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Therefore, Nebraskans need to save I-300 by modifying it to allow more corporate enterprises before some unknown person or persons subject it to the same legal death as Amendment E. I-300 needs saved from itself by making it more “corporate friendly.”

This argument ignores the differences between I-300 and Amendment E; the 21 year history of I-300; and that I-300 has survived unchanged every legal challenge it has ever faced, including approval from the same court that ruled Amendment E unconstitutional.

I-300 is renowned as one of the nation’s best examples of citizen democracy. Yet some opponents have never gotten over its enactment and have been waiting for an opportunity to damage it. They have now been handed two golden opportunities and will take every advantage.

The anti-I-300 push is the latest example of what columnist Alan Geubert calls a “state-by-state march” of an “ongoing corporate assault to integrate family-owned farming assets into the global food machine.”
In 2003 we witnessed attacks against local zoning, corporate farming laws, and other laws friendly to family-scale agriculture in state legislatures all across the Midwest (see July 2003 newsletter). Nebraska and I-300 are the biggest and most important prizes remaining in this offensive.

This is a call to arms for all supporters of I-300 and family-scale agriculture. Over the next several months we will provide you with evidence of the effectiveness of I-300, why it is needed, and how you can help save I-300.

Contact: Jon Bailey, jonb@cfra.org or by phone, 402.846.5428 x 26. Look for the Center’s series of articles on I-300 beginning next month. — ed.

Subscribe to the Center’s electronic Nebraska Legislative Update
The Center will again provide our free Nebraska Legislative Update, a weekly email dispatch providing timely information on bills, hearings, and other happenings in the Nebraska Legislature as well as opinion and perspective from the Center. To subscribe, send an email to Jon Bailey at jonb@cfra.org and ask to be added to the mailing list.

Payment Limit Commission Report
Stacked with opponents to reform, the federal commission’s report falls short.

The report of the federal Commission on the Application of Payment Limitations to Agriculture includes good and bad recommendations, which is the best that could be expected.

Reform opponents created the Commission in the 2002 farm bill as an alternative to real reform. Its makeup was heavily weighted from the start. Though Senate Agriculture Committee Chair Tom Harkin appointed three payment limitations supporters, the Secretary of Agriculture and House Agriculture Committee appointed the majority and chose reform opponents.

The report acknowledges the obvious. The current payment limitation has almost no impact. Very few farms are affected. If meaningful limits were implemented, cash rents and land prices would rise less. Though the report does not directly say it, slowing land price inflation is essential to improving farm profitability.

Unfortunately, the Commission denied the obvious on rural community impacts of payment limitations. It said they would hurt communities in the short term by reducing the payments coming in, and there was no evidence that keeping more farmers in business would be good for rural communities.

There were useful recommendations. The report endorsed tightening farm program eligibility by requiring payment recipients (except crop share landlords) to engage in labor on the farm. That is essential. Without it, there will be no end to the creation of paper farmers to qualify for additional payments.

The report recommended that future rules favor no form of business organization (corporation, proprietorship, partnership, etc.) over another. That is reflected in the reform legislation proposed by Senator Chuck Grassley.

Consideration of different payment limitations by crop was recommended. That could be justified, if real limits were implemented. It takes fewer acres for cotton and rice farms to hit a given payment level because they receive more money per acre.

Opposing views on two of the biggest issues – whether large farms that divide into several corporations should continue receiving more than the stated limits, and whether unlimited generic certificates should continue to provide a gaping loophole in the limit on loan deficiency payments were presented.

There was one maddening recommendation in the report – that payment limitation reform be deferred until the next farm bill. That is unjustified.

Currently, Congressional appropriators are cutting programs vital to family farms and rural communities to meet tighter spending limits. Family farms and rural communities should not suffer disproportionately to hold mega farms harmless from budget cuts.

The report is available at http://www.usda.gov/oce.

Contact: Chuck Hassebrook, chuckh@cfra.org  or 402.846.5428 x 28 for information.

Gardening with an Economic Twist
Cultivating growth from within produces rural economies rich in possibility.

Economic gardening is a process coined in the 1990’s that describes the theory of cultivating entrepreneurial efforts locally. Economic development must come from the inside out in this method.

Traditional economic developers have looked at recruiting industry to an area for growth. There is a dark side to this process. When branch plants of main industry base their competitiveness on low prices, low wages follow.

Rural communities that supplied cheap land, free buildings, tax abatements, and especially low-wage labor would win the “recruiting game.” The branch industry stayed as long as costs stayed low.
As quality of life and standards of living rose, companies would pull out to go where the costs were lower, eventually considering a move to developing countries.

In short, economic gardening development looks at the businesses a community has and uses local government resources to help them grow. Communities invest their taxpayer economic development funds not in branch plant attractions, but in local business cultivation.

Remember, this isn’t a struggle between small companies vs. large companies. If the gardening techniques are used appropriately, small local businesses can become large companies. The real crux of the theory is the rate of growth.

As Nebraska begins the debate over tax incentives and how they are used to attract job growth in our state, it may not hurt for legislators to look at economic gardening and work more closely with our entrepreneurial assets to save our small communities. In the long run, it is a win-win situation for everyone.

Contact: Michael L. Holton, michaellh@cfra.org for more information on community revitalization.

Corporate Farming Notes
Bidding war possible for Farmland Foods; audit could not substantiate USDA’s COOL claims; and Monsanto finds a fight in Maine.

On the day of the deadline to do so, Cargill Inc. entered a bid to purchase the assets of Farmland Foods’ pork processing business, offering $385 million to top the $363.5 million bid by Smithfield Foods Inc. The Cargill bid will lead to an auction overseen by the U.S. Bankruptcy Court. The price could escalate at the auction, expected in early October.  Source: Associated Press

The non-partisan General Accounting Office (GAO) reported that USDA cost estimates of the new country of origin labeling (COOL) program are “questionable and not well supported.” USDA estimated the cost of the paperwork for the first year of the program would be $1.9 billion. The GAO’s report said USDA “could provide no documentation to support its estimates.” It assumed an hourly rate of $50 for processors to develop and keep a record system, which was more than double the rates USDA used in recent estimates for other programs.

Sens. Tom Daschle and Tim Johnson, both D-SD., and Mike Enzi, R-WY, said the GAO report is ammunition against House legislation that would cut off funds to the labeling program before it starts.  Source: Associated Press

Monsanto, the giant corporation with over $4 billion in annual income, has sued a dairy in Maine over its use of food labeling. Family-run Oakhurst dairy has received a large outpouring of support from across the country in its free speech fight with the chemical company.

The case centers entirely on the dairy’s use of the slogan “Our Farmers’ Pledge: No Artificial Growth Hormones.” Monsanto argues that no scientific evidence exists to prove milk from cows treated with the hormones differs from milk of untreated cows, and that the slogan confuses consumers into staying away from milk from those cows.

“It’s our right and obligation, as I see it, to keep people informed as to what is and what isn’t used in the production of the foods they consume,” said Oakhurst’s owner. “All of the responses are supporting our position and suggesting we fight the good fight and don’t buckle under.” Source: Portland (ME) Press Herald

Contact: Brad Redlin at bradr@cfra.org or 402.846.5428, extension 24.

Value Added Producer Grant Proposals Due

Grant proposals for the Value Added Producer Grant program are due at your state USDA Rural Development office by 4:00 p.m. on October 20, 2003.

An amount of $27.7 million is available to assist independent producers, agricultural producer groups, farmer or rancher cooperatives, and majority-controlled producer-based business ventures in accessing new and emerging domestic and international markets. Funds are available for working capital, feasibility studies, or business plans.

This grant program requires a 50 percent match. The maximum grant is $500,000, with priority points given for smaller projects to distribute funds across various types and scales of enterprise. The Notice of Funds Availability (NOFA) is nearly identical to last year.

USDA’s website has had trouble with the recent onslaught of viruses, but you can find the NOFA and forms posted on the following website for the 2002 program: http://www.rurdev.usda.gov/rbs/coops/vadg.htm  (click on “Application” button for forms SF 424, SF 424A, and SF 424B).

One change this year, a Dun and Bradstreet (D&B) Data Universal Numbering System (DUNS) is required by all applicants for federal grants. Organizations can receive a DUNS number free by calling 1-866-705-5711.

Individuals who would personally receive a federal grant are exempt from this requirement. You can also contact your state Rural Development contact person for the VAPG program. All state contacts are listed in the NOFA at the above website.

Contact: Kim Leval, 541.687.1490 or kimleval@qwest.net for more information on the VAPG program.

Looking for Success Stories from across the Midwest and Great Plains

We are looking for strategies, initiatives, and projects that help sustain small communities and rural life to be included in a new report. These “best practices” might include:

• Community development efforts based on the environment.
• Community-wide initiatives employing improved quality of life variables as an economic development strategy.
• Strategies from small and moderate-sized farms and ranches to capture premium prices by forming cooperative arrangements, tapping into niche markets, or processing and direct selling their products to the consumer.
• Community support for local farmers and ranchers.
• Systems that increase the farm and ranch share of the food system profit.

We plan to include the best of these ideas in a follow-up report to our recent study of poverty in the region, Swept Away: Chronic Hardship and Fresh Promise on the Rural Great Plains. Please relay your ideas to Kim Preston: by phone, 402.846.5428, x 31; by email, kimp@cfra.org; or by postal mail, Center for Rural Affairs, PO Box 406, Walthill NE 68067.

Seed and Breed Research Summit
National summit brings together advocates for publicly funded research and education.

Reinvigorating publicly funded plant and animal breeding programs and maintaining plant seeds and animal breeds in the public domain were central topics of a heady summit held September 6-8 in Washington, DC.

Patent and ownership laws, while diffusing knowledge more broadly, are raising concerns that an imbalanced research agenda has resulted. This has led to greater consolidation of germplasm in private hands and neglect of cropping and livestock breeding problems of concern to the public.

Public plant and animal breeders, non-profit representatives, policy-makers, lawyers, and others discussed the decline in public funding and rise in private funding for plant and animal breeding research at the summit. Of particular concern, private interests look to fund research that will result in lucrative technologies that can be patented and sold for royalties. Less lucrative long-term and systems research may not be adequately funded.

This public divestiture in plant and animal breeding also impacts education and training of the next generation of breeders. Education programs are not adequately funded, and public research institutions are losing trained staff to private companies.

The consensus emerging from the summit was that short, medium, and long-term strategies are required to ensure support for programs of interest to the greater public, including family farmers and ranchers and consumers.

The summit planning committee was led by Michael Sligh of the Rural Advancement Foundation International (RAFI) and included Kim Leval, policy analyst with the Center. The group forming from the Summit will meet again to unite policy and other efforts to increase funding for public plant and animal breeding.

The group is encouraging Congress and USDA to support public plant and animal breeding within the National Research Initiative (NRI). The Initiative for Future Agriculture and Food Systems (IFAFS) was recently absorbed into the NRI with a promise that 20 percent would be directed toward IFAFS areas including farm and ranch profitability, natural resource conservation, and rural policy research.

The 2003 NRI call for proposals did not reflect this promise. Those at the summit agreed that the “IFAFS-like” areas of NRI should receive adequate funding and should include public plant and animal breeding as an important topical area for funding.

Contact: Kim Leval, kimleval@qwest.net or 541.687.1490 for more information. Read Kim's working paper on a Public Plant and Animal Breeding System.

Course Starting Soon Teaches Agricultural Business Success
A nationally recognized workshop is returning to teach another group how to get more for their quality agricultural products.

The Nebraska EDGE class called “Tilling the Soil of Opportunity” will provide participants with skills to better manage an agricultural business. The 10-session course will be held at the Loess Hills RC&D in Oakland, Nebraska and will be coordinated by Joy Johnson from the Center for Rural Affairs.

Johnson has coordinated previous sessions and believes the class is a true opportunity for interested entrepreneurs. Last winter’s class examined conventional and alternative enterprises, completing formal plans for new enterprises of grapes, agri-tourism, nuts, goats, and community supported agriculture businesses.

“Successful businesses plan for their success; this is the course to help you to become a business success,” said Johnson. “This course will assist farmers and ranchers to take control of immediate and future outcomes of their operations.”

Participants will develop an agricultural business plan to identify resources, integrate short- and long-term goals, develop consumer-directed marketing strategies and set financial targets.

Interested parties may sign up now for the “Tilling the Soil of Opportunity” course scheduled to start on November 4, 2003 by calling the Center at 402.846.5428. A registration fee of $350 is required.

The Northeast Nebraska Coalition works in partnership with the University of Nebraska, Nebraska EDGE Program, to offer the training course. The course is also sponsored by the Center, Heifer International, and the Nebraska Loess Hills RC&D.

The Nebraska EDGE (Enhancing, Developing and Growing Entrepreneurs) is the umbrella organization for rural entrepreneurial training programs hosted by local communities, organizations, and associations.
Since 1993, the Nebraska Edge has assisted more than 1,700 individuals, entrepreneurs, small business owners, and their partners start and improve their businesses. For more information check out the web site for the Nebraska EDGE at http://nebraskaedge.unl.edu.

Class graduates may be eligible to receive a Living Livestock Loan, an interest-free loan for breeding stock. The Living Livestock Loans are made possible through a partnership with Heifer International. Contact Joy Johnson for more details on the new program (see contact information below).

Contact: Joy Johnson, joyj@cfra.org  or 402.846.5428 x 22 to register for the Tilling the Soil class

Farm Program Pilot to Help Retiring Farmers & Ranchers
A private contract sale of farm and ranch land to a beginning farmer is guaranteed under a new pilot program available in six states.

The Farm Service Agency (FSA) recently announced funding for the new Beginning Farmer and Rancher Land Contract Guarantee Pilot Program, passed in the 2002 farm bill. The pilot program will be available in Iowa, Indiana, North Dakota, Oregon, Pennsylvania, and Wisconsin.

The concept for this program was forwarded by the Center, the Midwest Sustainable Agriculture Working Group and the Sustainable Agriculture Coalition. Senators Tom Harkin (D-IA) and Richard Lugar (R-IN) sponsored the measure.

The program is based on the understanding that retiring farmers and ranchers naturally want to help young people enter farming. The new program encourages private transfers because it provides the retiring landowner a guarantee on contract land sales.

Retiring farmers and ranchers tend to shy away from private contract land sales because they fear putting their income source at potential risk. The land contract guarantee will help to remove that barrier and allow retiring farmers and ranchers to welcome a new generation onto the land.

Agriculture has a critical need to foster new farming opportunities. Evidence shows:

• The farmer “replacement” rate has fallen below 50 percent.
• Twice as many farmers are over 65 as under 35 years old.
• Nearly half of all U.S. farm operators are over 55 years in age.
• Nearly three-fifths of all farm assets are owned by those 55 and older.

Traditional methods of farm entry and farm succession are no longer adequate to meet current challenges. This land contract guarantee will explore a new approach.

Under the program, FSA will provide the seller a “prompt payment” 10-year guarantee that will cover two annual payments or an amount equaling two annual payments. The guarantee will also cover two years of taxes and insurance.

The program will provide guarantees for five loans per year made by private sellers for contract land sales to beginning farmers and ranchers in each pilot state.

For more information: Retiring farmers and ranchers in pilot states should contact their local FSA office. You may also contact Traci Bruckner at the Center, tracib@cfra.org or 402.846.5428 x 21.

Advisors Sought for a New Regional Cooperative
Ranchers and farmers can help us shape a new livestock marketing organization by volunteering to serve on the board.

The Center is looking for people willing to build a new type of organization to benefit all family farms and ranches. We are forming an advisory team to guide first steps in a multi-state livestock marketing organization.

During the past year, we have written extensively about establishing a regional marketing cooperative to represent family farmers and ranchers. Such an organization would set market standards to maintain the high quality and special attributes produced on farms run by families who care for their livestock, land, and communities. The organization could pool livestock from individuals and small cooperatives into larger quantities to meet larger markets, often located on the coasts.

The driving force behind a regional cooperative must come from farmers and ranchers themselves. We are forming a board to define the organization and its product standards. We’ll use those guidelines to start discussions with potential markets and build a plan for the business. When the plan shows a promising direction, we’ll build a formal organizational board to carry out the plan.

More discussion of this regional cooperative is in our newsletter back issues. Look for the August 2003 newsletter feature A New Kind of Regional Cooperative. Now is the time to get involved.

Contact: Michael Holton (michaellh@cfra.org or 402.846.5428 x 27) or Wyatt Fraas (wyattf@cfra.org or by phone in our Hartington, Nebraska office, 402.254.6893) with your interest.

Rural America’s True Competitive Advantage
Entrepreneurial character, strong education, and ties to the community are the rural building blocks.

Rural America will not survive by luring factories searching for cheap labor. Even Mexico cannot win at that game. Factories are closing there in the face of lower wage competition from China.

Thirty years ago, wage levels were the competitive advantage of Rural America. Today, we must find a different competitive advantage.

The new competitive advantage of Rural America is the entrepreneurial bent of rural people; their work ethic, motivation, and skills. A strong educational system is critical in realizing those advantages.

We can only maintain our living standards in a globalizing economy if our workers, small business people, and farmers are more skilled and productive than low-wage workers in the developing world.

Development of self-employment opportunities and locally-owned small business development is also essential. Small business is more responsive than big companies and can find opportunities that big companies with big overseas plants will miss. And when local entrepreneurs find those opportunities, they will probably remain in the community because it’s their community. It’s where they want to be.

Finally, the motivation and responsibility that come from ownership can be a competitive strength for rural communities – where self-employment levels have always been high. Helping rural people start small businesses is one way to tap into that. Employee ownership plans are another way to nurture the sense of responsibility and motivation that have drawn many employers to rural workers.

What can community leaders and state policy-makers do? First, provide support to local people starting small businesses – lending, technical assistance, training, and marketing. Communities must make use of such programs and policy-makers must fund them.

We have to invest in education, including building entrepreneurial training programs in rural schools. Our education system is our greatest competitive advantage.

We can help family farmers and ranchers move beyond production of cheap commodities for international markets. A better alternative is to tap high value specialty markets that pay a premium for products with unique attributes or products produced in ways that consumers support.

We should redirect our publicly funded research programs for agriculture and business. We must refocus our research on production systems and business models that use the management and skills of highly motivated and well-educated owner operators to cut costs, add value, and gain a competitive advantage.

Developing industrialized models based on large-scale production and unskilled labor ultimately leads to farms and businesses moving offshore in search of cheap labor.

Contact: Chuck Hasebrook, chuckh@cfra.org with your opinion.

Editor: Marie Powell