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Managing Risks for Beginning Farmers and Ranchers
Some of the best minds in the nation focused on beginning farmer issues are coming together March 27 to share practical ways beginners can minimize risks.
The Beginning Farmer and Rancher Conference: Realities and Opportunities
will be held from 9:00 a.m. to 5:00 p.m. at the Kearney, Neb. Holiday Inn
and Convention Center on March 27, 2004.
Jamie Kroger, who registered early for the conference, said, “I wouldn’t
miss this day. Where else can I hear from so many experts and pioneers in
this field at such a reasonable cost?”
Dr. Don Jonovic is the conference’s keynote speaker. His presentation,
“Surviving Family Farming Whitewater,” will share insights developed over a
long, distinguished career focused on farm succession. Jonovic will also lead
breakout sessions on estate planning. |
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Job Opening at the Center
The Center has an opening for a Senior Leader in Rural Advocacy and
Development. The position is somewhat flexible and may include
responsibilities in communications, development, and farm and rural policy
reform. Interviews begin March 8, though the position is open until it is
filled. More information on the
Senior Leader position.
Midstates Community Development Conference March 23, 2004
Center staff and program participants will be featured in sessions on
citizen involvement and entrepreneurship at this conference, to be held at
the Marina Inn in South Sioux City, Neb.
Registration is $25 before March 15 and $35 afterward. Send registration
to Iowa State University Extension – Woodbury County, 4301 Sergeant Road,
Suite 213, Sioux City IA 51106. Make checks payable to Woodbury County
Extension. For more information, contact Dewey Teel. 402.370.4027.
New Yankton S.D. Radio Show Features Local Food
The spotlight will shine on family farms when Farm to Family Connection
begins airing Thursday mornings in March at 7:45 am on KKYA, 93.1 FM out
of Yankton.
The show focuses on family farms in Northeast Nebraska,
Southeast South Dakota and Northwest Iowa that produce and direct market
or wholesale food and farm products to local consumers. For more information, contact Laurie Larsen at the
station at 605.665.7892. |
A beginning farmer panel will share their real-world experiences in
transferring farm assets to a new generation, use of alternative markets,
challenges facing women farmers, and environmental obstacles they have
overcome. Three concurrent sessions spaced throughout the day will focus on a
wide variety of topics, including whole-farm planning, estate planning,
start-up programs, insurance, low-input systems and low-cost strategies,
contracts and asset sharing, alternative funding sources, and mentoring.
Conference registration is $30.00, which includes materials, lunch, and
refreshments at two breaks. To register, call the Center for Rural Affairs,
402.687.2100 or email Joy Johnson,
joyj@cfra.org See more information on the conference
Administration’s Budget Priorities
If you want to know what someone values, you have to look at where they put
their money. President Bush’s budget proposal speaks volumes about his
priorities. It would eliminate the Small Business Administration programs
focused on serving the smallest businesses – those with five or fewer
employees.
Those programs provide funding to intermediaries, like the Center’s Rural
Enterprise Assistance Project, to provide loans, technical assistance, and
business training to small and start-up businesses not typically served by the
regular Small Business Administration loan guarantee programs.
This is no small matter. Across the country, such businesses account for
nearly 17 percent of all private employment. Their impact is even greater in
rural areas – much greater. In the farm and ranch counties of the nation’s
heartland – Iowa, Kansas, Minnesota, Nebraska, North Dakota, and South Dakota
– self-employment in the smallest businesses accounts for three-fourths of the
net job growth over the last decade.
Likewise, the administration budget would eliminate nearly two-thirds of the
funding for the Value Added Producer Grants program that funds producer-owned
initiatives in value-added marketing and processing. But once again, the
administration has turned its back on the cut that should be made.
It refuses to support an effective cap on farm program payments to the
nation’s largest farms – payments they use to drive smaller farms out of
business. A payment cap is the single most effective thing Washington could do
to strengthen family farms, and it would save more than enough money to make
it possible to keep the valuable rural programs off the chopping block.
Money also spoke volumes recently when an Alabama jury awarded independent
cattle producers $1.28 billion in a case against Tyson Foods Inc. for
illegally depressed cattle prices through its contracts with large producers.
This case has a long way to go through appeals and legal motions. But whatever
the ultimate outcome, it says that the American people value fairness and
oppose the abuse of power by the large and wealthy.
Money does speak volumes, and it also exerts influence. But we must never
mistake that as evidence that money is the only or even the most powerful
source of influence. When the citizenry gets engaged, people trump money.
That was demonstrated in Alabama. It was demonstrated the same day in Lincoln,
Nebraska when hundreds of rural people packed the capital to challenge the
governor’s assault on Initiative 300, Nebraska’s constitutional amendment
banning corporate farming.
Now we must demonstrate it in Washington by demanding the administration and
Congress produce a budget that reflects the values of the American people.
Agree or Disagree? Send your opinion to
Chuck Hassebrook, chuckh@cfra.org or
402.687.2100 x 1018.
Appropriations Battles Foreseen
Family farm programs likely to be targeted for
cuts when Congress determines budget.
The debate over Fiscal Year 2005 appropriations will soon begin. Because of
increasing deficits and shrinking budgets, Congress is under pressure to hold
down spending on all programs with discretionary funding status. Expect an
all-out assault on farm bill programs that stand to make a difference for small
and medium-size family farmers and ranchers.
A majority of separate spending bills will likely be rolled into one large
omnibus appropriations bill. This means limited time for debate and puts
programs at risk for across-the-board spending cuts.
Under current budget pressures, program funding levels are not just being cut,
their funding status is being compromised as well, with programs going from
mandatory to discretionary funding status.
The Value Added Producer Grants program (VAPG), which provides grants to farmer
and rancher initiatives to market high-value crops and livestock, fell victim to
this process during the Fiscal Year 2004 appropriations conference committee.
This program passed in the 2002 farm bill with $40 million in mandatory funds
(meaning it should not be subject to the annual appropriations process) but was
cut to $15 million and demoted to discretionary status. We must advocate for it
to return to $40 million with mandatory funding.
The Conservation Security Program (CSP), which rewards farmers with payments for
environmental stewardship, has been attacked the past two appropriations cycles.
The popularity of the program prevailed, and full funding was reinstated.
However, we expect the battle may rise again, so we need to continue to advocate
for full funding for the Conservation Security Program.
Other valuable farm bill programs have failed to gain any funding. For example,
the Beginning Farmer and Rancher Development Program is a competitive grants
program that would provide extensive training and market development
opportunities for beginning farmers and ranchers. We will push for this program
to be funded and implemented this year.
Be ready to contact your senators and representatives to save vital programs and
restore funding to others. We’ll send action alerts as the process unfolds.
Together we can protect these programs and make a difference for family farmers
and ranchers and rural communities.
Contact: Traci Bruckner,
tracib@cfra.org or 402.687.2100 x 1016.
Economic Strategy for Rural
Survival
Assess existing markets, find niches to match,
cultivate local economic activity, and bring citizens together to create change
– a recipe for increasing rural vitality.
Before focusing on economic strategies to improve rural America, let’s set
the record straight on a few commonly held myths. First, rural America is not
mostly farming or even about farming. Though agriculture is believed to play the
largest role in rural America, only 1.78 percent of rural residents earn their
primary living from the farm or ranch.
While family farming is important in our culture and is a vital part of rural
economies, the perfect Jeffersonian model of the family farm is not dotting many
landscapes. Instead, 66 percent of rural American residents actually make their
living working in the service and manufacturing industry.
And of the 200 counties listed as persistently in poverty by the Economic
Research Service, only five are not considered rural. That leaves 195 rural
counties throughout the United States that need economic strategies that will
work.
Here is a closer look at a rural strategy with three primary focus areas.
Use niche markets to compliment existing markets. Every struggling
community must assess its existing markets. Then the community can look at
developing niche markets to compliment the existing economy.
Grow entrepreneurs from within the community. Cultivation and development
of entrepreneurs must be a priority in the economic development strategy for
small rural communities. Economic gardening is the best way to alleviate poverty
in rural areas.
Supporting cottage industries helps to curb the massive importation of goods
taking local dollars away from the region. The Internet also gives rural regions
access to markets that were previously unavailable.
Work together to improve quality of life in the community. The final
piece of this puzzle is the development of social capital. Working together to
establish housing, arts, institutions, and cultural benefits for a community’s
citizens only makes the community stronger in leadership and attitude.
Conventional economic development strategy relies on recruiting outside industry
to locate in a community for a purely financial motive. Rural economic
development strategy needs to be more creative.
We need to realize that traditional strategies generally have not worked in
rural areas. In some cases, the area ends up more damaged than before. It is the
exception, not the norm, when outside industry decides to stay, especially
during hard times.
Contact: Michael L. Holton,
michaellh@cfra.org or 402.687.2100 x
1015 for more information.
Victory for Independent Cattlemen in Alabama Class Action Suit
Verdict finds packer control of livestock illegal
under the Packers and Stockyards Act; jury awards $1.28 billion to 30,000
producers.
In the first-ever class action suit brought with the Packers and Stockyards
Act of 1921 as its foundation, independent cattlemen won a $1.28 billion
judgment against Tyson Fresh Meats, Inc.
Originally the case was filed in 1996 against IBP for violating the Packers and
Stockyards Act, which prohibits packers from employing any “unfair, unjustly
discriminatory, or deceptive practice or device” or from making preferential
agreements. IBP was purchased by Tyson in 2002, and the case became Pickett v.
Tyson Fresh Meats, Inc.
The plaintiffs are Lee Pickett (AL), Mike Callicrate (KS), Chris Abbot (NE),
Robert Rothwell (NE), Johnny Smith (SD), and Pat Goggins (MT). And in achieving
class action status during the eight-year course of the case, the plaintiffs
came to represent a class of approximately 30,000 cattlemen who sold to IBP
exclusively on the cash market from 1994 to 2002.
David Domina of Domina Law in Omaha, Nebraska, and Joe Whatley of Whatley Drake
in Birmingham, Alabama represented the cattlemen at the court proceedings in
Montgomery.
The case was brought to enforce the Packers and Stockyard Act of 1921 on the
basis that IBP used contracting with large beef producers to depress prices and
hurt the livelihoods of 30,000 ranchers who were harmed by these unjust and
illegal practices. The jury found damages to the affected cattlemen amounted to
$1.28 billion in revenue lost due to anti-competitive practices.
Michael Stumo, general counsel for the Organization for Competitive Markets
based in Lincoln, Neb., said, “The plaintiffs’ experts showed that Tyson
depressed prices by an average of 5.1 percent over the eight-year class period.
This means that Tyson received one out of every 20
cattle free due to their manipulation of inventories that allowed them to
depress prices.”
Iowa Senator Tom Harkin addressed the role Packers and Stockyards played in the
case. “After
decades of USDA and Justice Department inaction, these ranchers and cattle
feeders took on the packing industry themselves – and won,” Harkin said
following the jury’s decision.
The verdict further demonstrates the relevance and purpose of banning packer
ownership of livestock, an effort so far unsuccessful in Congress, but a reality
in Nebraska since the 1982 passage of Initiative 300. Control of supply by
dominant packers like Tyson by definition upsets the supply and demand function
of a competitive marketplace. As re-affirmed by the verdict, the very ability of
packers to hold livestock away from the open market disrupts and distorts market
pressures.
Corporate Farming Notes
Purdue University plays with models; Seaboard
sees a familiar face; and a big banker discourages bigness
A newly released study by Purdue University agricultural economists
concludes that livestock contracts and vertical integration, in place of a spot
market, can be good for hog producers and packers.
However, as pointed out by Allan Gray, one of the four Purdue economists who
conducted the study, the very possibility that the vertical integration system
encourages consolidation and could lead to a handful of companies controlling
the pork industry was not allowed in their model.
“Many people start from the premise that the packers are the smoking gun – that
the packer is a monopoly and is forcing people to move to vertical integration,”
said Gray. “So, in our study, we built a model that doesn’t allow that to
happen. Our numerical model specified that the packer has no market power. With
our model we were able to ask: if the market power issue is not there, do all
the parties involved still benefit from a coordinated production system?”
In case you couldn’t guess, Gray determined the answer in such a circumstance
was “yes” for producers and packers. The study, Evaluation of Alternative
Coordination Systems Between Producers & Packers in the Pork Value Chain, can be
found at
www.agecon.purdue.edu/staff/gray/Research/research.htm .
Source: Feedstuffs
Seaboard Corp. announced in January that its pork division, Seaboard
Farms Inc., had entered into a marketing agreement with Triumph Foods LLC
(formerly Premium Pork) to market all of the pork products produced by Triumph
Foods at a new state-of-the-art pork processing plant. Triumph is planning to
build the plant in St. Joseph, Mo.
Rick Hoffman, chief executive officer of Triumph, was CEO of Seaboard Farms
until early 2001.
Source: Feedstuffs
An observation from Wells Fargo Vice President and Agricultural
Economist Dr. Michael Swanson, of Minneapolis, at an Ag Appreciation Banquet in
Yankton, S.D.:
Most small family farms are no longer profitable. But, neither are huge
multi-thousand-acre farms.
Swanson said there’s a threshold where operation costs catch up with input,
lowering net profit. According to an Illinois study, the magic number is 1,200
tillable acres. When farm size continues past this threshold, the revenue evens
up – no matter how many acres or head of livestock are part of the operation.
Source: Yankton Daily Press and Dakotan
Contact: Brad Redlin,
bradr@cfra.org or 402.687.2100 x 1010 for
more information.
I-300
Supporters Flock to Capitol to Tell Legislators “Hands Off”
On February 17 over 400 supporters of Initiative 300 descended upon the Nebraska
State Capitol to tell their state senators “Hands Off I-300.” The occasion was
the hearing on LB 1086, a bill that proposes to create a gubernatorial-appointed
task force to determine ways to “modify” Nebraska’s anti-corporate farming
constitutional amendment.
Wearing distinctive “Hands Off I-300” badges, people from all over Nebraska
lobbied their legislators to kill LB 1086. At the hearing, representatives from
the Center, Nebraska Farmers Union, the AFL-CIO, the Nebraska Catholic
Conference, Nebraska Grange, Women Involved in Farm Economics (WIFE), the
American Corn Growers, the Organization for Competitive Markets, and the Sierra
Club all testified about the positive aspects of I-300 and the Pandora’s Box
that would be created by opening I-300 for changes.
Dr. William Heffernan of the University of Missouri testified as to the unique
position Nebraska enjoys in providing agricultural structural and market access
advantages compared to other states. Several farmers and ranchers – including
beginning farmers and ranchers – testified to the positives of I-300 and the
fact that I-300 has not acted as a barrier in their operations (contrary to the
assertions of many proponents of LB 1086).
All the testimony at the LB 1086 hearing was on top of thousands of letters,
calls, and faxes people throughout Nebraska made to their state senators, and
the letters appearing in Nebraska papers for weeks on the positives of I-300 and
the dangers of LB 1086. This activity shows the power of an engaged citizenry,
and we compliment the efforts of everyone.
The Agriculture Committee passed an amended bill to the full legislature. Look
for more information next month.
Contact: Jon Bailey,
jonb@cfra.org or 402.687.2100 x 1013, for
more information.
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Feature article:
The State of Rural America
Difficult times test our mettle and our
character. The prairie pioneers faced difficult times. For them, wrote Willa
Cather, “Attainment of material prosperity was a moral victory, because it was
wrung from hard conditions … was the result of struggle that tested character.”
Today, the true test of rural America is whether we can find the spirit and
character of our pioneer ancestors; whether we can persevere through difficult
times to work with our neighbors to create new farms, new businesses, and a new
basis for strong communities.
Hard Work, Guided by Values
That’s hard work. It requires us to do things that make us uncomfortable. It
requires us to balance pursuit of self-interest with a commitment to the common
good. To create the kind of communities we really want, we must be guided by
values that reflect the best in rural America – responsibility, citizenship,
fairness, opportunity, widespread ownership, and stewardship.
That’s not only the right thing to do; it’s the only practical way to build
strong communities. America and its communities are strongest when all have
access to genuine economic opportunity – to earn decent incomes, own assets,
gain control of their lives, put down roots, and become contributing members of
a community.
When people gain a stake, they gain the capacity to give back and a reason to
take responsibility for the future. If America and its communities are to be
strong, they must be fair and just.
Strong communities are critical in part because people treat each other better
when they live in communities with strong ties. People are more likely to help
each other because they know if they are there for their neighbor, their
neighbor will be there for them. They also know that mean and selfish behavior
won’t be forgotten.
We often talk about rural values – responsibility, work ethic, community, and
caring about our neighbors. But these are not rural values per se. There are
rural areas where they are not strongly held.
They are values nurtured when people live in strong communities and have the
opportunity to gain a stake. If we want strong values in America – we must build
strong communities and ensure all people access to genuine opportunity.
The Center for Rural Affairs uses several core strategies to achieve our vision
of opportunity and strength.
End Bias towards Bigness
First, we work to reverse the bias toward bigness in public policy. Some say we
cannot do anything about that – rural people are too small a percentage of the
population. But that is wrong.
The fact is that we are the only ones who can change the bias toward bigness in
farm and rural policy. Urban policymakers did not force that bias on us.
It came from agriculture committees of Congress and representatives of rural
districts influenced by agricultural organizations that represent the vested
interests of the wealthy at the expense of the common good. Only we can hold
them accountable, and only we can take back control.
That is what we need to do on Initiative 300 – Nebraska’s constitutional ban on
non-family corporate farming. It’s under attack by Nebraska Governor Mike
Johanns. We must flood the governor’s office, our senators’ offices, and the
newspapers with letters.
Likewise, we must build citizen pressure for a new federal farm and rural
policy. President Bush’s budget proposal cuts the programs most critical to our
rural future.
He would eliminate the program within the Small Business Administration that
supports the smallest businesses – those with five and fewer employees. These
businesses account for three-fourths of the net job growth in the farm and ranch
counties of our region.
He would cut almost two-thirds of funding for the Value Added Producer Grants
program. It makes grants to help farmers and ranchers capture a fairer share of
the profit in the food system by establishing new marketing cooperatives and
value-added processing.
Work County by County
The administration makes these cuts so they can afford to keep the big checks
flowing to the nation’s largest farms and wealthiest landowners to subsidize
them to drive their neighbors out of business – and avoid imposing an effective
farm program payment limitation.
Only we can change that. We must take back control of agricultural organizations
county by county and state by state. We must reinvigorate democracy house by
house – by inviting neighbors to our homes to write letters, organize meetings,
and hold our elected officials accountable until we get a federal budget that
invests in creating a future for rural America rather than subsidizing its
destruction.
Work in Community
Our second core strategy is to apply the same kind of citizen action right in
our own communities. In the book Rural Communities, sociologist Cornelia Flora
writes that communities succeeding in rebuilding themselves are those where
people work together to pursue the common good.
They accept differences of opinion rather than fighting over them. They embrace
diversity and involve newcomers. And they create a community ethic where people
are encouraged and expected to give back.
The Center’s Project HOPE brings that approach to over a dozen communities. We
bring community members together and help them develop leadership skills and
work together to strengthen their community. Likewise, our Land Link program
challenges retiring farmers to give back – to help their community by giving a
young farmer a chance to get started.
Create Your Own Chance
Our third strategy is to help rural people take responsibility for creating
their own opportunities by supporting entrepreneurship. Our Rural Enterprise
Assistance Project (REAP) has assisted nearly 3,000 rural small businesses with
loans, technical assistance, and business training.
We are developing new ways for small businesses to work together. In Italy,
major metropolitan corporations routinely turn to a flourishing network of small
rural businesses to buy out-sourced goods and services. We are launching an
effort to build that in Nebraska and ultimately expand it to other states in the
region.
We are increasing our small business development services to the growing
Hispanic community in rural Nebraska. We must reach out to these new neighbors,
make them part of our communities, and invite them to work with us in building a
better rural future.
A Premium for Environment
Fourth, we work to increase the farm and ranch share of food system profit by
turning public concern over the environment and how food is produced into an
opportunity.
The Small Farms Cooperative – composed of about 50 Nebraska family farmers – is
exporting beef at a premium price to the European Union even as U.S. beef
exports have elsewhere come to a standstill in the wake of the mad cow scare.
The cooperative offers the product the European consumer wants, hormone-free
beef, from a source it trusts.
We are working to build a multi-state cooperative to serve as the nation’s
principal source of natural livestock produced on environmentally responsible
family farms and ranches. It would collectively market and bargain to gain
premium prices for producers who provide what consumers want.
We are also working to turn environment into an income opportunity by working
with farmers to build soil organic matter – to provide a model of how society
will one day pay farmers to counter global warming by reducing carbon dioxide in
the atmosphere.
And we are fighting for full and effective implementation of the Conservation
Security Program – the most exciting new element of the 2002 farm bill. It pays
farmers and ranchers based on how much they do to protect the land and water,
creating a strong basis for society to support family farm and ranch income.
It’s What We Build
When I came to the Center more than 27 years ago, I saw our work as saving
family farming and rural communities as we knew them.
But now I see it differently. The question is not what we save. It is what we
build – whether we create a new basis for strong rural communities, small
businesses, and family farms and ranches that provides genuine opportunity and a
fair stake for rural people.
Such questions are never answered for good because every time we find the
answer, greed ultimately takes over and we have to relearn the lesson. That is
the Old Testament story.
It began with the promise to deliver Israel from slavery to a land where each
family would own the land they worked and enjoy the fruits of their labor. But
when the promise is fulfilled, the prophets must constantly remind the people of
Israel that those who were the oppressed must not become the oppressors.
Their story is similar to our story – the descendents of the pioneers who came
to prairies in search of opportunity. They began in Europe as serfs working the
land of feudal lords. They came to America for the opportunity to own the land
they worked.
History Is Cyclical
The farms and communities they built are fading. The decision we face is what we
build to take their place. Will we stand by and allow the emergence of a
corporate system much like the feudal system they left behind, but with a modern
face?
Or will we build a system that reflects the values of the family farms and rural
communities they built, where those who work the farms and business have the
opportunity to own them and enjoy the fruits of their labor.
History is cyclical. Over and over people decided that longstanding trends had
gone too far – did not serve the common good – and they have taken steps to
create something new. And we can do it too.
Contact: Chuck Hassebrook,
chuckh@cfra.org or 402.687.2100 x 1018 for
more information.
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