Month of April, 2008

The 2008 honey bee deal

Submitted: Apr 02, 2008

The bee deal

The European Honey Bee was imported to North America is colonial times. In the course of its pollination work, it became a symbol of American agrarian industriousness. We see an indication of that in the names of the McClatchy newspapers -- Sacramento, Modesto and Fresno Bees -- in the region built on the greatest fruit, nut and vegetable production in the nation. Poetically, we might see an analogy between the Colony Collapse Disorder (CCD) in the honey bees and Subprime Mortgage Disorder (SMD) in subdivisions that have replaced so many agricultural fields and orchards in recent years. But, we aren't as poetic as the McClatchy chain.

Established agricultural scientific research, mainly coming from the land-grant university system, has identified several factors and tentatively suggested that no one factor in bee environment is causing the CCD, but that it is a combination of stresses. Arguments of both sides of the polarized debate around genetically engineered crops is inconclusive that their pollens are involved, however some land-grant university professors are willing to grant that it might be one weakening factor among others. The anti-GE forces continue to produce compelling information that, due to biotechnology corporate influence in the Clinton and Bush administrations, approval of GE crops was granted by the federal government without adequate human health studies as to their effects, and that US and Canadian citizens are now unwitting guinea pigs in a massive, unregulated dietary experiment. This would be somewhat similar to the recent SMD experiment in the credit markets conducted with such enthusiasm here in recent years, as we were unwittingly dragged from the "old" agricultural economy into the "new economy."

The "old" economy, however, is the devil we know. It was never particularly stable and this latest mess in the almonds, the largest market for rental bees in the world it seems, is another case of the original problem of high concentration of mono-cropping of a luxury crop humanity could actually do without, particularly this year with the lowest grain storage quantities since WWII and Third World food-importing nations scrambling to avoid famine. Add to this that a great many almond acres are simply plantings to hold land in agriculture to the tax advantage of developer owners, speculating on a future real estate boom, and it presents a view of extreme agricultural irresponsibility, sort of suicidal in fact. It looks more like Ricardo's dour thoughts on (land) Rents than like agriculture at all.

Nevertheless, although Adee, the South Dakota bee magnate, says (below) that he lost 40 percent of his bees in the California almond orchards this year, he didn't say he lost money on the deal. Aside from the 28,000 Sioux Falls honey bees that did not return from California this year -- about which no one seems to care anymore than Economic Man cares about anyone beyond his own family -- it is becoming likely that the California almond industry is a death trap for bees. And that has consequences far beyond the family of the grower or the investor in the almond deal, when it is considered that honey bees pollinates about a third of a commercially grown crops in the US.

The almond deal, however, can rest assured that as the land-grant university scientists dither on with their various hypotheses and Rep. Dennis Cardoza, Shrimp Slayer-Merced ducks and runs from his House Agriculture subcommittee responsibilities including bees, one hypothesis that will never be considered, at least for funding, is what the effect of 600,000 acres of one crop -- largest magnet for bee rental in the nation -- is having on the nation's premier commercial fruit, nut and vegetable pollinator. This would challenge "scientific" laws of a much higher order of value: economic rather than merely biological.

So, we have a crop, almonds, that originated in China and Central Asia, brought on the Silk Road to Italy and Spain, and brought to California by Spanish missionaries, that must, at least at this quantity, be pollinated by a bee brought to the American Colonies by the English. Our 600,000-acre block supplies an estimated 80 percent of world production and draws in bees for its six-week pollination period from all over the nation and even other parts of the world for an annual International Honey Bee Jamboree, held simultaneously with the annual International Honey Bee Disease Festival.

There is a well-known analogy here: the San Joaquin Valley's huge blocks of mono-cropped orchards and vineyards have attracted the largest infestations of pests ever known -- a great boon to land-grant university pesticide researchers and manufacturers. Evidently, when economic and biological laws conflict, scientists and biotechnology corporations make money. This process has looped around to the point -- all scientists seem to agree on this -- that the pesticides in the Valley are one of the causes for CCD.

We have discovered nothing in this brief essay. However we may be able to salvage something because, unwittingly, we might have rediscovered the definition of "junk science." This term is widely used at least in the state Capitol and no doubt in Washington, wherever committees meet on natural resource or agricultural issues. We think it can be defined as: "data from the natural sciences that in any way conflicts with special economic interests." When legislators start babbling about "junk science," typically prodded on in their opinions by lobbyists and economically pliable scientific experts consulting for special interests, it is necessary for the public to "scientifically" research the legislators' property, business involvements, those of their campaign contributors, and make sure who's paying the "expert," before accepting the derogatory judgment and legislative consequences. The failure of this sort of science has led, in other realms, to blind acceptance of weird formulas designed to create the illusion that the latest crop of Nobel Prize-winning geniuses had erased investment risk from economic history.

Contemplating this example of "junk" math and its consequences raises the issue of what the general public, not arrayed in any special-interest bloc, fewer by the day in our region being able to afford a can of salted, oiled and smoke-flavored almonds, can do to defend the environment against continual depredations by increasingly lethal special interests in control of the government and most media outlets. While the term, "in the public interest," is still bandied about by government, it is frequently used against the public on behalf of special interests. The poor old Common Good"appears in recent years to have gone the way of the Rights of Man.

Moving from the scientific to the legal quagmire we now call the Homeland, we might faintly echo Christopher Stone's question about forests by asking: "Do Honey Bees have rights?" Other questions in this vein that occur are: Do beekeepers have public responsibilities? Do California almond growers have public responsibilities with regard to pollinators? Is CCD a genuinely public issue in which the public -- to be carefully distinguished from land-grant universities' research priorities and funders -- is the only advocate possible for the bees? So far, reports are nearly unanimous in covering the story strictly from the point of view of the economic interests of farmers and beekeepers. Yet, reporters dutifully mention the datum that they pollinate 90 US commercial crops. Sometimes, Einstein's speculation is brought in: "If the bee disappeared off the surface of the globe, then man would only have four years of life left." Of course, we aren't talking about the disappearance of all bees, just the European Honey Bee. But CCD is, at the very least, an unsettling precedent.

There is something grotesque about looking at so much massive death of a species so valuable to all of us and to nature itself, as well as being a creature valuable solely in its own right, totally in terms of the economic problems of its "owners and users;" and, to the extent that deals like almonds are export-led, to other people and industries as well. However, though it is not fundamentally an economic story, there is something equally horrible about never mentioning the scale of "ownership" and "use," as if bigger is always better in agriculture. "Science" is looking everywhere but at its alliance with the special interests it serves in the name of the public interest.

While the Fed is busy printing billions socializing Wall Street's private debt, you'd think they could print a few hundred millions without any special-interest strings attached to help save the bees, considerably and consistently better citizens than your average hedge-fund CEO. And Congress, which seems to have rediscovered its power to regulate, should do what regulation can do to help the situation, and not, under any circumstances listen to some phony "win-win/public-private" crap apt to come from the mouth of the Ol' Shrimp Slayer, now representing his rotten borough, which includes most of the California almond deal, from residence inside the Beltway.

Badlands Journal editorial board
---------------------

4-1-08
AP/Google News
Mystery Die-Off Worries Beekeepers...WAYNE ORTMAN (AP)

http://ap.google.com/article/ALeqM5geLzVDyhEvU5FBCUb4vgydkz7i6QD8VOUO700
SIOUX FALLS, S.D. (AP) — The California winter has been a tough one on South Dakota beekeepers like Richard Adee. Last fall he sent 155 semitrailer trucks to California loaded with hives containing bees fit and ready to pollinate the almond crop.
"We lost 40 percent of the hives we sent there. We sent 70,000 out and lost 28,000," said Adee, whose Adee Honey Farms in Bruce is considered the largest beekeeping operation in the nation."I would say overall the losses of South Dakota bees — from what I've heard — from what they started in the spring of '07 until they came out of the almonds is at least 50 percent. It's not good."
Now, in preparation for the honey-making season in South Dakota, he's working to get back to full strength from a mystery called colony collapse disorder.No one's really sure what's causing the disorder, evident when adult bees abandon the hive...The U.S. Agriculture Department has earmarked money and research to solving CCD because it says one-third of the human diet comes from insect-pollinated plants, and the honeybee is responsible for 80 percent of that pollination.
"As beekeepers we're confused and the scientific community is even more confused because they feel like they should be able to figure this out and get a handle on it, and yet there are so many variables they are just having a problem," said Adee, chairman of the legislative committee for the American Honey Producers Association.
Researchers with the Agricultural Research Service within the U.S. Department of Agriculture are chasing various theories about CCD, said Jon Lundgren, an ARS entomologist in Brookings not directly involved in the research.Among the possible causes are parasites, a virus, or pesticides.It may be a several factors resulting from stress on the bees, he said...The California almond industry covers about 600,000 acres and prefers two bee colonies per acre to do a good job during a pollinating season that lasts about six weeks.

3-1-07
The Independent (UK)
Albert Einstein speculated that "If the bee disappeared off the surface of the globe, then man would only have four years of life left."
Species under threat: Honey, who shrunk the bee population?
Across America, millions of honey bees are abandoning their hives and flying off to die, leaving beekeepers facing ruin and US agriculture under threat. And to date, no one knows why...Michael McCarthy

http://www.heyokamagazine.com/HEYOKA.7.BEES.htm
It has echoes of a murder mystery in polite society. There could hardly be a more sedate and unruffled world than beekeeping, but the beekeepers of the United States have suddenly encountered affliction, calamity and death on a massive scale. And they have not got a clue why it is happening.
Across the country, from the Atlantic coast to the Pacific, honey bee colonies have started to die off, abruptly and decisively. Millions of bees are abandoning their hives and flying off to die (they cannot survive as a colony without the queen, who is always left behind).
Some beekeepers, especially those with big portable apiaries, or bee farms, which are used for large-scale pollination of fruit and vegetable crops, are facing commercial ruin - and there is a growing threat that America's agriculture may be struck a mortal blow by the loss of the pollinators. Yet scientists investigating the problem have no idea what is causing it.
The phenomenon is recent, dating back to autumn, when beekeepers along the east coast of the US started to notice the die-offs. It was given the name of fall dwindle disease, but now it has been renamed to reflect better its dramatic nature, and is known as colony collapse disorder.It is swift in its effect. Over the course of a week the majority of the bees in an affected colony will flee the hive and disappear, going off to die elsewhere. The few remaining insects are then found to be enormously diseased - they have a "tremendous pathogen load", the scientists say. But why? No one yet knows.
"We are extremely alarmed," said Diana Cox-Foster, the professor of Entomology at Penn States University and one of the leading members of a specially convened colony-collapse disorder working group."It is one of the most alarming insect diseases ever to hit the US and it has the potential to devastate the US beekeeping industry. In some ways it may be to the insect world what foot-and-mouth disease was to livestock in England."
Most of the pollination for more than 90 commercial crops grown throughout the United States is provided byApis mellifera, the honey bee, and the value from the pollination to agricultural output in the country is estimated at $14.6bn (£8bn) annually. Growers rent about 1.5 million colonies each year to pollinate crops - a colony usually being the group of bees in a hive.
California's almond crop, which is the biggest in the world, stretching over more than half a million acres over the state's central valley, now draws more than half of the mobile bee colonies in America at pollinating time - which is now. Some big commercial beekeeping operations which have been hit hard by the current disease have had to import millions of bees from Australia to enable the almond trees to be pollinated.
Some of these mobile apiaries have been losing 60 or 70 per cent of their insects, or even more. "A honey producer in Pennsylvania doing local pollination, Larry Curtis, has gone from 1,000 bee colonies to fewer than eight," said Professor Cox-Foster. The disease showed a completely new set of symptoms, "which does not seem to match anything in the literature", said the entomologist...
Professor Cox-Foster went on: "And another unusual symptom that we're are seeing, which makes this very different, is that normally when a bee colony gets weak and its numbers are decreasing, other neighbouring bees will come and steal the resources - they will take away the honey and the pollen. Other insects like to take advantage too, such as the wax moth or the hive beetle. But none of this is happening. These insects are not coming in.This suggests that there is something toxic in the colony itself which is repelling them."
The scientists involved in the working group were surveying the dead colonies but did not think the cause of the deaths was anything brought in by beekeepers, such as pesticides, she said.Another of the researchers studying the collapses, Dennis van Engelsdorp, a bee specialist with the State of Pennsylvania, said it was still difficult to gauge their full extent. It was possible that the bees were fleeing the colonies because they sensed they themselves were diseased or affected in some way, he said. This behaviour has been recorded in other social insects, such as ants.
The introduction of the parasitic bee mite Varroa in 1987 and the invasion of the Africanised honey bee in 1990 have threatened honey bee colonies in the US and in other parts of the world, but although serious, they were easily comprehensible; colony collapse disorder is a deep mystery.
One theory is that the bees may be suffering from stress as beekeepers increasingly transport them around the country, the hives stacked on top of each other on the backs of trucks, to carry out pollination contracts in orchard after orchard, in different states.
Tens of billions of bees are now involved in this "migratory" pollination. An operator might go from pollinating oranges in Florida, to apples in Pennsylvania, to blueberries in Maine, then back to Massachusetts to pollinate cranberries.
The business is so big that pollination is replacing honey-making as the main money earner at the top end of the beekeeping market, not least because in recent years the US has been flooded with cheap honey imports, mainly from Argentina and China...

| »

Merced County Planning Commission behavior outrageous

Submitted: Apr 04, 2008

Lydia Miller, President Steve Burke
San Joaquin Raptor Rescue Center Protect Our Water (POW)
San Joaquin Raptor/Wildlife Rescue Center 3105 Yorkshire Lane
P.O. Box 778 Modesto, CA 95350
Merced, CA 95341 (209) 489-9178, ph
(209) 723-9283, ph. & fax
raptorctr@bigvalley.net
sjrrc@sbcglobal.net

Merced County Board of Supervisors
2222 M Street
Merced, California 95340
Fax: (209) 726-7977
Ph: (209) 385-7366
dist1@co.merced.ca.us ; dist2@co.merced.ca.us ;
dist3@co.merced.ca.us ; Dist4@co.merced.ca.us ;
dist5@co.merced.ca.us

Dee Tatum
Chief Administrative Officer
ceo@data.co.merced.ca.us

Robert Lewis
Director of Planning and Economic Development
rlewis@co.merced.ca.us

James Fincher
County Counsel
jfincher@co.merced.ca.us

Paul A. Fillebrown
Director of Public Works
209-735-3989 Fax
spaf@co.merced.ca.us.

Re: Planning Commissioner Sloan intimidates, censors, and harasses the public and staff on March 26, 2008 Hearing (Felix Torres: CUP #MM07-025-1st Modification to CUP#05-031 and Minor Deviation)

April 4, 2008 Via: E-mail

Members of the Board,

Planning Commission Chairman Steve Sloan violated the public right to present testimony on a number of occasions at the March 26 Planning Commission hearing.

A member of the public attempted to read the resignation letter of Mary Stillahn, Confidential Secretary to the Merced County Housing Authority, which shed valuable light on the decision-making process of the project proponent. Chairman Sloan interrupted the member of the public numerous times.

Chairman Sloan denied the public its right to hear critical information during the testimony given by a County employee, Mr. Richard Graves, C.B.O., Deputy Building Official for Merced County. This testimony was not heard at the hearing held on February 27, 2008. The public, Commissioners, agencies, and staff did not have access to this information. Mr. Sloan not only interrupted Mr. Graves, he directed him to skip immediately to his concluding paragraph.

Department staff is not subject to time limits during a public hearing. Commissioner Sloan gave Mr. Graves five minutes. Mr. Graves’ letter included evidence of 22 omissions and violations.

Chairman Sloan censored public testimony and the other commissioners and County Counsel went along with it. He badgered, harassed and attempted to intimidate members of the public and County staff who were presenting information essential to public and the commission’s understanding of the Felix Torres project. He interfered with his own commission’s decision-making process. Chairman Sloan displayed outrageous bias in favor of project proponents and against important evidence from two public employees about deep flaws in this project.

At the Felix Torres hearing, the public also discovered that the County was ignorant of the recent legal settlement between Planada Community Services District and San Joaquin Raptor Rescue Center and Protect Our Water restricting the district’s wastewater capacity, which would impact this project if it were within the PCSD boundaries. The County was unaware that the project is outside of district boundaries, which means that the district cannot serve the camp.

Chairman Sloan’s conduct during the Felix Torres hearing was outrageous. We request that the Board of Supervisors direct him to reopen the public hearing on that project at the April 9 Planning Commission meeting and direct him review laws and regulations for running a public hearing in the state of California. If Chairman Sloan refuses, we request the Board to remove him from the Planning Commission.

Lydia M. Miller Steve Burke

Cc: Interested parties

| »

"Freedom to farm" goes on

Submitted: Apr 12, 2008

Apparently, Congress is going to come up with a new Farm Bill sometime this month. Below, we've included notes from a long perspective piece done by Dan Morgan and two other reporters on the Washington Post staff last July, which provides a little idea of what we're getting into with the 2007 (now 2008) Farm Bill again, in a presidential election year.

Badlands Journal editorial board
-------------

4-1-08
Merced Sun-Star
Farm bill barrels toward deadline...MICHAEL DOYLE

http://www.mercedsunstar.com/167/story/219835.html
WASHINGTON -- House and Senate negotiators on Thursday staged their first face-to-face bargaining session over a long-delayed farm bill, whose details are still being crafted in private. Eight months after the House passed its farm bill version, and four months after the Senate acted, negotiators convened for 45 minutes to start the final, crucial phase of their work.
"I know many of you had doubts we would ever make it to this point," said Rep. Collin Peterson, the Minnesota Democrat who chairs the House Agriculture Committee.
With lawmakers now facing an April 18 deadline, the outlines of a final package are already apparent. The bill will devote a record amount to fruits and vegetables, though less than specialty crop producers originally sought. Commodities like cotton, rice and wheat will largely retain their current subsidies. Some payment limits will be tightened, though not nearly as much as reformers hoped.
"I think we are probably 80 percent of the way through the technical issues," said Rep. Dennis Cardoza, D-Merced.
The remaining 20 percent, though, encompasses the toughest questions, including how to pay for new spending and how to craft a new permanent disaster program favored by Midwestern lawmakers. Negotiators expect to meet again by next Tuesday to assess progress...All told, the farm bill has a five-year price tag of $280 billion. More than half of this will pay for food stamps and other nutrition programs.
The package outline includes $1.35 billion designated for fruit and vegetable programs, which include block grants to states and specialty crop research. Several hundred million dollars in additional funding would pay for expanding an existing fruits-and-vegetables snack program to all 50 states. Currently, the healthy snack program is limited to 14 states, including North Carolina, Washington, Pennsylvania and Texas.
House members, in hopes of avoiding politically unpalatable tax hikes, now propose to offset some $5.5 billion of the farm bill's costs through improved tax compliance on business revenue from credit card sales.
7-2-06
Washington Post
Farm Program Pays $1.3 Billion to People Who Don't Farm...Dan Morgan, Gilbert M. Gaul and Sarah Cohen

http://www.washingtonpost.com/wp-dyn/content/article/2006/07/01/AR2006070100962.html
EL CAMPO, Tex. -- Even though Donald R. Matthews put his sprawling new residence in the heart of rice country, he is no farmer. He is a 67-year-old asphalt contractor who wanted to build a dream house for his wife of 40 years.
Yet under a federal agriculture program approved by Congress, his 18-acre suburban lot receives about $1,300 in annual "direct payments," because years ago the land was used to grow rice.Matthews is not alone. Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post.
Some of them collect hundreds of thousands of dollars without planting a seed. Mary Anna Hudson, 87, from the River Oaks neighborhood in Houston, has received $191,000 over the past decade. For Houston surgeon Jimmy Frank Howell, the total was $490,709.
"I don't agree with the government's policy," said Matthews, who wanted to give the money back but was told it would just go to other landowners. "They give all of this money to landowners who don't even farm, while real farmers can't afford to get started. It's wrong."
The checks to Matthews and other landowners were intended 10 years ago as a first step toward eventually eliminating costly, decades-old farm subsidies. Instead, the payments have grown into an even larger subsidy that benefits millionaire landowners, foreign speculators and absentee landlords, as well as farmers.
Most of the money goes to real farmers who grow crops on their land, but they are under no obligation to grow the crop being subsidized. They can switch to a different crop or raise cattle or even grow a stand of timber -- and still get the government payments. The cash comes with so few restrictions that subdivision developers who buy farmland advertise that homeowners can collect farm subsidies on their new back yards.
The payments now account for nearly half of the nation's expanding agricultural subsidy system, a complex web that has little basis in fairness or efficiency. What began in the 1930s as a limited safety net for working farmers has swollen into a far-flung infrastructure of entitlements that has cost $172 billion over the past decade. In 2005 alone, when pretax farm profits were at a near-record $72 billion, the federal government handed out more than $25 billion in aid, almost 50 percent more than the amount it pays to families receiving welfare.
The Post's nine-month investigation found farm subsidy programs that have become so all-encompassing and generous that they have taken much of the risk out of farming for the increasingly wealthy individuals who dominate it.
The farm payments have also altered the landscape and culture of the Farm Belt, pushing up land prices and favoring large, wealthy operators.
The system pays farmers a subsidy to protect against low prices even when they sell their crops at higher prices. It makes "emergency disaster payments" for crops that fail even as it provides subsidized insurance to protect against those failures...
"This was an unintended consequence of the farm bill," said former representative Charles W. Stenholm, the west Texas Democrat who was once the ranking member on the House Agriculture Committee. "Instead of maintaining a rice industry in Texas, we basically contributed to its demise."

Freedom to Farm

The program that pays Matthews was the central feature of a landmark 1996 farm law that was meant to be a break with the farm handouts of the past. Subsidies began when the Roosevelt administration stepped forward to support millions of Depression-era farmers suffering from low prices. By the early 1990s, U.S. agriculture was a productive marvel, yet was still mired in government controls and awash in complex subsidies.
When the Republicans took control of Congress in 1995, they brought a new free-market philosophy toward farm policy. In a break with 60 years of farm protections, they promoted the idea that farmers should be allowed to grow crops without restrictions, standing or falling on their own. The result was the 1996 bill, which the Republicans called Freedom to Farm.
The idea was to finally remove government limits on planting and phase out subsidies. But GOP leaders had to make a trade-off to get the votes: They offered farmers annual fixed cash payments as a way of weaning them off subsidies.
That sweetener was needed to win over wheat-state Democrats -- led by Senate Minority Leader Tom Daschle (S.D.) -- and GOP House members from rice and cotton districts. Wheat growers alone stood to receive $1.4 billion in the first year. The payments for rice growers were increased by $52 million at the last minute in an effort to win support from Sen. David Pryor (D-Ark.).
The new payments were calculated on a farm's "base acres," or production dating to 1981. For example, if a farmer had planted 400 acres of rice, he was entitled to a check of about $100 an acre, or $40,000, every year. The amount per acre varied depending on past production.
Sen. Thad Cochran (R-Miss.) used his power as chairman of the Appropriations subcommittee on agriculture to push through $3 billion in "emergency" assistance to grain, cotton and dairy farmers. That was only the beginning of a retreat by Republicans fearing retribution at the polls in key "red" states with broad farm constituencies.
"The original intent was to make a step in the direction of eliminating farm programs," said then-House Majority Leader Richard K. Armey (R-Tex.), who led an unsuccessful fight in the 1990s to trim the subsidies. "By 1998, there was no zeal left."

Instead of cutting, Congress ended up expanding the program, now known as direct and countercyclical payments. A program intended to cost $36 billion over seven years instead topped $54 billion.
"The farm policy we're pursuing now has no rhyme or reason, and we're just sending big checks to big farmers," said Gary Mitchell, now a family farmer in Kansas who was once a top aide to then-Rep. Pat Roberts (R-Kan.), the 1996 bill's House sponsor. "They're living off their welfare checks."
Efforts to overhaul the farm subsidy network have been repeatedly thwarted by powerful farm-state lawmakers in Congress allied with agricultural interests.
"The strength of the farm lobby in this town is really unbelievable," Armey said. "I don't think there's a smaller group of constituents that has a bigger influence."

'Cowboy Starter Kits'

Farmers and landowners benefited from the 1996 law whether their land once grew wheat, corn, cotton or any of the other subsidized crops. But nowhere is the impact more evident than in the sunbaked Texas rice country that spreads southwest from Houston to the Colorado River and east to the Gulf of Mexico.
In 1981, the Texas rice belt extended over about 600,000 acres. By last year, USDA records show, the amount of planted rice had shrunk to 202,000 acres, partly because landowners were able to get farm payments even if no rice was grown on their land.
In fact, so many landowners and farmers are collecting money on their former ricelands -- $37 million last year alone -- that the acres no longer used for rice outnumber the planted ones.
"So many wealthy people are getting so much money off this, it's going to be hard to cut," said Michael Wollam, a rice farmer from Brazoria County.
At a housing development rising from old rice fields on the outskirts of El Campo, 70 miles southwest of Houston, local real estate broker John K. Petty purchased a 75-acre tract from investors in July 2002. He held on to it for a few months, then carved it up and resold it for housing.
"At one time, the area was all farmed in rice," Petty said. Now, the dusty tract is perfect for what he calls "cowboy starter kits," residential tracts owned by nonfarmers but still large enough to keep a horse in the back yard
The payments were unrestricted -- farmers got them whether or not they grew any crops, or whether prices were high or low.
Owners could do almost anything they wanted with their land, as long as they did not develop it. They could leave it fallow or rent it for pasture. They could set up a hunting retreat. Or, as happened in some Louisiana parishes, landowners could collect payments while planting stands of commercial timber.
Supporters said these annual payments gave farmers the flexibility to switch from one crop to another as market conditions changed, or even to sit it out in a year of low prices. In addition, the payments fit with international trade rules that frown on traditional price supports.
The annual payments were dubbed "transitional" and were supposed to decline over seven years. Many lawmakers assumed they would eventually end. But two years later, farm prices fell sharply, and the Republican-led Congress gave in to the farm lobby.
Petty informed potential buyers that because their land had once been an active rice field, they could collect an annual payment from the USDA on the portion that was not developed. They did not have to grow rice or anything else.
"If you have 10 acres and build a house on one, you can continue to get farm payments on those other nine acres without farming," the USDA's Johnson said. Petty used it as a selling point.
"Does it increase the marketability?" Petty asked. "Sure it does"...
In some Texas counties, the federal payments open the door to another benefit: property tax reductions.
"When a property owner receives a federal payment, the land is considered agricultural use and is assessed at that lower rate," explained Tylene Gamble, the chief appraiser for Wharton County, where El Campo is located. The discount can be dramatic. For example, she said, a parcel might be assessed at $55 an acre for agricultural use but $3,000 for regular use. "It's big," Gamble said.
Gamble is trying to enforce local rules that require landowners to actually farm to qualify for the lower tax rate. But she is hampered by the federal government's definition of farming, "which does not require you to actually farm. There is a conflict there between the federal definition and our definition," she said.
Gary Underwood, director of agricultural appraisals for sprawling Harris County, which includes Houston, said owners are building $500,000 houses on old rice fields and qualifying for tax breaks.
He singled out one tract where the owner built a 4,000-square-foot single-story house on five acres in Katy, a booming suburb. The house sits on one acre. The other four acres get a tax break and a farm payment. "I can't touch him," Underwood said.

The Big Landowners

The large landowners who control vast sections of the once-sprawling rice fields outside Houston have been some of the biggest beneficiaries of the 1996 law, USDA records show.
Diana Morton Hudson is a corporate securities lawyer whose 87-year-old mother, Mary Anna Hudson, owns an interest in two tracts of land in nearby Matagorda County. USDA records show that Mary Anna Hudson has received $191,000 since 1997 on land she doesn't farm. "We just pay someone to mow it, and it just sits there," Diana Hudson said.
Later, she added: "I'm a corporate securities lawyer. I couldn't even locate these two parcels in Matagorda."
Houston heart surgeon Jimmy Frank Howell has received $490,709 since 1996 in payments tied to old rice tracts on a vast ranch near Raywood in Liberty County where he now raises cattle, USDA records show. The last rice produced on the 10,000-acre property was "probably over 10 years ago," according to Susan Cotton, Howell's business manager. "We're not rice producers anymore"...
Among the most fervent critics of the annual payments are hundreds of Texas farmers who rent land on which they grow rice. Under the rules, tenants receive the money if they operate the farms. But landlords can simply increase rents to capture those payments.
Other landlords have evicted the tenants from land they had farmed for years. Then the landowners can collect the checks themselves, even if they do not farm.
Congress "made slaves out of every farmer who was a tenant," said Stephen J. Zapalac, a former Matagorda County rice farmer who now runs a farm credit office in Bay City.
In 1998, Zapalac was leasing 2,500 acres, most of it for rice farming. One landlord canceled a lease for 1,400 acres in 1998, he said, and a second cancellation followed for the rest in 2004.
"As soon as they figured they could take the payments, they said, 'I don't need you anymore,' " he said. "They were renting me land for $40 an acre, but they could get $125 an acre from the government."
Some of the rice land he lost has been turned into pasture for cattle, while the landlord continues to receive the rice money.
"You can sell the calves and still stick the rice payment in your pocket," Zapalac said. "It's a hell of a deal"...

| »

"Aqua," the puppet show

Submitted: Apr 12, 2008

During the real estate bubble the government pumped too much water out of the Delta. This caused such a loss of salmon smolts that now the commercial salmon season has been shut down for a year in California and Oregon. This means emergency relief must be found for fishing towns and villages dependent on the Pacific salmon fishery. Meanwhile, the credit crunch, in the wake of the crash of the real estate bubble goes on. Students can't get loans. Banks must increase their capital, and the California state Legislature must pretend it is coming up with a water policy. The size and the richness of the resources of the state are producing politicians performing an entertaining neo-Medieval puppet show called "Aqua." The strings are being pulled by arthritic giants.

Badlands ...
-------------------------

4-12-08
San Francisco Chronicle
End of coast's 150-year-old fishery looms...Carl Nolte

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/12/MNAB104836.DTL
The ban on all commercial and sport fishing for chinook salmon in California and most of Oregon this year could be the beginning of the end for a whole way of life.
Commercial fishing is an industry that is deep in the heart of life along California's 1,000-mile coast, where fishing ports from Crescent City to Morro Bay have supported generations of fishing families.
Now, for the first time since commercial fishing began on the West Coast more than 150 years ago during the Gold Rush era, no boats will be permitted to put to sea to fish for chinook, the fabled king salmon that is the mainstay of the commercial fishery.
The ban is only for one year, but it could be a death blow to an industry that has been in decline for years. As recently as 15 years ago, 4,000 small boats fished off the California coast for salmon; now the salmon fleet numbers only 400...
The money is in the salmon fishing
The trouble is that skippers like MacLean count on salmon for 70 percent of their fishing income. There are other fisheries on the coast - crab, rockfish, herring - but the money to make the business pay is in the salmon...
Crab fishing is costly, needs a lot of gear
Why don't fishermen go for other fish? Fishing for crab is expensive. It requires a lot of gear, like crab pots. The season is at its peak right at the opening, in mid-November, and then declines rapidly. At the end of the season, not many crab are left.
A few salmon boats could fish in Alaska, but a permit is needed for that fishery. MacLean says a permit would cost $60,000 - too much for small-boat fishermen.
Then there are rockfish, just off the California coast. Rockfish are endangered, too...
The herring have disappeared, too....
It's tourists who feed Cannery Row now
The coming and going of fish is a bit of a mystery. John Steinbeck wrote about sardines and life in the Monterey canneries in "Cannery Row." The fish disappeared over a couple of years, and Cannery Row is now a tourist attraction, where restaurants offer "catch of the day," mostly farmed or frozen fish.
There seems to be no great mystery about the collapse of the salmon fishery.
"Salmon are trapped between human population growth, economic development, degradation of environmental quality and the politics of public policy," Montgomery wrote.
There are a lot of reasons the population of salmon returning to their spawning grounds on the Sacramento River and its tributaries dropped from 800,000 six years ago to 68,000 last year.
Some say the food chain in the ocean has changed; some say global warming has made the ocean too warm for the fish, and you can find fishermen who think the fishery has been mismanaged. Maybe it was overfishing. Maybe, as Fitzpatrick thinks, the fry from fish hatcheries were dumped in the bay from pipes, and, stunned, were eaten by predators.
Then there are the dams. Over the last 60 or 70 years, California has diverted most of the flow of its water from the Central Valley to farms and Southern California.
The rivers that drain the Sierra used to flow through the valleys and into the ocean; millions and millions of gallons poured through the Golden Gate.
First Shasta Dam diverted water from the Sacramento; then the Friant Dam was built to take water from the San Joaquin River. All these rivers and their tributaries were prime salmon runs...
Then the state built the California Water Project, diverting the flows of the Sacramento and Feather rivers. One result was the collapse of the delta smelt, a small fish that is thought to be the bellwether of the health of the Sacramento-San Joaquin River Delta.
All the salmon, returning to spawn or swimming downstream to the ocean, must pass through the delta. "The delta," said Collins, "is just a sewer now."
"Without water, the fish can't live," he said. "We sacrificed the fish for farms and to water lawns."
Whatever the reason, the salmon and the fishermen are in big trouble...
4-11-08
Portland Business Journal
Smith, Wyden and Kulongoski seek salmon relief

http://www.bizjournals.com/portland/stories/2008/04/07/daily49.html
Oregon's two U.S. senators and Democratic governor have begun lining up relief funds after salmon fisheries were closed up and down the West Coast last night.
Sens. Gordon Smith (R) and Ron Wyden (D) asked Commerce Secretary Carlos Gutierrez to declare a "fishery failure" after the Pacific Fishery Management Council closed salmon fisheries along the West Coast. The declaration will allow Congress to provide disaster assistance for affected communities.
Oregon Gov. Ted Kulongoski has already declared a state of emergency for some coastal areas. He's dedicating $500,000 in strategic reserve funds to the fishing-reliant communities expected to suffer from the record-low projected salmon run.
The moves come after poor projections of available Sacramento River fall Chinook, as well as the expected dwindling numbers of coho salmon running from Oregon and Washington.
The fall run of Sacramento River chinook salmon typically helps fisheries catch more than 800,000 fish annually. This year's class of returning adults is projected at fewer than 53,000 salmon.
"This will be devastating to the communities and families on the coast that rely on salmon fishing for their livelihood," Kulongoski said in a statement. "Our job now is to help these communities make ends meet during this difficult time and to fight for federal assistance to help them for the longer term."
Smith and Wyden, in a letter, told Gutierrez that the season "will be the most restrictive in West Coast history, and will have an extremely negative impact on recreational and commercial fishermen and supporting businesses up and down our coastline."
Oregon and California fishing companies received $60.4 million in disaster relief last year after a slow 2006. ..
Modesto Bee
Regulators vote to cancel salmon season to save ailing chinook...DONNA GORDON BLANKINSHIP (AP)

http://www.modbee.com/state_wire/story/265877.html
Federal fisheries managers have voted to ban chinook salmon fishing off the California coast and most of Oregon this year to reverse the dramatic decline of one of the West Coast's biggest wild salmon runs.
The regulations approved Thursday by the Pacific Fishery Management Council are the most severe restrictions in the history of Pacific Coast salmon fishing.
The panel voted to allow limited sport fishing for coho salmon on holiday weekends off the Oregon coast, but no commercial or sport fishing for chinook salmon will be allowed south of Cape Falcon in northern Oregon.
The council's decision still must be approved by the National Marine Fisheries Service before May 1, the start of the commercial season...
Stockton Record
Coastal salmon fishing all but banned for year...Alex Breitler

http://recordnet.com/apps/pbcs.dll/article?AID=/20080411/A_NEWS/804110327/-1/A_NEWS
SEATTLE - Fishery managers on Thursday all but shut down salmon fishing in the ocean for 2008, a move that will likely trigger restrictions for sport fishermen in California rivers and streams.
The Pacific Fishery Management Council banned fishing off the California and Oregon coasts, with the exception of a very limited recreational catch.
The new restrictions on West Coast salmon fishing were said to be the toughest in history...
The California Fish and Game Commission will decide in coming weeks whether any inland salmon fishing is permitted. A spokeswoman said the commission has been waiting for the council to act first.
In an analysis written last week, Peter Moyle, a University of California, Davis, professor and expert on native fish, said salmon have been declining for more than a century thanks to mining, logging, levees, dams and unregulated fishing.
Most recently, less food has been available in the ocean, perhaps causing salmon to "starve away." However, Moyle, too, points to the Delta as a long-term cause for decline.
The pumps trap fish and change the temperature and water flows in the estuary. Near Stockton, the San Joaquin River is too warm and polluted to support many salmon, and federal funds to restore the river have not materialized, Moyle wrote.
"Blaming 'ocean conditions' for salmon declines is a lot like blaming the iceberg for sinking the Titanic, while ignoring the many human errors that put the ship on course for the fatal collision," Moyle wrote.
The fishery council has been meeting all week in Seattle to decide a course of action. The council has said that even with a complete fishing closure, the number of salmon returning to spawn in 2008 may not be much higher than last year...
San Francisco Chronicle
Battling Upstream
The tribes on the Klamath know that as the river goes, so go the salmon...Glen Martin

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/11/CMD4V8F7E.DTL&hw=conservation&sn=011&sc=348
The Klamath River surges just below Merk Oliver's house. Right now, the water is slightly turbid, clouded and green - perfect for steelhead fishing. The Klamath is the second largest river in California, following the Sacramento, and its watershed encompasses a landscape that seems removed from the rest of the state by time as well as distance. Freeways, the digital economy, the entertainment industry, industrial agriculture - up here they seem like ill-recalled dreams.
But what happens on this river affects Lower California greatly. It determines whether commercial fishermen and recreational anglers can take salmon - and whether there'll be fresh wild salmon in markets and restaurants in San Francisco and Los Angeles. Ultimately, it figures into the availability of water for the state's homes and farms...
But like most rivers in North America, the Klamath has suffered. Agricultural water diversions have depleted the river's once mighty flows; four moderately sized hydroelectric dams along the Klamath's main stem - plus a huge dam on its major tributary, the Trinity - have greatly reduced the spawning grounds for anadromous fish. ..
The Klamath always has been a major front in California's water wars, one that has waxed especially hot throughout the Bush administration...
The situation on the Klamath has far-reaching consequences - all the way down to Monterey. The scarcity of Klamath fish has resulted in multiple truncated commercial salmon seasons for California and Oregon, because the Klamath fish mingle with the nominally more plentiful Sacramento River salmon in the open ocean. As the Klamath goes, then, so go the fortunes of the West Coast's commercial fishing fleet - and the Bay Area availability of fresh wild local salmon...
Salmon fishing closed for California, Oregon
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/10/MNO6103NBB.DTL
-- No commercial or recreational salmon fishing will be allowed off the coast of California and most of Oregon this year.
The Pacific Fishery Management Council voted Thursday to cancel the chinook fishing season in an effort to reverse the catastrophic disappearance of California's fabled run of the pink fish popularly known as king salmon...
Just hours after the vote, Gov. Arnold Schwarzenegger declared a state of emergency and sent a letter to President Bush asking for his help in obtaining federal disaster assistance. In addition, the governor's office announced that Schwarzenegger will sign legislation to appropriate about $5.3 million for coastal salmon and steelhead fishery restoration projects.
The Pacific Fishery Management Council, meeting in SeaTac, Wash., considered a variety of options for saving the salmon because too few fall-run chinook came back to spawn in the Sacramento River and its tributaries in autumn.
Fishing ban the only option
In the end, it decided the only option was to halt fishing throughout the salmon habitat all along the California and Oregon coasts, the first time that's happened since the federal agency was created 22 years ago to manage the Pacific Coast fishery.
Millions in losses
If the ban holds, it would mean the loss of $20.7 million that commercial and recreational salmon fishing brings into the California economy each year. The 400 or so commercial fishermen in the state stand to lose 70 to 80 percent of their annual incomes.
Losses in Oregon would top $9 million. At least 1,000 fishermen troll the waters for king salmon between Santa Barbara to Washington state...
Inside Bay Area
Pharmaceuticals flowing into Bay, hazards unknown
Dilution of chemicals may spare marine life from harm, experts suggest...Julia Scott

http://www.insidebayarea.com/oaklandtribune/localnews/ci_8888846
Headache remedies. Plasticizers. Insect repellents. Perfumes.
A laboratory list of man-made chemical compounds inhabits the murky waters of San Francisco Bay, their effects on underwater life unknown.
Many of these chemicals, such as polybrominated diphenyl ethers, phthalates, nonylphenols and musks, are a class of contaminants known as endocrine disrupters that were detected in all parts of the Bay in a study done in 2002. Wastewater treatment plants don't screen for them because the Environmental Protection Agency doesn't require them to, and they end up in the Bay after flowing down the drain or being ting flushed down the toilet.
Even less is known about the effects pharmaceuticals are having on the Bay. Acetaminophen was the only pharmaceutical compound detected in the water in the 2002 report by the San Francisco Estuary Institute, but wastewater agencies now say they fully expect that future Bay water tests will reveal a much wider range of drugs humans have flushed into the Bay, either in unused pill form or as something taken and excreted.
A recent Associated Press investigation revealed growing concern among scientists that more research is needed to assess the health effects of this accumulating body of pharmaceuticals, 100 different varieties of which have been detected in the drinking water supplies of 24 major metropolitan areas. The cities all receive water from rivers and reservoirs containing treated wastewater, and therein lies the problem.
From Las Vegas' Lake Mead to the Potomac River outside Washington, D.C., researchers have found strange effects in fish and toads exposed to treated water containing pesticides, hormones such as estrogen from birth control pills, and drugs in soaps and shampoos: male carp suddenly producing egg yolk proteins, kidney failure in vultures, algae with stunted growth...
Mike Connor, executive director of the San Francisco Estuary Institute, believes many of those chemicals are already in the Bay, although they are too diluted here to cause concern for the health of fish and ocean mammals.
Estrogen, steroids, chemotherapy medications — these are among the most common pharmaceuticals found in waterways that receive wastewater, and a forthcoming Estuary Institute survey of water-borne pharmaceuticals entering and leaving wastewater treatment plants around San Francisco Bay will reveal it is no different...
Many wastewater agency officials said pharmaceutical testing and restrictions are inevitable, although they're not looking forward to the burden it will impose...
Part of the problem is there are no reliable ways of testing for the hundreds of drug compounds on the market, and more are being developed every day, said Richard Luthy, chair of Stanford University's Department of Civil and Environmental Engineering...
Los Angeles Times
Conserving California's water
Do we need to focus more on reining in consumption, and are consumers too shielded from the real cost of delivering water? Lester Snow and Mindy McIntyre debate.
Today, Snow and McIntyre consider how best to conserve water. Previously, they discussed the political urgency of fixing the state's water crisis, the proposed peripheral canal around the Sacramento-San Joaquin River Delta, population growth and the filtering of ocean water.
Conservation without the pain...By Lester Snow

http://www.latimes.com/news/opinion/la-op-snow-mcintyre11apr11,0,2032091,print.story
California needs to set the standard for water conservation.
Many communities have already invested in water efficiency and reaped the benefits from such programs as drought-tolerant landscaping and appliances that use less water. Last summer, water agencies throughout the state successfully implemented voluntary conservation programs to curb water use, after one of the driest winters on record.
But we know there is a lot more that can be done.
The California Water Plan Update estimates that up to one-third of current urban usage could be saved each year with existing technologies. This includes installing efficient sprinklers and drought- tolerant landscaping; expanding the use of water meters and upgrading an estimated 10 million toilets that were installed in houses and offices before the 1990s.
Last month, Gov. Arnold Schwarzenegger called for a 20% reduction in per-person water use in urban areas by 2020. Urban water users consume 8.7 million acre-feet per year, and under this plan, Californians would save enough water to serve more than 2 million families a year.
Water conservation has other important benefits. Lowering water demand stretches our water supplies and reduces pressure on the delta.
It saves energy that would otherwise be needed to pump and move water, and can reduce greenhouse gas emissions.
Saving water saves money too. Because most Southern Californians have seen water costs increase significantly in recent years, stretching those supplies through conservation make good sense.
The state is prepared to help communities make these changes. The Department of Water Resources recently announced that it will give $35 million in grants for local water agencies to implement water conservation programs.
This includes nearly $5 million to improve water-efficient landscaping, with two of the largest awards to the city of Los Angeles ($1.65 million) and the Municipal Water District of Orange County ($831,000). Landscaping consumes a large amount of urban water. About half of the typicsl home's water is used outdoors, so encouraging more efficient systems offers the greatest potential for urban water conservation.
Water is a precious resource. As our state grows, as our climate changes, as we balance environmental needs with reliable water supplies, conservation becomes increasingly important.
Lester Snow is director of the California Department of Water Resources
An AB 32 for water ...By Mindy McIntyre
Nice goal; here's some action:

It is a pleasure to agree with you, Lester, that water conservation is critically important to California's future. There is no question that California must take measures to reduce water consumption. The governor and his administration's call for a 20% reduction in per capita water use is a very good start. However, in order to actually implement that call, the governor will need to take water reductions as seriously as he has taken reductions in greenhouse gases, and make this the AB 32 of water.
We've seen in the past that statewide goals mean very little without dedicated momentum and directed implementation plans. In 1992, the state set a legally mandated "goal" of producing one million acre feet of recycled water by 2010. We are way off target toward meeting that goal, with only half of that production in place in 2008.
Fortunately, this governor has delivered on big initiatives before. When the governor took an interest in the very critical issue of climate change, he signed into law AB 32, the Global Warming Solutions Act of 2006. His action put into motion major statewide efforts to reduce greenhouse gas production in California by 25% by 2020. All state agencies are engaged in developing real implementation measures to deliver those reductions.
As with climate change, the legislature is considering passing two measures that would provide the governor with the policies and mechanisms to meet his water goal. Those two complementary components are Assembly Bill 2153 and AB 2175.
As I mentioned on Wednesday, Assemblyman Paul Krekorian's (D-Burbank) AB 2153, the Water Efficiency and Security Act, would decrease per capita water use. AB 2153 would require new development to be water efficient, and would implement a mechanism to fully mitigate all water demand from new development. The act would provide a powerful water-reduction tool that is not reliant on state bonds or existing water customers' water rates.
Another crucial component of implementing the governor's targets is AB 2175, which would promote increased water use efficiency by establishing numeric water-savings targets for urban and agricultural water use. AB 2175 would require the state to adopt a comprehensive water conservation plan with feasible, cost-effective water conservation targets. Each water agency in the state would then be required to develop plans for implementing its share of the conservation target.
If passed by the legislature, these two complementary bills would provide the action, action, action that is necessary to implement the governor's call and ensure that California effectively increases water efficiency. Without real action, California will not reduce water consumption. Instead, our people, economy and environment will experience the fallout of poor water planning.
Mindy McIntyre is the Planning and Conservation League's water program manager.
San Diego Union-Tribune
Lenders taking a pass on helping college students pay for education...Marcy Gordon, ASSOCIATED PRESS
http://www.signonsandiego.com/news/education/20080411-1752-lenders.html
WASHINGTON - Lenders are dropping out of the federally backed student-loan business in droves, fleeing an environment squeezed of cash because of the credit crunch.
The call for government action is getting louder, just as the piles of loan applications on the desks and kitchen tables of students headed to college next year grow higher.
Forty-six student-loan providers have stopped making the federally guaranteed loans, either temporarily or permanently.
Distress in the $330 billion market for auction-rate securities in recent months has rippled into the student-loan market, and several states have suspended their college-loan programs. The 46 lenders accounted for 12 percent of the federally backed student-loan market, according to FinAid.org, a Web site focused on student lending.
Companies including Washington Mutual, Sovereign Bancorp, College Loan Corp., CIT Group, NorthStar Education Finance, HSBC Bank and Zions Bancorp have stopped issuing federally guaranteed student loans in recent weeks. And state agencies in Iowa, Michigan, Montana and Pennsylvania have suspended college-loan programs.
The major federal student-loan program is providing an estimated $50 billion in loans to 6.4 million students in the current academic year.
Amid the housing-and financial-market turmoil and the $30 billion federal rescue of stricken investment bank Bear Stearns Cos., politicians are making the case that access to education, like homeownership, is a vital social goal that deserves protection...
No student has been unable to get a loan - a fact pointed out by Education Department officials and some education experts. With about 2,000 lenders participating in the Federal Family Education Loan Program, other lenders have been able to jump in when affected lenders stopped making loans, they say.
The entire student-loan industry has been under pressure for some time, however. Student-loan legislation that took effect in October halved the interest rates on federally backed student loans, but paid for that by cutting $20 billion in federal subsidies to student lenders. In addition, rising delinquencies starting last year on student loans became a problem - especially for private student loans, those that aren't backed by the government and have higher interest rates that aren't capped.
Sallie Mae, the nation's largest student lender, said in late January that it would cut back on its private loans to students at colleges with poor graduation rates. Another challenge for parents is that home prices are sinking in much of the country, making it harder to tap into home equity to pay tuition bills...
Washington Post
A Weekend to Start Fixing the World
As Finance Ministers Convene Here, Multiple Crises Test Their Ability to Cope...Neil Irwin and Michael A. Fletcher

http://www.washingtonpost.com/wp-dyn/content/article/2008/04/10/AR2008041003867_pf.html
Financial markets are tumbling. The world economy is starting to sputter. Food prices have shot up so far, so fast, that there are riots in the streets of many poor nations.
It's a hard time to be one of the masters of the global economy.
Those leaders -- finance ministers from all over the world -- are gathering in Washington this weekend to sort out their reactions to the most profound global economic crises in at least a decade. The situation could reveal the limitations that international economic institutions face in dealing with the risks inherent to global capitalism.
"There's got to be something coming out of the weekend, a way to visibly assume public responsibility for trying to limit the damage that financial markets can do to our society," said Colin Bradford, a senior fellow at the Brookings Institution. "The pressure is on politicians this weekend to come up with an answer. . . . What is the power structure going to do about this?"
The Group of Seven finance ministers of major industrialized countries meet today, and the governing boards of the International Monetary Fund and World Bank will meet tomorrow and Sunday. Their agendas: in the case of the G-7 and IMF, countering the breakdown in financial markets; in the case of the World Bank, food inflation that threatens to drive more of the world's poorest people into starvation...
CNNMoney
Banks set to stumble again
Wall Street expects ugly first-quarter results from Citigroup and Merrill Lynch. And the worst may not be over for financials just yet...David Ellis

http://money.cnn.com/2008/04/10/news/companies/bank_earnings/index.htm?postversion=2008041115
NEW YORK (CNNMoney.com) -- When Citigroup and Merrill Lynch each fessed up to nearly $10 billion in losses last quarter, investors believed the companies had finally scrubbed their books clean.
Those hopes were a bit premature.
"The fourth quarter felt like the kitchen sink [quarter]," said Jaime Peters, a bank stock analyst at Morningstar. "We are going to find out it necessarily wasn't."
Citi and Merrill are among a group of major financial firms due to deliver ugly results for the first quarter in the coming week.
The first quarter was marked by the near collapse of Bear Stearns, continued credit market woes and increased signs that the U.S. economy is indeed in a recession.
Of the six banks and brokers scheduled to report results in the next few days, three are expected to post a loss - Merrill Lynch (MER, Fortune 500), Citigroup (C, Fortune 500) and Washington Mutual (WM, Fortune 500), according to estimates from earnings tracker Thomson Financial.
JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500) and Wachovia (WB, Fortune 500) are expected to report a drop in earnings from a year ago.
And Bank of America (BAC, Fortune 500) is also forecast to report a steep decline in earnings from a year ago when it releases its results on April 21.
Overall, analysts anticipate that the banks' results won't be quite as bad as they were when they announced grim fourth-quarter results three months ago. But banks still find themselves squeezed by many of the same problems that plagued them at the end of 2007.
Old problems remain ... new ones crop up
Citi and Merrill are expected to announce yet another series of writedowns due to eroding values of mortgage-backed securities and leveraged loan portfolios.
Other areas have started to show increasing signs of deterioration as well. Home equity loans, for example, have become a source of trouble for banks as housing prices continue to spiral lower...
Hit on all sides
The bad news isn't limited to loan portfolios, either.
When the Federal Reserve aggressively cut interest rates earlier this year, the expectation was the cuts would boost banks' net interest margins, a key measure of the profit banks make from taking in deposits and lending them back out.
But competition for customers has been so tough that banks have been unable to cut their deposit rates as much as they would have in the past.
At the same time, companies with sizeable investment banking divisions like Citigroup, JPMorgan Chase and Merrill Lynch are expected to be hit by a slowdown in merger and initial public offering activity. Merger advisory and equity underwriting are two key sources of lucrative fees for investment banks.
Still, bank CEOs will do their best to soothe investors, even as there are few signs that their results will improve anytime soon...

| »

UC Gargantua, the monthly update

Submitted: Apr 19, 2008

With apologies to Rabelais, a question, not serious certainly: How did a large expanse of land, containing a majestic mountain range, a fertile plain often flooded, 15-20 raging rivers, a mountainous coast containing a few tiny seaports and some good bays, populated 160 years ago by 100 Indian tribes too small to do more than squirmish with each other, the owners of some scattered Mexican land grants, a string of mining camps in the Sierra foothills and the odd sailor or farmer, grow so large that it cannot provide enough water
for its present residents?

Seriously, an educated population would not be so stupid. But, of course, this is not a serious question because it is about California, a state that has been incapable of governing itself due to the cancerous growth of its population for at least 40 years. Yet it has what is invariably described at the "greatest," "the best," and always "the largest" system of public higher education "in the world." With such a magnificent edifice to higher education and research, how could California have reached such an elemental impass?

That, too, isn't a serious question because we are talking about the University of California Gargantua, inventor of nuclear weapons, midwife to the biotechnology revolution, mother of countless pesticides and so many other boons to humanity the mind swoons to even try to imagine how much good UC has done California and the world. How fondly we recall UC's recent contribution to air pollution science with its studies on cow farts. And just last week, UC scientists announced that agricultural crops were a
significant source of hundreds of tons of hydrocarbons, the key component of smog.

However, lest you think that science is fragmentary and nonsensical and never really gives us answers, UC Merced, our own local bit of The Blue and The Gold, The Golden Bobcat Itself, is only asking $200 million in public funds to establish a medical school right here in the worst air-pollution zone in the nation. When you put the flatulence from cows, almonds, cotton and sundry row crops together, mix with diesel exhaust and
commuter cars and you got beige skies and the highest child asthma rates in the nation. You also have an ideal location for a medical research facility specializing in respiratory illness.

So, from an educated perspective, your child's misfortune is a benefit for a medical researcher. So, be happy. Progress is happening all around you, thanks to the benefits of the greatest research higher education institution in the world, your one and only UC Gargantua, the Real Big School. You should be happy that your environment has given you this unique opportunity to serve the cause of higher education and research science.

Managing the Real Big School takes a Real Big Man for a Real Big Salary.

Richard Blum, the husband of Sen. Dianne Feinstein and chairman of the UC Board of Regents, doesn't think much of the current president of UC. He wanted a more dynamic fellow in the chair. So, he went out and bought in Texas, for a salary of about a million dollars of public funds a year, about 76 percent more than his predecessor, receives, 80 percent more than the Hun, our governor, receives, but only 60 percent more than The Decider, Mr. Mission Accomplished in the White House receives.

Richard Blum, chairman of the UC Board of Regents, said when the appointment was
announced. "One of the problems the university has had is we need to step up and be competitive."

UC is already the largest public higher education research university in the nation (or the world, the press and UC are vague on the difference), so UC cannot be competing with mere universities. Given the paltry sum the president of the US receives, UC cannot be competing with just any old imperial powers on the planet. We think Blum seeks to lead UC to become the world's largest public higher education research kleptocracy, perhaps using former Soviet republics as his model.

How long will it be before the UC budget will be larger than California's budget? It's not a serious question, because no one knows the size of the UC budget anymore than anyone knows the size of the Pentagon budget. The less you know about the UC budget the better. Otherwise you might fret, which would be serious.

UC Gargantua bills itself as a 10-campus system open to high school graduates with 3.0 gpa's, per the Master Plan for Higher Education (1965 -- when state population was half of what it is today). But, as in its budgets and executive compensation packages, other things keep cropping up. Outside of the New Mexico Los Alamos National Laboratory, of course. The latest revelation is "UC Moorea," located in the Society Islands (Tahiti et al) in the South Pacific. Its official name is the Richard B. Gump South Pacific Research
Station in honor of the donor of the land, long-time owner of Gumps,

An emporium of engaging galleries featuring advanced, classic and custom jewelry, Asian,
American and European art objects, mastercrafts, gifts and decorative home accessories. This East/West shopping experience also includes the world's best selelctions of crystal and china, a vast collection of silver, along with bed, bath and personal, ambient frangrance selections.

Gump himself was for more than 50 years to arbiter of taste and refinement in Pacific Heights salons, bon vivant, musician, denizen of the South Pacific and leader of a once famous SF oom-pah band.

UC-Moorea, known as the university's "best-kept secret," is 35 acres of South Pacific paradise, but, according to UC's superbly confected flak, it is doing serious research in several views, including biology, archeology and sustainable development.

One subject that must be excercising the best biological minds at UC is the outbreak of Glassy-Eyed Sharp Shooters, bearing the evil Pierce's Disease, that have arrived and florished on the Society Islands since 1999. This is a serious research topic, so don't take it seriously, this is just the monthly update on UC Gargantua.

And if you really don't want to take something seriously, we suggest you consider a recent Australian scientific expedition to Bikini Atoll, site of numerous nuclear tests in the 1950s. The coral around Bikini, the Aussies report, has regenerating and grown very tall and imposing. However, geiger counters "go berzerk" around the coconuts, still too contaminated after all these years for anybody's consumption. Does coral get cancer?

Best to stay on Moorea sipping mai tais beneath the banyan chit-chatting about sharp shooters and research assistants' bikinis. Part of being "competitive" is never remembering your past.

There is so much else to report about UC Gargantua the mind reels at the responsibility. UC Merced Chancellor Steve Kang was recently back in Washington DC meeting congressional staff to make relationships, not to ask for (and be refused) money. We thought UC had lobbyists to meet with congressional staff and that campus chancellors might get to run with the big dogs. But UC Merced, known as "The Boondoggle," is not actually very reputable back where the public funds flow. However, Kang did stop by the Department of Energy, which has some sort of vague oversight over nuclear labs like Livermore and Los Alamos. A bombing range to go with the fantasy medical school? Perhaps the San Joaquin Valley population is not yet sick enough to get the big medical bucks so Merced is still in the Tracy league of bombs and biological warfare labs. (And cow farts, of course, along with a research station in Yosemite for biologically inclined hikers.)

Nevertheless, Professor John Yoo, of torture-memo fame, is back in the news. Yoo teaches law at UC Berkeley Boalt Hall. The House Judiciary Committee has summoned him to testify after his recent Esquire interview. This morning, the UK Guardian reviewed a new book on torture at Guantanamo, in which top military brass make an interesting case that all the responsibility for US military torture of captives should be placed squarely on the shoulders of Bush adminstration lawyers, including Yoo.

The Bush administration has tried to explain away the ill-treatment of detainees at Guantánamo Bay and Abu Ghraib prison in Iraq by blaming junior officials. Sands' book establishes that pressure for aggressive and cruel treatment of detainees came from the top and was sanctioned by the most senior lawyers.

Myers was one top official who did not understand the implications of what was being done. Sands, who spent three hours with the former general, says he was "confused" about the decisions that were taken.

Myers mistakenly believed that new techniques recommended by Haynes and authorised by Rumsfeld in December 2002 for use by the military at Guantánamo had been taken from the US army field manual. They included hooding, sensory deprivation, and physical and mental abuse. (Myers is evidently way too high in the brass to actually read the manuals himself -- ed.)

"As we worked through the list of techniques, Myers became increasingly hesitant and troubled," writes Sands. "Haynes and Rumsfeld had been able to run rings around him."

Myers and his closest advisers were cut out of the decision-making process. He did not know that Bush administration officials were changing the rules allowing interrogation techniques, including the use of dogs, amounting to torture.

"We never authorised torture, we just didn't, not what we would do," Myers said. Sands comments: "He really had taken his eye off the ball ... he didn't ask too many questions ... and kept his distance from the decision-making process."

Larry Wilkerson, a former army officer and chief of staff to Colin Powell, US secretary of state at the time, told the Guardian: "I do know that Rumsfeld had neutralised the chairman [Myers] in many significant ways.

"The secretary did this by cutting [Myers] out of important communications, meetings, deliberations and plans.

"At the end of the day, however, Dick Myers was not a very powerful chairman in the first place, one reason Rumsfeld recommended him for the job".

He added: "Haynes, Feith, Yoo, Bybee, Gonzalez and - at the apex - Addington, should never travel outside the US, except perhaps to Saudi Arabia and Israel. They broke the law; they violated their professional ethical code. In future, some government may build the case necessary to prosecute them in a foreign court, or in an international court."

I know I feel more secure just knowing that John Yoo is teaching future California lawyers. About the time we hit 50 million people, the state will need legal architects of the totalitarianism necessary to really govern once again, after term limits will have given way to "unitary executive" power in the governor's office and the UC president will be making a billion a year and the university will be rejecting 6.2581 gpa's from our state's finest gated public high schools.

Meanwhile, California high school graduates with adequate gpa's can't get into the UC campus of their choice and more may have to come to UC Merced as a result, treating the campus as a glorified junior college for the first two years of their undergraduate careers. Nevertheless, jocks still get the nod at the campus that chose them, regardless of their gpa's.

It is always difficult to conclude our updates on UC The Gargantuan "Scientific" Kleptocracy. However, we might suggest that next to UC, the California Legislature and the Hun Our Governor looks modest and responsible.

Don't worry. This is not serious. Just because it's happening doesn't make it real. Surreal, perhaps, but not real. Reality is something else, far, far from the world of Blum, Feinstein, Gump and Yoo.

Badlands Journal editorial board
-------------

4-19-08
The Guardian
Top Bush aides pushed for Guantánamo tortureSenior officials bypassed army chief to introduce interrogation methods...Richard Norton-Taylor
http://www.guardian.co.uk/world/2008/apr/19/guantanamo.usa

4-16-08
Modesto Bee
Even top students finding it hard to get into top colleges...MERRILL BALASSONE and DEB KOLLARS, THE SACRAMENTO BEE
http://www.modbee.com/local/story/270764.html

4-13-08
Inside Bay Area
Crowded UC makes room for athletes
Critics say star players given priority over low-income, high-GPA scholars...Matt Krupnick
http://www.insidebayarea.com/dailyreview/localnews/ci_8910885

4-11-08
Berkeley Dean Defends Law Professor...PAMELA HESS
http://ap.google.com/article/ALeqM5iakd9i9QHJn3MgPadkhBZT4X2-HAD8VVSPJO0

4-8-08
Democratic Underground
Conyers Schedules Hearing with John Yoo...Paul Kiel
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3128082

4-9-08
Merced Sun-Star
UC chancellor walks the halls in Washington...MICHAEL DOYLE, Sun-Star Washington Bureau
http://www.mercedsunstar.com/167/story/216568.html

4-10-08
Stanislaus Alliance wins grant for biotech education
Objective is to draw firms to region, train workers...CHRISTINA SALERNO
http://www.modbee.com/business/story/264945.html

4-13-08
Fresno Bee
Mean greens
Valley plants, trees may add to pollution by emitting tons of a key smog element....Mark Grossi
http://www.fresnobee.com/263/v-printerfriendly/story/522274.html

4-13-08
UC officials understated president's compensation
Numbers didn't include retirement deal...Daniel Borenstein
http://www.insidebayarea.com/dailyreview/localnews/ci_8910897

10/06
Bioone Online Journal
Pacific Science
Article: pp. 429–438 | Abstract | PDF (1.14M)
http://www.bioone.org/perlserv/?request=get-document&doi=10.2984%2F1534-6188(2006)60%5B42
9%3AIOFPBT%5D2.0.CO%3B2&ct=1

9/04
Lawrence Livermore National Laboratory
Coral reefs can easily be swamped in algae if there are too many nutrients in the water.
UCRL-MI-206535 Marshall Islands Program Briefing Document The effective and environmental
half-life of 137Cs at former U.S. nuclear test sites in the Marshall Islands T.F. Hamilton W.L. Robinson
http://64.233.167.104/search?q=cache:ckNa-Pp7CyMJ:https://eed.llnl.gov/mi/pdf/Hamilton_UC
RL-MI-206535.pdf+UC+bikini+atoll+nuclear&hl=en&ct=clnk&cd=4&gl=us

4-15-08
The Scotsman
After 45 years, life returns to Armageddon atoll
Giant corals as tall as trees tower under the surface, but on shore, coconuts are still too radioactive to eat ...JENNY HAWORTH
http://news.scotsman.com/scitech/After-45-years-life-returns.3984855.jp

Richard B. Gump South Pacific Research Station-Moorea, French Polynesia
http://moorea.berkeley.edu/aboutus/

4-13-08
Inside Bay Area
Amid state budget crunch, UC runs island 'paradise'
Tropical research site a bargain, defenders say...Steve Geissinger, MedianNews Sacramento Bureau
http://www.insidebayarea.com/trivalleyherald/localnews/ci_8910832

| »

Seyed the Improbable

Submitted: Apr 20, 2008

Whenever I sense a freshening breeze in the evening here in the San Joaquin Valley after a beige day of sunlight and smog, my heart leaps with anticipation and the next morning I can hardly wait to open my newspaper. Why? Because I know that Seyed the Improbable will be there to reassure me that air pollution in the Valley is largely imaginary and that growth can continue and that we will all grow more prosperous without damaging our environment.Last night, I could hardly sleep at all, anticipating what the Improbable One would have to say on Earth Day.

I was not disappointed to find that, along with the California Transportation Commission, Seyed the Improbable is reported by the Modesto Bee to support West Park. West Park is the latest scheme in a long line of them -- from United Technology's rocket plant to Filbin's Famous Tire Pile and Fire and the municipal tumor formerly known as Los Banos -- to "develop" the west side of the Valley. West Park is as "4,800-acre business and industrial park project southeast of Patterson has drawn support from regional transportation and air quality officials, and heated opposition from residents and government agencies in the towns near the massive development." (Modesto Bee, April 20, 2008). The transportation commission has pledged more than $20 million it does not have to build a short-haul railroad through a canyon in the Coast Range that is one of the last refuges for wildlife in the region. Since diesel locomotive exhaust will produce a
great deal more air pollution than flatulent San Joaquin kit foxes and rattlesnakes, given prevailing breezes, from a public health standpoint, the canyon is better left to add less rather than more to Valley air pollution. Adding a regional trucking hub to the west side, where the pollution is worse, is another bad idea.

Seyed the Improbable has announced air-board support for the project before the two-year environmental review process has even begun. In fact, the Stanislaus County supervisors must vote to begin that review process on Tuesday. Supervisor Jim DeMartini, who represents the district in which the project will be built, opposes it, saying, ""There is a lot of resentment for the project on the West Side ... There needs to be community buy-in for large projects like this..." Jim's getting some heat from opponents, including: "WS-PAC...a group of West Side residents formed to fight the project; the cities of Patterson and Newman, the Patterson Unified School District, West Stanislaus Fire District; Del Puerto Health Care District; the Crows Landing Community Service District; West Side Resource Conservation District; and the Stanislaus County Farm Bureau."

In addition to Seyed the Improbable and the transportation empty-pork-barrellers, the Californai Citrus Mutual and the California Cotton Ginners and Growers Association support the project. Among the majority of three supervisors announcing their support in advance of the hearing on Tuesday, is former state Sen. Dick Monteith, Halfback-Modesto, who, in the great contest in 1998 for the crown of "Mr. UC Merced," brayed louder than any that UC Merced was a "done deal," in full knowledge that it wasn't and that he was reelected to convince state Senate Republicans that it ought to be.

Yet it is Seyed the Improbable that, breezy day after breezy day, wins the crown in a crowded field for Valleywide Flak Stooge, forever peddling the latest "science" to build the railroad over our public health for the special interests that jerk his whistle chain.

Even on Earth Day, Seyed the Improbable casts the shadow of his doubt over the empirical evidence discovered daily by Valley residents that growth is the destroyer. Truck stops should sell his likeness for a hood ornament. He ought to be done in bronze on top of a manure pile, his nose tilted upward, a beatific smile on his face as if he were in a wholesale flower mart. Surely, McClatchy Co., our local media conglomerate, who enthusiastically reports every utterance of Seyed the Improbable as if it were God's Own
Truth, should begin planning how to honor him in retirement (oh, that happy, happy day!). Perhaps he should be done in brass on the roofs of local McClatchy outlets -- 20-30 feet tall, the logo reading: "Seyed the Improbable, Our Hero. The Enemy of Reason."

Seyed the Improbable, Colossal Apostle of the Inevitability of Growth Regardless of the Health and Safety Consequences, your bogus sophistries, backed staunchly by the best, most ephermeral "science" special interests can buy, have convinced us on breezy days like Earth Day 2008 that air pollution is just a figment of our over-anxious imaginations, stimulated by errant variables like the wheezing of the neighbor's kid. You
have helped us enormously to overcome our simple misconception that truth was our friend. Since UC Merced has arrived, we have all been carefully instructed that there is no truth beyond the desires of UC administrators and the developers who scored so very much so fast building in the state's newest "college town." Since you've been on the scene, we've learned there is no truth about air pollution beyond your playful improbabilities.

But, like all true comic heroes, Seyed the Improbable has his pathetic side, with which we can all identify. What would you do if you were directed by a board composed of an overwhelming majority of San Joaquin Valley county supervisors and city council members?

Why our elected officials do not help protect our health is not exactly a new science either. When Alexander the Great was conquering the Middle East and northern India, his teacher was writing about how the Spartan constitution corrupted its ephors and elders and sent citizens too poor to pay for communal dining in bonded servitude on a slow boat to Sicilian colonies. Today, yesterday, tomorrow -- it's all about money.

Hence, the war against human memory here, there and everywhere in the nation. One must forget the sweet fresh air the Valley once had and the normal view of both mountain ranges, as he must forget riverbank bonfires in Knights Ferry illuminating the sleek, black backs of salmon being pitchforked on their runs up the Stanislaus, on nights in the distant past long before we heard the first babble-byte from Seyed the Improbable, casting doubt on our memory of a world that included fresh, cold autumn nights and the
sights of salmon wriggling on pitchfork tines and of not-entirely-sober townsmen stabbing their own or their neighbors' feet, and laughing as they limped up the lawn to the bar to pour vodka on the wound.

Bill Hatch

| »

This year's speculative bubble

Submitted: Apr 21, 2008

This article raises two questions.
1. How much of the contest between Obama and Clinton is a contest between rival financial centers, Chicago and New York?
2. Given the large increases in grain plantings in Central California, will speculation in the grain markets affect the California farm economy this year?

Badlands Journal editorial board
----------------------
4-21-08
New Threat to Farmers: The Market Hedge...DIANA B. HENRIQUES
http://www.nytimes.com/2008/04/21/business/21cnd-commodity.html?ex=1209441600&en=9901ed93f256c117&ei=5070&emc=eta1
Fred Grieder has been farming for 30 years on 1,500 acres near Bloomington, in central Illinois. That has meant 30 years of long days plowing, planting, fertilizing, and hoping that nothing happens to damage his crop.
“It can be 12 hours or 20 hours, depending,” Mr. Grieder said.
But Mr. Grieder’s days on the farm in Carlock, Ill., are getting even longer. He now has to keep a closer eye on the derivatives markets in Chicago, trying to hedge his risks so that he knows how much he will be paid in the future for crops he is planting now. And the financial tools he uses to make such bets are getting more expensive and less reliable.
In what little free time he has, Mr. Grieder attends Illinois Farm Bureau meetings to join other frustrated farmers who are lobbying officials in Chicago and Washington to fix a system that was designed half a century ago to reduce uncertainty for food producers but is now increasing it.
Mr. Grieder, 49, is shy about complaining amid so much prosperity. Prices for his crops are soaring on the updraft of growing worldwide demand, and a weak dollar is making those crops more competitive in global markets.
But today’s crop prices are not just much higher, they also are much more volatile. For example, a widely used measure of volatility showed that traders in March expected wheat prices to swing up or down by more than 72 percent in the coming year, three times the average volatility for that month and the highest level since at least 1980. The price swing expected in March for soybeans was three times its monthly average, and the expected volatility in corn prices was twice its monthly average.
Those wild swings in expected prices are damaging the mechanisms — like futures contracts and options — that in the past have cushioned the jolts of farming, turning already-busy farmers into reluctant day-traders and part-time lobbyists.
One measure of the farming industry’s frustration is the overflow crowd expected at a public forum on Tuesday at the Commodity Futures Trading Commission in Washington. Interest is so high that the commission, for the first time ever, will provide a Webcast of the forum, which it says is being held to gather information about whether key markets for hedging the price of crops “are properly performing their risk management and price discovery roles.” The Webcast link is available on the commission’s Web site, www.cftc.gov.
The additional costs that stem from volatility in grain prices — higher crop insurance premiums, for example — are not just a problem for farmers. “Eventually, those costs are going to come out of the pockets of the American consumer,” said William P. Jackson, general manager of AGRIServices, a grain-elevator complex on the Missouri River.
Prices of broad commodity indexes have climbed as much as 40 percent in the last year and grain prices have gained even more — about 65 percent for corn, 91 percent for soybeans and more than 100 percent for some types of wheat. This price boom has attracted a torrent of new investment from Wall Street, estimated to be as much as $300 billion.
Whether new investors are causing the market’s problems or keeping them from getting worse is in dispute. But there is no question that the grain markets are now experiencing levels of volatility that are running well above the average levels over the last quarter-century.
Mr. Grieder’s crop insurance premiums rise with the volatility. So does the cost of trading in options, which is the financial tool he has used to hedge against falling prices. Some grain elevators are coping with the volatility and hedging problems by refusing to buy crops in advance, foreclosing the most common way farmers lock in prices.
“The system is really beginning to break down,” Mr. Grieder said. “When you see elevators start pulling their bids for your crop, that tells me we’ve got a real problem.”
Until recently, that system had worked well for generations. Since 1959, grain producers have been able to hedge the price of their wheat, corn and soybean crops on the Chicago Board of Trade through the use of futures contracts, which are agreements to buy or sell a specific amount of a commodity for a fixed price on some future date.
More recently, the exchange has offered another tool: options on those futures contracts, which allow option holders to carry out the futures trade, but do not require that they do so. Trading in options is not as effective a hedge, farmers say, but it does not require them to put up as much cash as required to trade futures.
These tools have long provided a way to lock in the price of a crop as it is planted, eliminating the risk that prices will drop before it is harvested. With these hedging tools, grain elevators could afford to buy crops from farmers in advance, sometimes a year or more before the harvest.
But that was yesterday. It simply is not working that way today.
Futures, for example, are less reliable. They work as a hedge only if they fall due at a price that roughly matches prices in the cash market, where the grain is actually sold. Increasingly — for disputed reasons — grain futures are expiring at prices well above the cash-market price.
When that happens, farmers or elevator owners wind up owing more on their futures hedge than the crops are worth in the cash market. Such anomalies create uncertainty about which price accurately reflects supply and demand — a critical issue, since the C.B.O.T. futures price is the benchmark for grain prices around the world.
“I can’t honestly sit here and tell you who is determining the price of grain,” said Christopher Hausman, a farmer in Pesotum, Ill. “I’ve lost confidence in the Chicago Board of Trade”...

| »

Tribute to Felix Smith, tenacious conscience

Submitted: Apr 25, 2008

Sacramento Bee
Lloyd G. Carter: A California water story of individual tenacity
http://www.sacbee.com/110/v-print/story/888598.html

You have to give 75-year-old Felix Smith of Carmichael credit for tenacity.

A quarter-century ago, Smith became the conscience of the U.S. Fish and Wildlife Service when he blew the whistle on the selenium poisoning of the Kesterson National Wildlife Refuge in western Merced County.

In the spring of 1983, Smith and another biologist discovered deformed bird embryos in nests at Kesterson, where 100-acre holding ponds were evaporating agricultural drainage water from the Westlands Water District. The drainage water contained selenium, a naturally occurring element in the soils of Westlands that was highly toxic to bird reproduction. Adult birds were dying by the thousands and some species had a complete reproductive failure.

James Watt, then U.S. secretary of interior, ordered news of the discovery suppressed while an official press release was prepared. Several months later, with the press release still supposedly being formulated, a frustrated Smith leaked the story to Deborah Blum, when she was a reporter for the Fresno Bee.
Within 18 months, the New York Times, the Washington Post and CBS' "60 Minutes" all gave major coverage to the unfolding debacle, pitting a politically powerful federal irrigation district against environmentalists and adjacent Kesterson landowners, who had seen their cattle die.

In February 1985, the State Water Resources Control Board, responding to a complaint from Kesterson neighbors Jim and Karen Claus, ordered Kesterson cleaned up or closed. The following month, the Interior Department, its options dwindled, ordered Kesterson closed, an action that left the Westlands Water District without drainage, a problem that exists to this day.

After 34 years as a federal scientist, Smith retired in 1990, but not into quiet obscurity. In 1995, Smith, as a private citizen, filed a complaint with the water board contending irrigation of high selenium soils in the western Valley was an unreasonable use of water under state law. Smith warned that even though the Kesterson ponds had closed, selenium-loaded drainage from federal irrigation districts north of Westlands was still being funneled untreated into the lower San Joaquin River. Studies had revealed that levels of selenium as low as 2 to 5 parts per billion in the drainage water could impact fish reproduction. That's equivalent to one drop in an Olympic-sized swimming pool.

However, the water board ignored Smith, claiming work was being done on the drainage problem by state and federal agencies. In 2000, the water board dismissed Smith's complaint without taking action. Smith knew that funding a private lawsuit to force the water board to act was simply far more than he could afford.
Smith could have given up and gone fishing with his grandchildren. But in January this year, with the Delta fishery facing catastrophic collapse, he refiled his complaint.

In a Jan. 10 letter to water board Chairwoman Tam Doduc, Smith wrote, "Many of the impacts documented in my past letters/complaints continue today. In addition, there are other more ominous concerns and environmental impacts coming to the forefront."

This is a reference to the current Delta fishery crisis and the collapse of the salmon runs.
Last month, the California Sportfishing Protection Alliance and the California Water Impact Network also filed a complaint with the water board again alleging unreasonable use of precious Delta water.
The sportfishing alliance and the water network, in an April 15 letter to Democratic Sen. Dianne Feinstein, also warned of the perils of irrigating soils loaded with selenium. Feinstein is attempting to broker a drainage "solution" with Westlands (and adjacent water districts) that would keep at least 300,000 acres of high-selenium soils in production.

Feinstein has drawn much criticism from California's environmental community for her closed-door, limited-access negotiations with Westlands growers, who claim they have a drainage solution (limited land retirement, recycling and sprinkler evaporation), a solution that environmental scientists say is highly problematic and almost certainly unworkable. Where the millions of tons of salts ultimately accumulated would go is still undetermined.

If Feinstein wants to learn something about drainage and selenium, she should sit down with Felix Smith. After a half-century in the water wars, he could give her an earful.

| »

Resource Conservation District Assistance Program watershed coordinator grant program

Submitted: Apr 29, 2008

Resource Conservation District Assistance Program watershed coordinator grant program
2007 Watershed Coordinator Grant Program Final Decision List

The Department of Conservation (Department) is pleased to announce its 2007 Watershed Coordinator Grant Program Final Decision.

Final Decision List (PDF) available at:
http://www.conservation.ca.gov/dlrp/RCD/Pages/Index.aspx

The Department’s decision is the result of an extremely competitive process and an impressive response from special districts, local governments, and non-profits throughout the state. The Department received 86 proposals requesting over $19 million in funding. The large number of proposals received reflects the great need for watershed coordination in the state. The $9 million allocated for this three-year grant program was sufficient to fund only half of the submitted proposals. The review committee recognized that there were many compelling and high-quality proposals that could not be recommended for due to funding constraints.

The Department encourages organizations which were not recommended for funding to continue watershed work through other means if possible. The management of water resources and the improvement of impaired watersheds is a high priority for the State, and watershed coordinators have shown great success in both areas.

| »


To manage site Login