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January 2009 Archive for The Truth about Trade

RSS By: Dean Kleckner, AgWeb.com

Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.

Energy Policy 101

Jan 30, 2009
So much for global warming: The winter of 2008-09 is shaping up as the coldest in about a decade. The Chicago Tribune reports that home heating use has risen by more than 20 percent in the Windy City.
Chicagoans should be glad they don’t live in Eastern Europe. Earlier this month, Russia shut off its supply of natural gas, ostensibly in a dispute over prices with Ukraine. For about two weeks, hundreds of thousands of homes and factories lost heat. And in Ukraine and Romania, production of nitrogen fertilizer – which uses natural gas as its main ingredient – practically came to a grinding halt.
The rest of us ought to pay close attention, because volatility in the energy markets not only threatens to give us the chills--it also endangers fertilizer supply and therefore our ability to produce crops at a time when putting food in our bellies costs more than ever.
We know that the United States needs a comprehensive energy plan. “We will harness the sun and the winds and the soil to fuel our cars and run our factories,” promised President Obama in his inauguration address last week.
We hope to harness the sun with solar panels and the winds with giant turbines. We can harness the soil, too, by planting crops that will be used to produce biofuels.
But the effort to produce biofuels requires fertilizer--something that our crops must have in order to grow. These crops include everything from the sweet corn we eat in the summertime to the switchgrass we hope to convert into a dynamic source of energy. And production of fertilizer, in turn, requires natural gas.
The bottom line is that any serious effort to develop an energy plan must consider natural gas and its important role in ensuring the American farmer’s ability to buy and use fertilizer.
Fortunately, the Russians can’t shut off a natural-gas pipeline to the United States, as they did with Europe. We don’t depend on Russian natural gas. If we did, the Russians would try to intimidate us with this blunt weapon every time our leaders disagreed over Russian aggression in Georgia or American anti-ballistic missiles in Poland. We have our own sources of natural gas.
This apparent benefit masks an even greater vulnerability, however.   Although nearly 80 percent of all U.S. nitrogen fertilizer demand was once supplied by plants within our borders, today only 40 percent of U.S. nitrogen needs can be supplied by our own producers. Our heavily increased reliance on foreign supply is due in part to the decision of foreign governments, including Russia, to subsidize their fertilizer producers or the gas they use to make it. This has made it harder for U.S. producers to compete, and many have gone out of business. 
As a result, U.S. farmers like my brother Joe and I are heavily dependent on fertilizer made elsewhere and imported by conventional methods of commodity transportation--an approach that’s sensible given our limitations, but one that also imposes unique challenges and risks. Responding to this challenge requires a sound energy policy and adherence to fair trade principles to ensure we do not become even more dependent on foreign supply.
The fertilizer industry is acutely aware of the global nature of its business. U.S. fertilizer producers compete globally with foreign producers having access to lower cost gas, yet have remained reliable suppliers during the recent period of tighter global supplies.  My farm and others like it must be able to depend upon these reliable suppliers who are dedicated to serving the U.S. agricultural community
The challenge to ensure a reliable and affordable supply of fertilizer will take more than sound corporate strategies. The Obama administration must embrace an energy policy that recognizes the importance of natural gas to fertilizer and fertilizer to crop production. A comprehensive energy plan must also ensure continued access to fairly traded imports while discouraging foreign protectionist measures that restrict export supply. This will mean maintaining positive trade ties with producing countries. It will require a foreign policy that encourages political stability in sub-Saharan Africa, which will be a crucial source of fertilizer ingredients in the 21st century.
Finally, it will demand a willingness to ensure adequate natural gas supplies by drilling along our coasts as well as in the American outback--an approach to domestic production that mixes the imperative of conservation with the need to make the fertilizer that helps us grow our food and fuel. Thankfully, modern technologies can allow both industry and the environment to flourish.
A few months ago, Obama corresponded with Norman Borlaug, a Nobel Peace Prize recipient who is widely known as the father of the Green Revolution. Obama would do well to listen to what Borlaug told the New York Times last spring: “This is a basic problem, to feed 6.6 billion people,” said Borlaug. “Without chemical fertilizer, forget it. The game is over.”
For Obama, the presidential game is just starting. A healthy crop needs a good fertilizer to grow--and a successful Administration will want a smart energy policy that makes sure American farmers have what they need in order to produce what they must.
Bill Horan grows corn, soybeans and grains in Northwest Iowa. This fourth generation family farm has been involved in specialty crop production and identity preservation for over 20 years. Mr. Horan was appointed to the USDA Renewable Energy Committee and serves as a Truth About Trade & Technology Board member. www.truthabouttrade.org

Great Expectations

Jan 23, 2009
Barack Obama promised to bring change to the United States. Will this son of a Kenyan who is a former resident of Indonesia also bring change outside of America’s borders? Last summer, at his speech in Berlin, this self-proclaimed “citizen of the world” suggested that he would try.
As a Portuguese farmer, I’m hoping that he will--specifically with respect to Europe and GM crops.
Mr. Obama has the ear of Europeans. Pre-election polls in Britain, France, Germany, Italy, and Russia showed him trouncing his rival, John McCain, by huge margins if they had the opportunity to choose. What these supporters may not realize is that Obama is an advocate of agricultural biotechnology--a field of innovation that many in Europe have snubbed.
Obama has never farmed for a living, but his home state of Illinois is one of America’s great food-producing states. As a senator, he became intimately familiar with the men and women who work the land. He has corresponded with Norman Borlaug, the geneticist who won the Nobel Peace Prize in 1970 for his work in sparking the Green Revolution, which led to large increases in food production in developing countries.
Last year, a U.S. political website called Sciencedebate2008.com published this statement by Obama: “Advances in the genetic engineering of plants have provided enormous benefits to American farmers. I believe that we can continue to modify plants safely with new genetic methods, abetted by stringent tests for environmental and health effects and by stronger regulatory oversight guided by the best available scientific advice.”
Europeans would do well to study these words. Since the commercial introduction of biotech seeds more than a decade ago, farmers in Brazil, Argentina, India, Canada, the United States, and elsewhere have planted nearly 2 billion acres of genetically improved soybeans, corn (maize), canola and cotton. As a result, they’ve enjoyed significant yield increases, which are essential if we hope to feed a global population of 7 billion people.
GM food is no longer the fruit of a cutting-edge technology. Instead, it’s a proven form of agriculture. I’ve grown it on my farm for three years, though EU regulators place severe limits on my access to all of the opportunities that biotechnology holds out.
Those who oppose GM crops are motivated more by unfounded fears than scientific understanding. The truth is that GM crops possess a greater ability to fight off pests and disease. They require fewer chemical sprays – a social and environmental benefit that is important to me.
Biotech crops produced for food and biofuel carries an added environmental benefit as we deal with climate change. They allow farmers to use conservation agriculture practices that leave crop residue on the surface to reduce water and wind erosion. They also reduce pressure to convert wilderness into farmland and allow a significant carbon sink in the soil. All are very important to Europe and the US and certainly of concern to President Obama.
For small resource farmers, especially in developing countries, the benefits of biotech crops are obvious. Increased yields per acre and/or increased efficiency and lower input costs are all on the table. Any of them might mean increased income. In addition to more food, the extra money would support education and health spending and allow farmers to spend more time with their families.
Most important, GM food poses absolutely no threat to human wellbeing: It has never caused as much as a minor allergic reaction in anybody.
Many Europeans haven’t even heard these arguments. Others have simply doubted them, preferring to listen to professional protestors who have sworn undying hostility to biotechnology.
But what if Barack Obama were to make a high-profile case for GM crops? Europeans certainly would pay attention.
“We must extend the Green Revolution throughout the world to ensure greater food security,” wrote Obama to Borlaug last June.
The way to extend the Green Revolution, as Obama well knows, is to transform it into the Gene Revolution--and to unleash the full potential of GM crops. This task is especially urgent in Africa, where malnutrition and famine remain constant threats. Unfortunately, Africa has been slow to take up agricultural biotechnology because many of its governments look to Europe for guidance.
Every year, the United States passes out billions of dollars in foreign aid. Much of this support is put to good use helping poor people in impoverished countries. Yet an even greater gift is in offing, if Obama only will use his popularity in Europe to promote a serious debate between credible scientists, farmers and environmentalists about the importance of biotech crops. The science is on his side, and so is everyone who grapples with the serious problem of feeding a hungry planet.
The world has great expectations for the new American president, and he faces many daunting challenges. Food production is one of the most critical. His response in both word and deed will tell us much about what kind of leader he hopes to be.
Maria Gabriela Cruz manages a 500 hectare farm that has been in their family for over 100 years. Growing maize, wheat, barley and green peas, they use no-till or reduced till methods on the full farm. She has grown biotech maize since 2006. Ms. Cruz is President of the Portuguese Association of Conservation Agriculture, a member of the Truth About Trade & Technology Global Farmer Network and a participant in the 2008 Global Farmer to Farmer Roundtable.

Captain Kirk

Jan 09, 2009
The popular TV series Star Trek began each episode with a famous line about the starship Enterprise, spoken by the actor William Shatner: “Its five-year mission: to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.”
President-elect Barack Obama is about to embark upon a mission of at least four years, and success will require him to boldly go where he hasn’t gone before--on the issue of freer trade.
He won’t have William Shatner by his side, but it looks like he’ll have the company of his very own Captain Kirk--i.e., Ron Kirk, his nominee for U.S. Trade Representative.
The selection of Kirk looks sound, at least on paper. He’s a skillful politician with a record of supporting trade accords, such as NAFTA. A former mayor of Dallas--and therefore the citizen of a border state--Kirk knows first-hand the importance of exchanging goods and services across international lines.
He also represents a huge improvement over both Obama’s campaign-trail rhetoric and his apparent first choice for USTR. Xavier Becerra, a California congressman, has a decidedly spotty record on free trade. He flatly opposes several pending trade agreements and has changed his mind about NAFTA--he went from voting for it in Congress to thinking that it was a mistake.
Fortunately, Becerra declined Obama’s invitation to join the new administration.
I’m a little bit mystified as to how Obama can move so quickly from Becerra to Kirk, but for now I’m content to say that the president-elect has delivered a change I can believe in. America’s top trade diplomat shouldn’t be a protectionist.
One factor in Obama’s thinking may be that when it comes to trade accords, the White House calls the shots, not the USTR. Kirk seemed to suggest as much in an interview last month. “My agenda is the president’s agenda,” he told the Dallas Morning News. No surprise there.
Yet Kirk went on to hint that Obama will be open to lowering trade barriers: “The exciting thing for me is that the president very much sees a robust trade policy as part of his economic agenda. He understands that the United States can’t be protectionist, can’t step back from our trade relations.”
That’s for sure. In fact, if Obama wants Washington to put together an effective economic stimulus package, he would be wise to make sure that it includes congressional approval of the Colombia Free Trade Agreement--a modest pact that would provide a big boost to many Americans whose jobs involve exports, including farmers.
The World Bank expects global trade to shrink by 2 percent in 2009. This painful retraction will follow years of very good growth. It is part and parcel of a world-wide economic crisis, and the new administration must take steps to counter it.
The deal with Colombia would be a small step in the right direction. So would approval of pending agreements with Panama and South Korea. Moving forward, Kirk will want to seek out new opportunities for U.S. exports.
Last week, in a newspaper op-ed, a former State Department official suggested a U.S.-Japan Free Trade Agreement. As with any such agreement, the devil is in the details. But a return to economic prosperity will require creative thinking along these lines. American farmers would benefit enormously from better access to Japan’s food market.
Kirk will have his work cut out for him, though. One protectionist group claims that the anti-trade lobby has picked up 28 votes in the House of Representative and six votes in the Senate. Others have disputed these numbers, but whatever the reality, they reflect a distressing trend.
The trend is represented even within Obama’s cabinet. On the day the president-elect announced his selection of Kirk, he also introduced California congresswoman Hilda Solis as his choice for Secretary of Labor. As a favorite of union bosses, she is a fierce critic of trade.
This May, Hollywood plans to launch its summer blockbuster season with yet another rendition of Star Trek. Let’s hope that when someone gets around to filming a picture about the incoming administration, protectionists like Solis enjoy no time on screen--and that Obama’s Captain Kirk gets to play a starring role.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade and Technology. www.truthabouttrade.org
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