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G-8 (Food Aid, Trade); Climate Bill; CFTC Issues; ACRE; and Animal Agriculture
G-8: Food Aid
Peter Baker and Rachel Donadio reported in Saturday’s New York Times that, “President Obama told African countries on Friday that the legacy of colonialism was not an excuse for failing to build prosperous, democratic societies even as he leaned on the world’s richest nations to come up with billions of dollars more to feed the hungry.
“Just hours before he arrived here to begin his first trip as president to sub-Saharan Africa, Mr. Obama made a personal appeal to other leaders of the Group of 8 powers meeting in L’Aquila, Italy, for larger donations to the aid effort, citing his own family’s experiences in Kenya. As a result, the initiative grew from $15 billion over three years, which was pledged coming into the summit meeting, to $20 billion.”
The Times article explained that, “The food aid initiative, agreed upon at the Group of 8 summit meeting, is intended to transform traditional aid to poorer countries beyond simply donated produce, grains and meats to assistance building infrastructure and training farmers to grow their own food and get it to market more efficiently.
“Despite Mr. Obama’s efforts to boost the program, it remained unclear how much was actually new money.”
Saturday’s article added that, “Daniel M. Price, who was President George W. Bush’s chief Group of 8 negotiator, said the initiative built on progress made in recent years, but faced some of the same challenges.
“‘Two significant obstacles are Congressional resistance to local purchases for food aid and European resistance to opening their markets to the products of biotechnology,’ said Mr. Price.”
Bloomberg writer Steve Scherer reported on Friday that, “‘There is an urgent need for decisive action to free humankind from hunger and poverty,’ the G-8 said in a statement. ‘Food security is closely connected with economic growth and social progress as well as with political stability and peace.’
“The investment program would help farmers gain access to seeds and fertilizer and promote regional trade agreements and marketing of modern high-yield agriculture. Countries would come up with their own plans, then the World Bank, G-8 contributors and international food-relief organizations would approve them and allocate money, according to the statement.
“‘The purpose of aid must be to create the conditions where it is no longer needed,’ Obama said. ‘To help people become self sufficient, provide for their families, and lift their standards of living.’”
Michael A. Fletcher reported in Saturday’s Washington Post that, “The expanded commitment to food security — up from a $15 billion pledge that Obama secured in the spring during a meeting with world leaders — comes as the global recession and still-high commodity prices have pushed food costs 40 percent above historical levels and have left as many as 100 million people at risk of abject poverty, according to the White House.”
Will Connors and Sarah Childress reported in Saturday’s Wall Street Journal that, “Despite his popularity, in some ways, Mr. Obama will have a tough act to follow in Africa. President George W. Bush orchestrated the most aggressive aid campaign to African countries in U.S. history, enacting the $15 billion President’s Emergency Plan for AIDS Relief. Most health experts consider the plan — which raised some reservations with its emphasis on abstinence-education programs — a resounding success.”
And Peter Baker reported in yesterday’s New York Times that, “President Obama traveled in his father’s often-troubled home continent on Saturday, where he symbolized a new political era but brought a message of tough love: American aid must be matched by Africa’s responsibility for its own problems.
“‘We must start from the simple premise that Africa’s future is up to Africans,’ Mr. Obama said in an address televised across the continent. For all its previous sins, he said, ‘the West is not responsible for the destruction of the Zimbabwean economy over the last decade, or wars in which children are enlisted as combatants.’
“To build a prosperous future, he said, Africa needs to shed corruption and tyranny and take on poverty and disease.”
In related editorial opinion regarding food aid issues, The Financial Times opined on Friday that, “The best use of the [G-8 $20 bn commitment] fund would be to support agronomy research and education in poor countries. Such knowledge is an international public good; public or charity support made possible the ‘green revolution’ in Asia and similar boosts in farm productivity in the now-rich world. Greater climatic variety means funding is even more important in Africa.
“But research and capital investment will disappoint as long as global food markets remain distorted. Richer countries must eschew bilateral barter deals and end their shameful agricultural subsidies – especially those taking the form of in-kind food aid. While aid cannot be stopped while people’s lives depend on it, it should be shifted into cash so recipients can buy food from the sources they see fit – including local production.”
The Washington Post editorial board noted on Saturday that, “Food prices have moderated considerably since a year ago, when a sudden spike in the cost of staples triggered riots from Haiti to Egypt. Yet food security in many poor countries remains precarious; the global economic crisis has pushed 100 million more people into extreme poverty, raising the number worldwide to 1 billion, according to the United Nations. President Obama was right to emphasize the issue at the recently concluded Group of 8 summit in L’Aquila, Italy. U.S. leadership produced a $20 billion, three-year food security commitment from the assembled leaders.”
The Post opinion item added that, “Even if Congress fully funds the new program and every dollar is spent as intended, more must be done to help poor countries escape the cycle of hunger and aid dependency. The United States must foster markets by allowing relief agencies to spend U.S. aid money on food grown in poor regions abroad, not just in America. President George W. Bush recommended such a reform, only to be shot down by the farm lobby and its allies on Capitol Hill. And the developed world must open its markets to products from the developing world. The moribund Doha round of free-trade talks must be revived, as the G-8 leaders also promised this week. After all, the Doha round was inaugurated eight years ago as the ‘development round’ precisely because its goal was to eliminate poverty through trade, not aid. That objective remains unfulfilled and no less urgent.”
G-8: Trade
Reuters writers Laura MacInnis and Darren Ennis reported on Friday that, “The world’s most powerful countries have injected momentum into long-running negotiations over a new global free trade pact by setting a 2010 deadline.
“Diplomats said they expected a full calendar of meetings between trade ministers and other officials in the coming months in response to the new target date for completion of the Doha round announced by the G8 plus leading emerging states.”
The Reuters article noted that, “Several negotiators said the United States and India, which caused a July 2008 WTO ministerial meeting to fail because of a disagreement over protections for poor-country farmers, needed to show they were willing to make new offers.
“‘The U.S. position is not clear yet, nor is the extent to which India can offer more,’ said a trade official from a developed economy, who asked not to be named. Both countries have had a change of government since last year’s collapse.”
The New York Times editorial board weighed in on this issue in Saturday’s paper, noting in part that; “There are few things that could do more damage to the already battered global economy than an old-fashioned trade war. So we have been increasingly worried by the protectionist rhetoric and policies being espoused by politicians across the globe and in this country.
“Against this bleak backdrop, it is especially good news that the world’s leading developed and developing nations have committed to complete a stalled global trade agreement (the so-called Doha Round) by next year. For that to happen, leaders — especially in the United States, Europe, India, China and Brazil — are going to have to muster real sense and political courage.”
The Times added that, “There is no guarantee that a deal can be pulled off. President Obama will have to provide lots of leadership to convince developing countries to make serious offers on market access, and to convince reluctant members of the United States Congress — notably those within his own party — that they will have to make concessions, too.”
“The rich West will also have to give more. The United States and Europe must slash agricultural subsidies more aggressively and refrain from adding more. The United States will have to reduce its own agricultural barriers — such as the one against Brazilian ethanol. It might have to offer more visas to professionals from countries like India.” The Times editorial said.
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In other trade developments, DTN Political Correspondent Jerry Hagstrom reported on Friday (link requires subscription) that, “The House of Representatives may be headed for a confrontation with the Senate and Obama administration over the issue of chicken imports from China.
“The $123.8 billion Agriculture appropriations bill passed by a vote of 260-161 with no significant changes from the measure voted out of the House Appropriations Committee, It covers farm programs, food stamps, food safety, agricultural research and other agriculture-related programs for the fiscal year that begins Oct. 1. The Senate has not taken up the bill, but the Senate Appropriations Committee has passed its version.
“The House bill extends a two-year ban on the importation of processed poultry meat from China, but the Senate version of the bill contains a provision that would allow the imports if China takes certain ‘special measures’ to ensure the safety of the meat.”
Climate Bill
J. Taylor Rushing reported on Saturday at The Hill Online that, “The refusal of China and other emerging economic powers to agree to emissions limits this week will make it tougher for key Senate Democrats to support a global warming bill.
“Both Sen. Sherrod Brown (D-Ohio) and Sen. Blanche Lincoln (D-Ark.) say they are skeptical of the climate change bill that passed the House last month. The legislation has an uncertain future in the Senate, and Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.) announced on Thursday that she is delaying the bill until after the August recess.
“Brown, Lincoln and other Democrats say the reluctance of China and India to agree to emission restrictions clearly complicates the party’s effort to pass the bill, given the likelihood that Republicans will lock down against it. Brown said it will naturally be difficult to persuade the public to support a bill that could increase costs for businesses if there’s a fear competition in China will gain an advantage.”
Stephen Power reported in today’s Wall Street Journal that, “As Congress writes legislation to fight climate change, a prominent coalition in the debate is divided over the fine print.
“The U.S. Climate Action Partnership, a broad group of businesses and environmental organizations, was instrumental in building support for capping U.S. emissions of greenhouse gases. Legislation to accomplish that goal recently passed the House and is now before the Senate.
“But as lawmakers add provisions to win over colleagues, some USCAP members are withholding their support. They say the bill is too burdensome and contains provisions that have little to do with fighting climate change.”
CFTC Issues
A news release issued on Friday by the House Agriculture Committee stated that, “Today, the House Agriculture Committee and House Financial Services Committee held a joint hearing to examine the regulation of over-the-counter (OTC) derivatives. Secretary of the Treasury Timothy F. Geithner appeared before the two committees to discuss the OTC derivative regulatory proposals the Administration released last month.
“Agriculture Chairman Collin C. Peterson of Minnesota and Financial Services Chairman Barney Frank of Massachusetts co-chaired this morning’s hearing.
“‘Several of the Administration’s key provisions regarding over-the-counter derivatives are similar to a strong, bipartisan bill, H.R. 977, which our Committee passed in February,’ Chairman Peterson said. ‘Secretary Geithner’s appearance today was informative, and I hope our two Committees can work with the Administration in a bipartisan fashion as we move forward to bringing a sense of order to the OTC markets. The failures of the institutions that dealt in these products have put the American taxpayer on the hook, so just sitting back and doing nothing is not an option.’”
Zachary A. Goldfarb reported in Saturday’s Washington Post that, “Treasury Secretary Timothy F. Geithner urged lawmakers yesterday to pass the Obama administration’s plan to regulate derivatives, the exotic financial instruments that exacerbated the financial crisis.
“Geithner told a rare joint meeting of the House Financial Services Committee and House Agriculture Committee that it was crucial that, among other things, derivatives traders keep enough money in reserve to be able to meet their obligations.”
Retuers writer Charles Abbott reported on Friday that, “Treasury Secretary Timothy Geithner told a joint hearing of two U.S. House committees that over-the-counter derivatives must be brought under federal regulation. Financial reform was a front-rank issue when Congress convened in January but was overtaken by health care reform and climate change bills.
“‘We propose to require all OTC (over-the-counter) derivatives dealers … be subject to substantial supervision and regulation, including conservative capital requirements, conservative margin requirements and strong business conduct standards,’ Geithner said in comments that acknowledged there were few limits in the past.”
ACRE
Philip Brasher noted in yesterday’s Des Moines Register that, “Would-be reformers of farm programs should take note: Farmers won’t easily part with the subsidies they’ve been getting, even if they make more money from a new program.
“Farmers are hesitant to give up one particular form of subsidies that President Barack Obama tried to slash soon after taking office — fixed, annual direct payments.”
Mr. Brasher explained that, “Last year, Congress created a subsidy program that was supposed to better protect producers against losses in farm revenue, either through poor yields or steep drops in commodity prices. In return for a guaranteed floor under farm revenue that the program would provide, growers must give up a portion of their annual direct payments.
“So far, the program has been met with a resounding ‘no, thanks,’ ‘not yet’ or indifference.
“As of Tuesday, 1,434 farms among 1.8 million eligible nationwide had signed up for the program, known as Average Crop Revenue Election, or ACRE. About one-quarter of those farms were in Nebraska, where 372 enrolled.”
Yesterday’s Register item added that, “Why the low numbers? U.S. Department of Agriculture officials and economists who are advising farmers on the program cite a combination of factors, including the 20 percent reduction in annual direct payments that farmers have to take to enroll.
“Some farmers are likely waiting to see what happens to commodity prices between now and the enrollment deadline. Recent declines in corn prices makes it more likely that corn growers would get subsidies under the ACRE program
“But the new program’s complexity is also seen as reducing the sign-up.”
Animal Agriculture
The AP reported yesterday that, “Michigan farmers and animal rights advocates are fighting over the treatment of farm animals, a conflict that ultimately may be taken to voters.
“The farm lobby is backing bipartisan legislation that would put into law the agriculture industry’s guidelines for farm animals’ health and welfare, and require audits of livestock farms. A 10-member council would review and possibly update animal care standards at least every five years and local governments would be pre-empted from setting their own rules.
“Upset by what it calls the industry’s ‘blatant power grab’ in the debate, the Humane Society of the United States is threatening a 2010 ballot initiative to give farm animals in confined spaces more room. Voters passed similar proposals in Arizona, California and Florida. Governors and lawmakers also enacted measures in Colorado, Maine and Oregon.”
The AP article added that, “The Michigan battle, along with one in Ohio, are continuations of a debate that ramped up in 2008, when the Humane Society successfully waged a ballot campaign in California giving hens, pregnant pigs and veal calves more living space. Nearly $20 million was spent for and against that proposal.”
Keith Good
