007 session.

Center priorities such as adjustments to the Microenterprise Tax Credit (LB 177) and the Building Entrepreneurial Communities Act (LB 232) to expand their use and make them more user-friendly have been introduced. So has a property tax “circuit breaker” that provides an income tax credit when property taxes reach a certain level for both residential and agricultural property (LB 684).

In addition, like most Midwest and Plains states, Nebraska will be considering numerous proposals to enhance the state’s energy economy. Finally, a bill (LB 516) has been introduced to explore corporate farming issues in light of recent Initiative 300 court decisions.

You can keep up with legislative news through our weekly email update.

Contact: Jon Bailey, jonb@cfra.org or 402.687.2100 to be added to Legislative Update.

Center’s Online Efforts Get a Boost with New Staff

This month we welcome two new faces to the Center’s staff. Jeff Leanna joins the Center as the E-Advocacy and Development Coordinator. Jeff will be focused on mobilizing and engaging rural America, driving online communications, building grassroots support for the National Rural Action Network, and developing online donor development strategies.

Jeff is a lifelong Nebraskan and grew up in Omaha. He comes to the Center from a Washington DC-based grassroots field and political strategy firm. Most recently, Jeff earned a master’s degree in public administration from the University of Nebraska - Omaha where he concentrated on nonprofit and organizational management. You can reach Jeff at 402.687.2103 x 1021 or email jeffl@cfra.org.

Brian Depew joins the Center as the Rural Revitalization Technology Coordinator. He will be working on rural policy and online communications at the Center with a focus on rural community revitalization and the National Rural Action Network.

Brian grew up on a farm in rural Northwest Iowa, and he was actively involved in farm operations throughout high school and college. More recently Brian earned a master’s degree in philosophy from Colorado State University where he studied agricultural ethics. You can reach Brian at 402.687.2103 x 1020 or by email at briand@cfra.org.

We welcome Jeff and Brian, and the skills they bring to the Center for Rural Affairs. Look for newsletter articles from them in coming months about technological improvements in the Center’s online communications, future outreach plans, the digital divide, and more topics.

Beginning Farmer Tax Credits — Giving Beginners a Real Chance
State tax credits in Nebraska and Iowa are designed to help overcome financial barriers to getting started in farming and ranching

Over the past several decades, family farms (and by extension rural communities) have become more and more endangered. A number of states, including Nebraska and Iowa, have begun to address the difficulties associated with entering farming or ranching as a career way of life.

The greatest barrier to beginning farmers or ranchers is financial – basically a lack of capital (or access to capital). Farmland slated for transition to a new generation is often swallowed up by very large producers. Their access to liquid capital (due in large measure to government payments) drives prices beyond a beginner’s ability to compete for land or access to land.

As fewer and fewer family farms/ranches operate in Nebraska and Iowa and other states, rural communities and small businesses see their customer base dwindle. The result is fewer consumers, fewer taxpayers, fewer jobs, and fewer opportunities for people to remain in or move to rural areas of the country.

Nebraska and Iowa have implemented tax programs designed to encourage retiring landowners to work with persons wishing to enter farming/ranching. Stabilizing or increasing the number of family farmers/ranchers helps rural communities increase economic activity, broaden the tax base, and increase the number of taxpayers and jobs.

In Nebraska, the tax credit incentive to landowners who rent to qualified beginning farmers/ranchers was increased to 10 percent of rental income for cash rentals and 15 percent of the cash equivalent of share rentals. Share rentals typically provide for sharing of expenses and risks between the landowner and the tenant. They are especially beneficial to beginning farmers/ranchers, but result in somewhat greater risks for the landowners.

To be eligible, a beginning farmer/rancher in Nebraska cannot have a net worth above $200,000 (up from $100,000 in the original 1999 legislation). The beginner must also be a legal resident, demonstrate adequate farming or livestock production experience, and provide a majority of the day-to-day physical labor and management of the operation. Additional requirements can be found on the web at http://www.agr.state.ne.us/division/med/begfrm.htm.

Iowa’s law is similar to Nebraska. There is a 5 percent credit for rental income received with a cash rental agreement, and a 15 percent credit for the owner’s share under a share agreement. To qualify, Iowa beginners must have a net worth of not more than $300,000 ($600,000 for eligible partnerships); be legal residents; demonstrate adequate farming or livestock production experience or education; have access to adequate working capital, farm equipment, machinery or livestock; and “materially and substantially participate in farming the assets subject to the lease.” Additional requirements and more information can be found at http://www.iada.state.ia.us/program_summary_tax_credit.doc.

Please contact your state Department of Agriculture to find out more about programs available in your area to assist beginning farmers and ranchers.

Contact: Mike Heavrin, 402.687.2103 x 1008 or mikeh@cfra.org for more information.

Holistic Land and Profit Training Courses Offered

“I’ve learned to better plan my business and to enjoy it more while taking better care of my land,” says Paul Rohrbaugh, a farmer from Steinauer, Nebraska. He credits Holistic Management training with helping clarify his business and personal goals while laying out a plan for controlling costs and choosing profitable enterprises on his hilly farm. Paul direct markets pasture poultry and beef while working to bring his son back to the farm.

Other farmers and ranchers have tripled profits, increased rooting depth of pasture grasses, doubled or greater their stocking rate, tripled the number of plant species, quadrupled soil permeability, freed time to spend with family and community, and more. A number of course graduates have received conservation awards across the country.

Training courses for improving land health, business profits, and family/business goal-setting are scheduled for 2007 from Holistic Management International. Both introductory courses and Certified Educator advanced courses are available.

Courses include topics such as:

• Innovative grazing planning techniques for maximizing stocking rate and improving land health.
• Management and decision-making skills to enhance productivity.
• Home in on your unfair advantage as a producer.
• Effective ways to increase profit and decrease expenses.
• Effective time management and team building practices.
• New approaches to gaining support from environmental groups and government agencies.
• Ways to develop your land or business with future generations in mind.

Courses will run in February, March, and November. Call 505.842.5252 for more information or sign up via the web at http://holisticmanagement.org.

Notables this Month

>> The Sustainable Agriculture Coalition will be hosting “Roots to Reform: Education and Advocacy for the 2007 Farm Bill,” March 7-8, 2007, at the Crown Plaza in Silver Spring, Maryland. The Center for Rural Affairs is a member of the Sustainable Agriculture Coalition, and staff are active on several committees.

Meeting attendees will have the chance to hear from Congressional leaders; hear expert analysis on the 2007 farm bill; learn and share methods to organize and motivate a grassroots base; gain skills as an effective advocate; design and discuss strategies to ensure passage of legislation that supports beginning family farms and rural communities; and visit Capitol Hill to advocate for agricultural policy reforms.

For more information about the “Roots to Reform” conference, please contact Traci Bruckner at 402.687.2103 x 1016 or tracib@cfra.org.

>> On March 6, 2007, at the Sacred Heart Gym in Early, Iowa, the public is invited to “light up with hope” at a session discussing how you build a living and sustainable community from the ground up. Information and guidance will be shared on sustainable local community maintenance and development work in accord with positive human, spiritual, and moral principles and values taught in Protestant and Catholic churches.

Presenters include Dr. Fred Kirschenmann, Leopold Center for Sustainable Agriculture; Carol Smith and Brother Dave Andrews, National Catholic Rural Life Conference; and Michael Holton, Center for Rural Affairs. There is no registration and no fee – just come and bring others. For more information, call Father Marvin Boes, 712.277.2046.

Weigh Tax Cuts against the Need to Invest in Our Future

If we spend everything for immediate pleasure and fail to invest in our future, we won’t have much of a future. It’s been proven many times. Yet many who live this conservative approach in their personal lives dismiss this maxim in government. That is a mistake.

Government is the primary vehicle to come together to invest in the future of our communities, state, and nation. If we don’t invest there, we may gain personal wealth, but our communities and the common good will suffer. That is especially true in states that need to rebuild struggling rural economies.

On that basis, we disagree with those who say tax cuts are the key to our future prosperity. Nebraska Governor Dave Heineman rightly says that Nebraska must do a better job of retaining its youth. But we doubt his solution: cutting income taxes and eliminating the tax on estates, which applies only to individual estates of over $1 million or $2 million per couple.

We all like tax cuts that give us more to spend. But the immediate pleasure of tax cuts must always be weighed against the need to invest in our future. Rural states face critical needs. And we have opportunities to invest in proven strategies that work to revitalize rural communities.

Iowa for example, last year passed a tax incentives package for owners of land and other agricultural assets to beginning farmers – especially for crop/livestock share leases that reduce capital requirements and risk for beginning farmers (see more above).

The Minnesota House is considering low-interest forgivable loans up to $50,000 for dairy facilities, focused on family farm milk production rather than luring mega dairies.

Nebraska will consider increased investment in tax incentives, loans, training, and technical assistance for micro businesses and in rural community grants to support local entrepreneurship, leadership development, youth engagement, and community philanthropy.

Every state faces choices about investment in education. In the 21st century, a well educated citizenry is the most critical economic development asset a state can have.

There is a time and place for tax cuts. We favor property tax relief for modest-size, owner-operated farm and ranches and modest-income homeowners. But immediate tax relief cannot overshadow the need for investing in our future.

Most rural states face a problem. Rural areas have a relatively small percentage of their populations in their income-earning years – between 18 and 65 years of age. That means fewer taxpayers and more people needing state funds for schools, health care, and nursing homes. Until we fix that, our fiscal houses will be on shaky ground.

The most important long-term investment states can make is in creating opportunities for young families to build lives, farms, and business in their communities.

Agree or disagree? Reply to Chuck Hassebrook, 402.687.2103 x 1018 or chuckh@cfra.org.

FEATURE ARTICLE:

MarketPlace: Opening Doors to Success

We would like to personally invite you to attend MarketPlace: Opening Doors to Success on February 28, 2007 at the Ramada Inn in Kearney, Nebraska. The Center for Rural Affairs is hosting this new one-day event to focus on proven ways to revitalize rural communities through strategies that work in rural America – growth of small businesses, agricultural entrepreneurship, and public policy that supports creating economic opportunity from within.

You will find stories of innovation and success woven throughout the program. MarketPlace attendees can participate in teach-ins focusing on financing, marketing, community capacity, innovative agricultural opportunities, small business development and public policy – 30 sessions in all. Experts in many fields such as attorneys, accountants, web designers, etc. will be available to answer participant questions.

You can also make professional contacts, network with other entrepreneurs, and locate potential customers and suppliers. With up to 50 booths filled with successful small businesses and service providers, attendees will meet exhibitors with a broad array of business and professional experience.

Entrepreneurs, farmers, ranchers, community leaders, rural developers – everyone interested in revitalizing rural communities and rural economies will find many opportunities to meet, listen to and talk with their peers, Center staff, and other experts about rural community development and issues impacting rural communities.

Act now to register yourself and a friend for the MarketPlace. Early bird registration for the conference ends on Feb. 7, 2007 – $25 for an individual and $15 for a guest. Visit the conference website at www.marketplacenebraska.org to register online. You’ll find more information about the conference online as well.

See you on February 28, 2007 at the Ramada Inn in Kearney!

Contact: Kathie Starkweather, kathies@cfra.org or 402.687.2103 x 1014 for information.

Editor: Marie Powell, mariep@cfra.org