Friday, July 31, 2009

China Cities Raise Water Price in Bid to Conserve

JULY 31, 2009

Tariffs Remain Low by Global Standards

By ANDREW BATSON, Wall Street Journal

BEIJING -- Cities across China are raising the price of water, in moves that try to balance the need to conserve an increasingly scarce resource with the effects on a public used to low fees.

The city government of Luoyang, in central Henan province, prepared to hold a public meeting Friday to argue for a proposed water-price increase of 40% to 48%. Water prices in the dry region haven't risen since 2003, which the government says is exhausting meager supplies and keeping the local water utility in the red. At least half a dozen other major cities have raised water prices in the past few months.

The changes reflect a growing official consensus that low prices are part of China's water-shortage problem, since they give companies and households little incentive to use water carefully. The government is also spending billions of dollars on a controversial system of canals to divert water from the flood-prone south to the dry north.

The amount of water available per person in China is just one-quarter of the world average. The World Bank has estimated that water shortages cost China about 1.3% of its annual economic output, with a further 1% lost to water pollution.

"Given the underpricing of water in China and its environmental consequences, I feel it is wise for governments to take the opportunity of low inflation pressure to adjust the water tariff," said Jian Xie, a senior environmental specialist at the World Bank.

Shanghai raised residential water prices 25% in June and plans a 22% increase in November 2010. The central city of Zhengzhou raised water fees 25% in April, and officials say prices will have to change more rapidly in the future.

There has been "strong public reaction" to the price increases in some cities, the National Development and Reform Commission said in a notice in early July. Some local news reports have suggested the price increases are being driven more by corporate greed than a real need to conserve water. The agency, which supervises the prices of regulated goods like water, said local governments need to take public concerns into account as they plan for necessary price increases.

The eastern city of Nanjing raised residential water prices 12% in April but also rolled out subsidies to reduce the impact on low-income households.

The rise in water bills has upset consumers even in cities where rates haven't been rising. Zheng Hong, a lawyer in Beijing who lives with seven family members, says his household spends 60 yuan to 70 yuan ($8.78 to $10.25) a month for tap water. He is against any price increases. "The lower, the better," he says. "Compared to my hometown in Henan province, the water prices in Beijing are already pretty high."

China's water prices are still low by global standards, even with the average residential water fee in major cities now up 3% since the end of 2008, to 2.44 yuan per ton. Average water prices in Europe are anywhere from four to 10 times higher, according to Deutsche Bank estimates.

—Sue Feng contributed to this article.

Write to Andrew Batson at andrew.batson@wsj.com

Opinion: Farmers Can Feed the World

Better seeds and fertilizers, not romantic myths, will let them do it.

By NORMAN E. BORLAUG, Wall Street Journal

Earlier this month in L’Aquila, Italy, a small town recently devastated by an earthquake, leaders of the G-8 countries pledged $20 billion over three years for farm-investment aid that will help resource-poor farmers get access to tools like better seed and fertilizer and help poor nations feed themselves.For those of us who have spent our lives working in agriculture, focusing on growing food versus giving it away is a giant step forward.

Given the right tools, farmers have shown an uncanny ability to feed themselves and others, and to ignite the economic engine that will reverse the cycle of chronic poverty. And the escape from poverty offers a chance for greater political stability in their countries as well.

But just as the ground shifted beneath the Italian community of L’Aquila, so too has the political landscape heaved in other parts of the world, casting unfounded doubts on agricultural tools for farmers made through modern science, such as biotech corn in parts of Europe. Even here at home, some elements of popular culture romanticize older, inefficient production methods and shun fertilizers and pesticides, arguing that the U.S. should revert to producing only local organic food. People should be able to purchase organic food if they have the will and financial means to do so, but not at the expense of the world’s hungry—25,000 of whom die each day from malnutrition.

Unfortunately, these distractions keep us from the main goal. Consider that current agricultural productivity took 10,000 years to attain the production of roughly six billion gross tons of food per year. Today, nearly seven billion people consume that stockpile almost in its entirety every year. Factor in growing prosperity and nearly three billion new mouths by 2050, and you quickly see how the crudest calculations suggest that within the next four decades the world’s farmers will have to double production.

They most likely will need to accomplish this feat on a shrinking land base and in the face of environmental demands caused by climate change. Indeed, this month Oxfam released a study concluding that the multiple effects of climate change might “reverse 50 years of work to end poverty” resulting in “the defining human tragedy of this century.”

At this time of critical need, the epicenter of our collective work should focus on driving continued investments from both the public and private sectors in efficient agriculture production technologies. Investments like those announced by the G-8 leaders will most likely help to place current tools—like fertilizer and hybrid seeds that have been used for decades in the developed world—into the hands of small-holder farmers in remote places like Africa with the potential for noted and measured impact.

That investment will not continue to motivate new and novel discoveries, like drought-tolerant, insect-resistant or higher-yielding seed varieties that advance even faster. To accomplish this, governments must make their decisions about access to new technologies, such as the development of genetically modified organisms—on the basis of science, and not to further political agendas. Open markets will stimulate continued investment, innovation and new developments from public research institutions, private companies and novel public/private partnerships.

We already can see the ongoing value of these investments simply by acknowledging the double-digit productivity gains made in corn and soybeans in much of the developed world. In the U.S., corn productivity has grown more than 40% and soybeans by nearly 30% from 1987 to 2007, while wheat has lagged behind, increasing by only 19% during the same period. Lack of significant investment in rice and wheat, two of the most important staple crops needed to feed our growing world, is unfortunate and short-sighted. It has kept productivity in these two staple crops at relatively the same levels seen at the end of the 1960s and the close of the Green Revolution, which helped turn Mexico and India from starving net grain importers to exporters.

Here, too, the ground seems to be slowly shifting in the right direction, as recent private investments in wheat and public/private partnerships in maize for Africa re-enter the marketplace. These investments and collaborations are critical in our quest to realize much needed productivity gains in rice and wheat to benefit farmers around the world—and, ultimately, those of us who rely on them to produce our daily food.

Of history, one thing is certain: Civilization as we know it could not have evolved, nor can it survive, without an adequate food supply. Likewise, the civilization that our children, grandchildren and future generations come to know will not evolve without accelerating the pace of investment and innovation in agriculture production.

Mr. Borlaug, a professor at Texas A&M University, won the 1970 Nobel Peace Prize for his contributions to the world food supply.

Thursday, July 30, 2009

'Organic' debate goes on, naturally

By RUSS PARSONS, Los Angeles Times

July 29, 2009

Organics is an article of faith for a lot of people and what I had to say was pretty far from the accepted dogma. Still, it was something I thought really needed to be said and if, after more than 20 years of covering farming and food issues for The Times, I wouldn't say it, who would?

So when I opened my e-mail the morning the column ran, I had donned my asbestos undershorts, as we kids say. But a funny thing happened on the way to the firestorm.

There was plenty of mail, to be sure -- probably more than I've received for any story that didn't involve salt and turkeys. But the amazing thing was: Most of it was positive. I mean an overwhelming majority -- like by a ratio of 5 or 6 to 1.

Turns out, it seems like this was something a lot of folks have been thinking, but they were just waiting for someone else to be dumb enough to say it out loud first.

My point was that farming is a complicated enterprise and there is a huge gray area between certified organic and the stereotypical heavy-duty use of chemical pesticides, herbicides and fertilizers.

Furthermore, a lot of the best farming practices of the original organic philosophy -- composting, fallowing, crop rotation, the use of nonchemical techniques for controlling most pests -- have been adopted by many nonorganic growers, even though they still reserve the right to use chemicals when they think it's best.

What we eat and how our food is grown are important issues and you shouldn't take any one person's argument as gospel. Do as much research as you can, consider as many different sources as possible, and think critically about all of them. Best of all, visit some farms, both organic and nonorganic, and see how they work.

There were a few misconceptions that came up repeatedly that I'd like to clear up:

First, the column was about the legal definition of organic as it stands today, not the original philosophy, which was much broader (and much of which is incorporated in the philosophy of sustainability, with the notable exception of allowing chemical pesticides and fertilizers if used responsibly).

Some people said they chose organics because they could be sure they weren't from plants that had been genetically modified. It is true that the organic code does forbid GMO, but at this time that's a moot point. There are no genetically modified fruits and vegetables on the market in the U.S. today (field corn and soybeans are another matter).

Others said that they chose organics because the plants had been chosen for flavor rather than disease resistance or how well they transport. The same varietals are used by both organic and nonorganic farmers. The same thing goes for seasonality and locality.

Growers' viewpoint

Along those lines, some of the responses I found most interesting were from the folks directly involved in agriculture.

Several of them focused on the hazy nature of which chemicals are allowed to be sprayed in organic operations and which aren't. "Organic" doesn't mean no spraying; it just means that only certain chemicals can be used.

Byron Phillips, a longtime pest management consultant for Washington's tree fruit industry, had worked with orchards that were certified organic, others that were sustainable and others that were conventional.

"Unfortunately most people still think that organic means no spray of any kind whatsoever -- they don't realize that we often spray organic operations more frequently than conventional operations," he wrote. "I don't think either one is bad -- they are just different.

"Sometimes a [chemical] product can be organic if it is produced a certain way, but not if it is produced a different way." Furthermore, he wrote, "Part of the frustration is that the criteria by which the National Organic Standards Board judges products seems to be somewhat of a moving target and we end up with products that are OK one week and not the next."

Tony Thacher of Friends’ Ranch, a high-quality farmers market citrus grower in Ojai, complained that he doesn't qualify for organic certification because he uses urea as a fertilizer, even though he says it is "the first truly 'organic' compound ever, synthesized in the 1700s. It's made from natural gas and nitrogen from the air and thus of course is not labeled organic. Go figure."

Stephen Pepe, a wine grape grower in the Santa Rita Hills, wrote, "Most vineyards do not bother to get certified organic, not because we do not care about the environment but because some of the organic rules elevate form over substance. For example, to avoid powdery mildew, a fungicide needs to be sprayed. Sulphur is organic but only lasts 7 days or so and needs to be redone after each rain. While a synthetic nonorganic fungicide lasts for 21 days, which means for the environment two less tractor passes through the vineyard spewing diesel into the air and compacting the soil."

Maryann Carpenter of Coastal Farms (formerly Coastal Organics) in Santa Paula wrote that she and her husband, Paul, gave up their organic certification when the costs and paperwork became too much. "I was scared stiff our business at the farmers markets would suffer. We spent months explaining our reasons for dropping out of the program . . . and handed out a detailed letter hoping people would understand that we were still farming the same way (organic), but could not use the word unless we were certified.

"I'm happy to report that the majority of our customers completely understood our reasoning and had faith in the way we grow the food we sell. However, every week there are still people who walk up to our stand and ask "Are you Organic?" As we tell them we have grown 'organic' vegetables for 25 years, but are not 'certified organic,' they immediately turn and walk away. It's frustrating."

russ.parsons@latimes.com

Wednesday, July 29, 2009

'Organic' label doesn't guarantee quality or taste

THE CALIFORNIA COOK

Just because it's organic doesn't mean it's the best. Let flavor dictate.

By RUSS PARSONS, Los Angeles Times

July 1, 2009

I don't believe in organic. There, I've said it and I feel better. It's something that's been on my mind for years.

Now, don't get me wrong: I've got nothing against organic farmers. In fact, some of my favorite farmers are organic. I really admire them: Growing delicious food and doing it according to organic standards is adding a degree of difficulty that I wouldn't wish on anyone.

But a lot of my favorite farmers aren't organic, and therein lies the rub.

This may shock some people, and for that I guess I ought to apologize. But really, if I'm honest, I think the ones who need to do the apologizing are the often-well-meaning organic advocates who paint such a black-and-white picture of the way farming works that it seems there should be no choice at all.

Listening to them, you get the idea that if you aren't eating fruits and vegetables that were organically grown, you might as well be mainlining Agent Orange or handing your money straight to some giant industrial agricultural corporation. You're certainly not going to be getting anything with any flavor, they'd argue.

I've been covering agriculture and farmers markets for more than 20 years, and in that time, I've visited scores, if not hundreds, of farms, both conventional and organic. I wrote a book on the subject. And I can say with some degree of certainty that that those ideas are, at best, an oversimplification.

The real world isn't black and white at all. Between pure organics and the reckless use of chemicals, there is a huge gray area, and this is where most farming is done.

Ignoring this means that not only are you being misinformed, but you're also taking your eye off the real mission of supporting small farmers who grow wonderful food.

Whether something is grown organically might be one of the factors you use when you're considering what to buy, but it is by no means the only one: For me, seasonality, locality and -- above all, flavor -- trump it.

And it certainly is not a surefire solution to all of life's (or even agriculture's) ills. You can be a bad farmer growing organically, and you can be a good farmer and still use chemical pesticides, herbicides and fertilizers.

In large part, this is a credit to the organic farming movement, as many of the ideas and techniques it pioneered have now worked their way into the mainstream, reducing the use of chemicals even among farmers who aren't completely organic.

A positive influence

In fact, the sustainable agriculture movement recognizes this, claiming as one of its central tenets the much vaguer requirement of "environmental responsibility" and stating plainly that that doesn't necessarily require growing strictly organically.

And as far as the image of organic farming being the domain of small family farms, for the most part, that is no truer than with conventional farms. A study by UC Santa Cruz professor Julie Guthman, included in her splendid book "Agrarian Dreams," found that the sizes and ownerships of working organic and conventional fruit and vegetable farms are not that different.

That probably shouldn't be that much of a surprise. Contrary to the image of farming being run by a few giant industrial agricultural corporations, roughly 85% of all farms in California -- organic or conventional -- are owned by individuals or families, and 75% are smaller than 100 acres. (On the other hand, Earthbound Farm, which grows organic lettuces and other vegetables, now cultivates more than 40,000 acres.)

The real problem with most farming today is with a commodity marketing system that demands that every decision be made based on what will be cheapest, not what will result in the best flavor. That -- not a simple choice between organic and conventional -- is what makes even small farms behave like industrial giants and ship fruits and vegetables that may look great but have no taste.

The similarities don't end with size and ownership. While organic farming was once a broad philosophical concept that included such things as composting, fallowing land for a certain amount of time every year and even paying living wages to workers, today the difference between organic and conventional is defined almost entirely by the choice not to use certain chemicals.

Certainly, there is a problem with chemical pesticides, herbicides and fertilizers when they are used incorrectly. But it's quite a leap to suggest that because something is harmful when misused, it mustn't be used at all.

Making choices

The hard-line organic-or-nothing crowd refuses to recognize this. As a result, as with any other zero-tolerance program, that can lead to making some awfully dumb decisions.

Walking through the Santa Monica farmers market the other day, I again heard it repeatedly: Customers asking farmers "Are you organic?" as if it were some kind of litmus test for quality or safety. I saw somebody walk away from the absolutely heavenly Snow Queen white nectarines at Art Lange's Honey Crisp stand because he doesn't embrace the organic label.

This has happened so many times to Fitz Kelly, another terrific stone fruit grower at the Santa Monica market, that he has even printed up a fact sheet he routinely hands out explaining why he isn't organic. Basically, it comes down to an orchard rooted in sandy, nutrient-poor soil that requires help from fertilizers; a preference for occasional, minimal sprayings of chemical pesticides rather than what he believes would be more frequent use of weaker, organically approved pesticides; not being willing to spend the time or the money that it takes to go through organic certification; and, truth be told, probably a good chunk of innate Irish stubbornness.

I've been to both of these farms and walked the orchards. You see all the right things: the mix of weeds growing between the trees (in order to attract the good bugs that will eat the bad bugs and reduce the need for spraying); the slight pallor of the leaves (too dark a green can mean overfertilizing); the healthy, diverse communities of birds and wildlife that make them home.

But most important, I've tasted the fruit that comes from them. Because if there's one thing I've learned in more than 20 years of covering farming, it's that you can't fake flavor. You can fudge on almost everything else, but really delicious fruits and vegetables come only from talented, careful farmers doing their very best work.

And that's true regardless of the label that's attached.

russ.parsons@latimes.com

Tuesday, July 28, 2009

AGRICULTURE IN CUBA TODAY

Cuba is now one of the world leaders in biofertilisers, with a highly impressive production of organic food. This agricultural approach has breathed new life into rural communities and done a great deal to stem rural migration to urban areas. It is the envy of international organizations promoting organic farming and sustainable development. Cuban farmers and researchers are applying traditional and alternative technologies to food production and forging ahead towards their ultimate goal of total sustainability.

Another area in which an innovative approach has been applied is that of urban agriculture. Havana is the largest city in the Caribbean, housing 20% of Cuba’s population. Food shortages and the lack of fuel for distribution had a catastrophic effect on the city in the early nineties so the establishment of private gardens, state-owned research gardens and popular gardens employing around 25,000 urban farmers has been of inestimable value in maintaining the capital’s food supplies. The popular gardens range in size from a few square metres to large plots of land which are cultivated by individuals or community groups. They yield important food supplies to local communities in addition to the medicinal plants prescribed for all manner of ailments by local yerberos.

In 2006 one cannot yet declare that everything in the Cuban garden’s lovely, but it would be churlish to deny the agricultural achievements of recent years:

By 1999, there were gains in yields for 16 of 18 major crops, potato, cabbage, malanga, bean and pepper yields having higher yields than Central America and being above the average yields in the world.

By the end of 2000, food availability in Cuba reached daily levels of 2600 calories and more than 68 grams of protein (the United Nations Food and Agriculture Organisation considers 2400 calories and 72 grams of protein per day to be sufficient).

By 2002, 35,000 acres of urban gardens produced 3.4 million tons of food. In Havana, 90% of the city's fresh produce came from local urban farms and gardens, all organic. In 2003, more than 200,000 Cubans worked in the expanding urban agriculture sector.

In 2003, the Cuban Ministry of Agriculture was using less than 50% of the diesel fuel it used in 1989, less than 10% of the chemical fertilisers and less than 7% of the synthetic insecticides. A chain of 220 bio-pesticide centres provided safe alternatives for pest control.

The ongoing National Program for Soil Improvement and Preservation benefited 475,000 hectares of land in 2004, up 23,000 hectares in 2003. The annual production of 5 million tonnes of composted soil by a network of worm farms is part of this process.

At the time of writing, the Cuban government is heavily committed a close partnership with Venezuela and potentially with other left-wing Latin American governments. Agreements with Venezuela include the constitution of a bilateral enterprise to promote agricultural development, training and biodiversity. For several years Cuba has been exporting its city farming ‘revolution’ to Venezuela, despite sceptical remarks from Venezuelans about why so much effort should be put into urban farming when there are thousands of miles of fertile farmland so far uncultivated in the country.

It is to be hoped that in the wake of new international economic agreements, the important progress made in Cuban agriculture will not be relinquished to renewed reliance upon costly imports, a facile short-term solution with –as has already been observed in Cuba - catastrophic long-term implications. It remains to be seen whether the Cuban administration will have the vision to continue to espouse sustainable agriculture. In the long term, when the United States’ trade embargo is finally lifted and cheap agricultural products become widely available, it is unlikely that Cuban farmers will be able to compete without returning to intensive agriculture, unless skilled marketing initiatives are applied to promote the currently excellent standards of Cuban organic produce.

Monday, July 27, 2009

A New Breed of Farm

By Diane Daniel
Special to The Washington Post
Wednesday, May 6, 2009

"I'm from a long line of out-of-the-box thinkers, and we've been on this lunatic train for a long, long time," proclaimed ruddy-cheeked Daniel Salatin, 28, during his introduction to what is perhaps the country's most sought-after farm tour.

"Let me give you some housekeeping rules," he boomed. "There are none."

The 75 of us smiled from our perches on hay bales lined up along the floor of a flatbed trailer. Soon we would be pulled by tractor through Polyface Farm, a mecca of sorts, thanks to its dedication to sustainable practices and the prominent treatment given it by author Michael Pollan in "The Omnivore's Dilemma," his 2006 critique of industrial farming.

The faithful and curious, along with their kids and two groups of college students, had come to this farm deep in the Shenandoah Valley to hear the gospel according to the Salatins.

The Obamas may have planted an organic garden at the White House, but the first family of farming is arguably the Salatins. Patriarch Joel is the famous face of this self-proclaimed "beyond organic" livestock farm, which he took over from his father in 1982. On the day we visited, Joel was out of town on one of his many speaking engagements. (His stock is set to rise even higher: The new documentary "Food, Inc.," opening June 12 in Washington, paints him, once again, as a prophet among demons.)

Polyface has been widely praised by sustainable-farming advocates and foodies for its commitment to Earth- and animal-friendly practices, including rotational grass grazing, humane treatment of animals and local processing. With an annual average population of 6,500 laying hens (for eggs), 24,000 broilers (for meat), 1,000 head of cattle, 200 hogs, 500 turkeys and 250 rabbits, Polyface is classified as a commercial farm, but it's on the smaller side, defiantly spurning one-size-fits-all USDA regulations.

"We have an open-door policy," continued Daniel Salatin, donning an Australian bush hat like his father's before leading us on a two-hour-plus tour of a tiny portion of Polyface's 100 acres of pasture (an additional 450 acres are wooded). "There are no copyright issues. It's all about everybody else doing it. The consumer, the customer, the farmer. We share what we know."

After "The Omnivore's Dilemma" hit the bestseller list, demand for tours grew to the point that the Salatins began to offer one freebie a month from spring to fall (reservations tend to fill up far in advance) and otherwise charge $800 for up to 100 people, with an extra $200 to guarantee Joel or Daniel's presence. But visitors can also take free self-guided tours from Monday through Saturday.

My husband and I turned our tour into a locavore weekend. After Polyface, we visited the much-smaller Green Fence Farm in nearby Greenville. The specialty produce and livestock farm is owned by Kate and Nick Auclair, Washington transplants who not long ago were deeply entrenched in government work and are now just as deeply entrenched in soil and feathers. Later we dined at area restaurants including Staunton Grocery and Zynodoa, each of which uses ingredients from one of the farms.

"We're land stewards," Salatin said at our first stop, where we examined the open-bottom cages his broilers would soon go into to peck at feed and fertilize the soil.

"What excites us is to see land heal," he said. "All of that hinges on making earthworms and soil happy and healthy."

As directed, we bounced on the spongy earth, oohing and aahing over its richness, even if its texture had been created by earthworm excretions.

"As the first tour of the season, you're probably the only ones to see the pig-aerators," Salatin announced on the way to the next stop.

That excited the crowd, many of whom had read about this Polyface practice. Instead of removing the manure that cows produce during the winter, farmers let it pile up. All the while they add small amounts of corn, like frosting in a layer cake. In early spring, when the cows are taken out to pasture, the pigs are brought in to root for the corn, turning the soil over and over. The end result: a rich compost.

"We're standing on literally tons of cow manure, and I'm not smelling much, if any," Salatin said when we reached the corral of 22 grunting pigs. We nodded in agreement.

"Look at this compost," he said, scooping up a steaming handful and stretching out his arm to the crowd. "If anyone wants to grab this and feel how warm it is, go ahead."

Surprisingly -- for this crowd -- there were no takers.

After visiting a cow pasture, the tour stopped at the brooder (chicken nursery), teeming with 3,000 adorable day-old peeping chicks. In three weeks, these broilers would be out in the fields. Five weeks later, they'd be ready for slaughter.

Like a museum exhibit that ends in a gift shop, ours ended at the farm store, where, if visitors are interested, they can buy a processed Polyface broiler for the trip home. We filed into the small concrete building, checking out the steaks, poultry, pork, even dog food. One of the shoppers was Salatin fan Amy Troppman, 33, who lives three hours northeast in Lovettsville. She picked up a pound of ground beef ($4.25) and a dozen eggs ($2.50 medium, $3.75 large).

"I'd read 'Omnivore's Dilemma' and was very excited to hear Polyface was so close. It's a thrill to be here," she said. Troppman had brought her parents, visiting from Cincinnati, who had also been eager to visit the famous farm.

"I was particularly struck by the pig-aerator and the lack of smell," she said. "And the animals all look so happy."

Thursday, July 23, 2009

Betting the farm

As world population expands, the demand for arable land should soar. At least that's what George Soros, Lord Rothschild, and other investors believe.

By Brian O'Keefe, senior editor Fortune
Last Updated: June 16, 2009: 11:17 AM ET

Over the past few years hedge fund gurus like George Soros, investment powerhouses like BlackRock, and retirement plan giants like TIAA-CREF have begun to plow money into farmland - everywhere from the Midwest to Ukraine to Brazil. Canadian private equity firm AgCapita, which raised $18 million in 2008 to invest in Saskatchewan cropland, estimates that as of the first quarter of 2009, more than $2 billion of private equity money had been raised for farmland investments globally, and another $500 million was planned.

The growing flow of money into farms has persisted despite a major drop in the commodities markets last fall, prompted in part by the global financial crisis. In the spring of 2008 spiking grain prices caused food shortages and rioting in dozens of countries before falling some 50% by December. In fact, that crash has obscured a broader trend. Even after the correction, grain prices remain above their 20-year average, and food stocks around the world are still near 40-year lows. For many investors, last year's shortages are a preview of what could lie ahead.

The fundamentals remain in place for a long-term boom in the prices of everything ag-related. The simplest metric to consider is the amount of farmland per person worldwide: In 1960 there were 1.1 acres of arable farmland per capita globally, according to data from the United Nations. By 2000 that had fallen to 0.6 acre(see chart above, "Precious Acres"). And over the next 40 years the population of the world is projected to grow from 6 billion to 9 billion.

"Land is scarce and will become scarcer as the world has to double food output to satisfy increased demand by 2050," says Joachim von Braun, director general at the International Food Policy Research Institute. "With limited land and water resources, this will automatically lead to increased valuations of productive land. And it goes hand in hand with water. Water scarcity will probably increase even more than land."

Improving diets in the developing world will also help drive up prices. As per capita incomes rise in China, India, and other parts of Asia, hundreds of millions of people will be adding meat to their daily fare. In the coming decades that will have a multiplier effect on demand because of the massive amounts of grain used to feed livestock. The USDA estimates that it takes seven pounds of grain to produce one pound of beef. Even with better crop yields from new seed technology, a supply crunch is looming. And the effects of climate change - rising sea levels, more droughts - could only amplify the problem.

"I'm convinced that farmland is going to be one of the best investments of our time," says commodities guru Jim Rogers, who serves as an adviser to AgCapita. "Eventually, of course, food prices will get high enough that the market probably will be flooded with supply through development of new land or technology or both, and the bull market will end. But that's a long ways away yet."

First Published: June 10, 2009: 9:47 AM ET

Monday, July 13, 2009

'Natural' foods aren't always organic

Organic advocates are alarmed by the growing market for the label, which is largely unregulated and guarantees little or nothing except when applied to meat or poultry.

By Monica Eng, the Los Angeles Times

July 11, 2009

At first it may seem only right for Dean Foods Co., the nation's largest organic dairy producer, to roll out a line of yogurts and milk marketed as "natural." But Dean's announcement last week alarmed advocates of organic food, who say the burgeoning market for less-expensive "natural" foods reaps billions from consumers while guaranteeing little or nothing in exchange.

Certified organic food products are regulated by the U.S. Department of Agriculture and are produced by farmers and manufacturers under a strict set of rules. But the agency defines the term "natural" only for meat and poultry. In the rest of the food industry, the meaning is largely up to the producer.

Adding to advocates' concerns, a new study shows wide confusion among American consumers about products aimed at the green market. Many mistakenly believe that "natural" is a greener term than "organic."

"They felt 'organic' was just a fancy way of saying 'expensive,' " said Suzanne Shelton, president and chief executive of Shelton Group, which conducted the survey and specializes in marketing sustainability to mainstream consumers. "They think 'natural' is regulated by the government but that 'organic' isn't, and of course it's just the opposite."

The U.S. natural food market grew 10% to $12.9 billion from 2007 to 2008, the Nutrition Business Journal said.

Some observers suspect that companies will watch Dean's new venture to see if they can shed cumbersome, expensive organic standards.

"Our fear is that they are going to blur this line" between organic and natural, said Mark Kastel of the Cornucopia Institute, a nonprofit organic industry watchdog group. "The concern is they'll help destroy organics or at least chip away a substantial part of it."

Dean's natural dairy line is being launched by its Horizon Organic brand and will be cheaper than organic options.

Sara Loveday, the brand's communications manager, said Horizon had created its own definition of "natural."

"To us, it means it's produced without added hormones, artificial sweeteners, artificial colors, flavors, preservatives or high fructose corn syrup," Loveday said.

That's a good start, said Kastel, senior farm policy analyst for Cornucopia.

"But Dean Foods will not be able to [say] the products are produced without pesticides, herbicides, antibiotics and other drugs or genetically modified feed crops, or that the cows are required to graze in pastures rather than confined to factory farm feedlots," he said.

"These are all factors that truly differentiate organic production from natural/conventional agricultural and livestock production."

The new products will hit shelves this month with Little Blends, 4-ounce natural yogurts flavored with fruits and vegetables and aimed at toddlers. A second product, 6-ounce boxes of vanilla and chocolate milk called Milk Breakers, will be test-marketed next month in Florida.

Loveday said the new products would feature Horizon Organic's familiar spotted cow, which has advocates worried about consumer confusion.

"The move feels sneaky," said Dawn Brighid, spokeswoman for Sustainable Table, a nonprofit online resource about sustainable food. "The average mom won't know about the change, and most people are still unclear about the difference between 'natural' and 'organic.' . . . I'm afraid they won't understand what they are getting."

Marion Nestle, nutrition professor at New York University and author of "What to Eat," said the new, lower-cost products would undercut Horizon's organic lines.

But Loveday contended that they would help support the operation through a market glut of organic milk.

"The more profitable the overall brand the better," Loveday said. "We are dedicated to organic, but innovation is one way to grow your business as a whole and continue to support those farmers."

When the "natural" label is applied to more processed foods, the picture grows even more complicated. According to market research firm Mintel International, "all natural" was the second-most-common claim on new food products launched in 2008.

Many brands apply it to products with long lists of ingredients not available to the average home cook.

For Bruce Silverglade, director of legal affairs for the Center for Science in the Public Interest, a good standard for natural ingredients would be "minimally processed," a stipulation the USDA uses for natural meat and poultry.

"If you have to have a lab in your own kitchen to create the substance, then it should not be considered a minimally processed ingredient," he said.

By that measure, Ben & Jerry's Chubby Hubby "all natural" ice cream containing partially hydrogenated soybean oil, soya lecithin and cocoa processed with alkali would not qualify.


"Don't be fooled by products labeled 'natural,' " said Marcia Schurer, author of "FitDelicious" and president of Culinary Connections, a consulting and training firm. "Consumers should . . . look for ingredients that are as close to their natural state as possible."

Kastel of the Cornucopia Institute, who also criticizes Dean Foods for recently switching its Silk soy milk from organic to conventional, noted that Cornucopia was a stakeholder in the company, having received a donation of Dean Foods stock at its founding.

"We obviously have an investment in Dean, and we have nothing against profits," he said. "It just makes me mad when I see a company that attempts to profiteer at the expense of these hardworking farmers who have built the organic industry. I fear they are going to blur the lines between natural and organic, and I think someone needs to educate the public."

meng@tribune.com

Thursday, July 9, 2009

Parched State Searches for Ways to Expand Water Supply

By JIM CARLTON

Wall Street Journal

SAN FRANCISCO -- When California's budget impasse is settled, Gov. Arnold Schwarzenegger will have to deal with the state's other big crisis: fresh water.

Gov. Schwarzenegger and other top lawmakers have already drafted plans to attack a severe water shortage in the state, which has suffered a three-year drought.

As soon as the stalemate over how to bridge California's $26.3 billion budget gap is resolved, the governor and legislative leaders plan to introduce a package of water-related measures calling for more water conservation and an estimated $10 billion bond measure to finance more fresh water storage.

"We're going to get that water done this year," said Gov. Schwarzenegger last month at a budget speech in Fresno, Calif. "This is the year of the water. It's that simple."

Water is anything but a simple issue in California, where politicians have long fought over how to divvy up one of the West's scarcest resources.

With some of California's reservoirs now holding as little as 21% of capacity, 60 urban water districts have instituted mandatory water conservation, up from six last summer. The current drought is hurting the state more than in the past, partly because California's population has grown to 38 million people, from 29 million two decades ago.

State officials warn the situation could worsen. "If next year is average or below average in water, we'll have very serious problems," said Lester Snow, director of the California Department of Water Resources.

One complication is a thicket of recent environmental restrictions that curtail how much water can be used.

In 2007, a federal court in Fresno ordered water managers to protect the ecosystem of the San Joaquin-Sacramento River Delta, in part by reducing how much water is pumped through it. That cut water shipments from the mountains of Northern California to arid Southern California by about 30%.

Mr. Snow estimates roughly a quarter of the state's current water shortfall -- which he calculates at about two million acre-feet -- is due to the protections. An acre-foot is 326,000 gallons, or the average amount of water a family of four uses in a year.

Fixing the way water moves through the delta is now central to the water package that the governor and legislative leaders are pushing.

One idea is to build a new canal to circumvent the delta. California voters rejected a similar proposal in 1982, partly over concerns it would cost billions of dollars. So before calling for a new canal, lawmakers are drafting bills to create an oversight body to iron out details of what the delta needs, said state Assemblyman Jared Huffman.

Another cornerstone of the package is providing more water storage. California's reservoir system was established decades ago, when the state's population was smaller and before climate changes began yielding more rain instead of mainly snow. That change has made it more difficult to capture runoff in reservoirs because rain flows too fast to be captured without causing flooding, Mr. Snow said.

But even as Republicans and Democrats have hammered out a water package in a rare show of unity here, any big-ticket water projects are likely to face intense opposition from environmental groups.

The groups say California already has 1,400 dams and that lawmakers need to fix leaky pipes, as well as better manage state groundwater.

"It's not dams that are needed," said Jim Metropulos, a Sacramento lobbyist for the Sierra Club. "You need to expand the existing water supply."

Some legislators say dams have to be part of any possible solution because future water supplies are likely to remain precarious.

Meanwhile, local water districts are trying to cope.

On July 1, the Metropolitan Water District of Southern California reduced supplies of imported water to the agencies it serves by 10% from levels that already were down 10% last year. As a result, the Rancho California Water District, a Riverside County agency that gets much of its water from the agency, was one of several that implemented mandatory conservation measures that day.

Among its new mandates to 42,000 customers: no watering of lawns and gardens between 7 a.m. and 8 p.m., fix leaky faucets and wash only full loads of laundry and dishes. Restrictions have been imposed in more than a dozen other water districts across Southern California, including in Los Angeles and San Diego.

Such measures are likely to become more common. "This is a forever change, that customers will have to start internalizing," says Jennifer Persike, spokeswoman for the Association of California Water Agencies.

Write to Jim Carlton at jim.carlton@wsj.com

Tuesday, July 7, 2009

A Growing Need, the Need to Grow

Driven by a combination of a need for security and a desire for a better lifestyle a growing percentage of Americans are finding their way back to the land.

This is the perspective of California-based Refuge West which believes there is a growing market opportunity to develop new types of vibrant communities tied directly to natural resources.

The development model that Refuge West is pursuing focuses, at the most basic level, on opportunities where communities can be sustainably established through the use of appropriate technologies and practices. Beyond that Refuge West looks for opportunities where the community can be tied to a natural resource and a strong market for that resource.

Because preserving the economic value of the resource is a key to the project’s success, Refuge West looks for unique solutions in the development of the land that preserves and enhances the sustainability of the resource by protecting the environment and providing for a vibrant place for people to live and work.

Refuge West is currently is working with a land owner in Washington State who owns a 700 acre parcel in South Puget Sound.

The site has many attributes which fit the model including substantial water rights, quality soils and microclimate and access to major markets of the Seattle metropolitan area.

It is a beautiful site nestled in the fork of two rivers, surrounded by forest land.

The project is in the pre development phase. It currently contemplates the following plan elements:

· A branded organic field and greenhouse produce operation.

· A grass fed beef operation and an organic fed poultry operation.

· The residential development set outside the prime resource land.

· Arrangements with various agencies for wildlife protection and stream embankment protections.

· A residential ownership model whereby the residents own a share of the farm corporation.

Refuge West is in the due diligence phase testing both the farming and residential assumptions and working with the owner to optimize ownership and operational values.

It is Refuge West’s intent to perfect the development plan with the owner and bring equity investment to the project and adequately capitalize the project.