Posts Tagged ‘CAP’

AdFarmer Abroad: International Ag Trip Days #9 and #10

By Mandy Heth, July 16, 2010

The ninth day of our trip involved farm tours in Belgium, near Antwerp and Brussels. We were escorted by a former president of the farmer’s union to a large diversified farm first.   This farmer had a dairy, raised hogs and grew potatoes as his main forms of income. In addition, they also raised corn, wheat, sugar beets and other row crops.

The unique factor to this farm was how close it was to town. Belgium is a quarter of the size of Missouri, but is home to 10 million people. To stay viable they have to take their town neighbors into consideration and do management practices on the farm to reduce odor and noise. For instance they have exhaust fans in the barns that turn slower to reduce noise.

 From that farm we went to Aveve, a feed mill that the first farmer sold crops to and purchased feed from. This mill is owned by the farmer’s union and produces custom meals for each of their customers.  They create feed for poultry, swine and ruminants. In Belgium farmers must have a prescription from a vet to mix medication into feed and Aveve is capable of making these specialty feeds as well.

A feed truck is filled at the Aveve feed mill in Belgium

A feed truck is filled at the Aveve feed mill in Belgium

After touring the plant and a lunch at Aveve we headed to another farm, this one all crops and orchards. The farm is owned by two brothers who in the past five years have drastically changed their operation to be able to continue to grow. They planted orchards of both pears and apples in 2005 because fruit trees are taxed for the first seven years of production. All of the production is by hand and very labor intensive. Most of the fruit is sent to Holland to be sold at grocery stores and distributed by Holland merchants.

Pears ripening a the second farm

Pears ripening a the second farm

In addition to the fruit, the brothers also built a potato barn and they grow potatoes for chips. These potatoes are different varieties than the baking potatoes grown on the first farm. They have a contract with the chip company that allows them to have a price not set by the government. The contract also sets up a competitive program. Each farmer is promised the contract price, then if they have a good crop that can store longer, they’ll get additional premiums that increase each month past Februrary. For example if they have a bad year and the potatoes are heavily bruised the chip company will use those first because they won’t last in storage as long. In that case the farmer only gets what they contracted for. On the other hand, if they have a great year and the chip company comes to them in April, the farmer gets a higher price. If they come to the farmer in May they get an even higher price and this will continue into June, at that point the price premium will increase every two weeks until the crop is gone.

Wheatfield near Antwerp, Belgium

Wheatfield near Antwerp, Belgium

These brothers show how farmers can remain inventive and business- minded, even in a system that doesn’t seem to support innovation and capitalism.

Our final day of sessions will be tomorrow when we set off for London to visit with the U.S. Embassy.

Day #10:  My final post!

International Ag Trip Final Day- London

The final day of sessions involved a morning train ride from Brussels to London and a metro ride into London to our hotel off of Hyde Park. After briefly dropping off our things we set off through the park to the U.S. Embassy to meet with members of USDA’s Foreign Agriculture Service (FAS) and two other speakers.

Steve Knight with FAS gave us an overview of the history of the embassy in England, our longest standing and one of the more prominent embassy roles. Five presidents and 10 secretaries of state have held this role.

 From there we heard from Professor Allan Buckwell, the Policy Director of the Country Land & Business Association. The group is a member organization 38,000 strong that lobbies and works for land owners to secure property rights and to protect the interests of land owners. He brought up a point that I think most of us in the group thought of as very odd and that is the concept of “cultural landscapes.”

Because citizens in the EU pay taxes for the CAP program they feel entitled to participate in farm or rural life. In the UK there are few, if any national parks or green recreation places, so farmers make trails through their land and people will go on holiday to the countryside and use these walks. According to Buckwell, many farms are worth more in terms of the tourism economic value they bring than in the actual production of food. To the people in the UK farms are seen as a public good or service. The implications this has on bio-security measures was shocking to our group, especially after the issues they had with hoof and mouth disease in the not so distant past.

Our second speaker was Dr. John Alliston with the Royal Agriculture College. Dr. Alliston works with farmers to enroll them in Continual Professional Development (CPD) classes. These are certification courses on things like fertilizer application as well as courses on public speaking and working with the public.

In addition to CPD courses the college has an ag leadership program too. Their program only has 12 members and while being a two year program, it only meets for three one-week sessions.

It’s been quite the trip and we’ve seen a lot of diverse agriculture and spoken to a variety of farmers and ag industry members. In addition we’ve absorbed a lot of culture and seen some truly beautiful sights. Thank you to all of our supporters, from the board, alumni and donors to our companies and loved ones who allowed us this opportunity. We’ll be home soon, but I believe all of us will be coming back a little better and a little wiser from our experience.

AdFarmer Abroad: International Ag Trip Day #8

By Mandy Heth, July 15, 2010

Our eighth day abroad found us in Brussels with a free morning. I spent my time at the Belgian Centre for Comic Strip Art, where I learned that one of my favorite childhood cartoons, the Smurfs, was actually a Belgian creation that we Americanized.

Our afternoon of meetings at the European Commission began with a great presentation by John McClintock learning about the Common Agriculture Policy (CAP). Before starting his presentation he brought out a red bag and explained that the reason CAP existed was in that bag. From within the bag he pulled the plastic skeleton of Farmer Pete and told us the “Parable of Plenty”. Which goes “Here lies the skeleton of Farmer Pete, who starved to death from growing too much wheat”.

The line tells the story of why the CAP was created, and why they had changed the policy to its modern form. After the second World War, Europeans were determined to never go hungry again. In areas like Denmark, over 20,000 people starved to death after the war. In addition to these issues, farmers were having a hard time making ends meet, if they had a good year the price of their crops would drop and they’d have to sell all their crops to pay bills and have no food for themselves. On the flip side, if they had a bad year, they could charge higher prices and the consumers would be upset. To solve this issue the EU decided to regulate prices, which they’ve done since the 1960s.

At first this system worked really well and everyone prospered. The 70’s were the “Golden Age” of the policy and from there things went down-hill. Farmers became too productive and they started to have surplus and no market for the extra product. So in the 80s they assigned quotas to each farmer, which again righted the situation for awhile, but now they’re facing the opposite problem, with the current quota system they can’t make enough to be self sustainable. The EU is now one of the largest net importers in the world. Without some type of reform they won’t be able to keep up with their own needs.

Our second speaker was Jean-Marc Trarieux, the Deputy Head of the EU’s WTO Unit. This group works directly on trade issues and negotiations with the World Trade Organization. He discussed how the WTO works and the Doha Round of trade agreements that have been in the works since 2001.

The WTO was founded in 1995 and has 153 members accounting for 97 percent of world trade.  The only large country not represented is Russia. The EU has been working on the Doha Round of policy to gain more market access for its member states. The progress of the Doha Round has been slow, but a framework was approved in 2004 and a draft is ready for review now. One of the main holdups is actually the U.S. change in administration.

The third speaker of the day was Pekka Pesonen the Secretary General of COPA, a European Farmers Organization. COPA serves as a lobbying group for their 50 members and represents both the farmers and the co-ops. The group lobbies on issues such as CAP, international trade, geographical indicators and labeling to best represent farmers.

The three biggest issues right now for COPA are budget cuts in the CAP, a liberalized market and added requirements for farmers without compensation. These problems are leading to a decline in farmers, though not as severe as the decline that exists in the U.S. The EU still has 14 million farmers compared to the roughly 500,000 in the states.

A hot topic of conversation was the recent announcement that the EU may allow member states to choose individually if they want to allow the planting of biotech crops. COPA is for biotech, but not for individual member states deciding because each one could have very different policies and it would distort trade and possibly ruin the entire CAP system.

Our final full day in Brussels is tomorrow, where we’ll have the chance to discuss these issues with farmers on their operations.