" I heard it through the AgLine"

August 1, 2011

 

 

·        Africa has potential to feed the whole world

·        Ag products propel Bayer 2Q profits

·        Thai gov’t: You breed it, we keep it

·        USDA funds biofuel crops in six states

·        Chile pepper capital preserving its roots

 

 

Africa has potential to feed the whole world

 

(guardian.co.uk) – The president of the International Fund for Agricultural Development claims that, by focusing on farming, Africa has the potential to feed not only itself but the rest of the world.

 

Africa can feed not just itself but the world is a bold assertion to make at a time when famine stalks part of the continent.

 

But this is precisely the claim made by Kanayo Nwanze, the president of the International Fund for Agricultural Development (Ifad), a specialised agency of the UN. Nwanze gave a forceful intervention at Monday's emergency meeting in Rome to discuss the crisis in east Africa, where, according to the UN, an estimated 11.6 million people need humanitarian assistance in Somalia, Ethiopia, Kenya and Djibouti.

 

Nwanze drew a sharp contrast between Gansu province, in northwest China, and parts of Africa that cannot feed itself. He said like many parts of the world, Gansu suffers from frequent drought, limited water for irrigation and severe soil erosion. Yet despite the weather and the harsh environment, the farmers in the Gansu programme area are feeding themselves and increasing their incomes.

 

"I met one farmer whose income had risen from only $2 (£1.20) a day in 2006 to $35 a day last year," he exclaimed.

 

So when asked why this could be done in China but not Africa, Nwanze said the vital difference was government policy.

 

"What I saw in Gansu was the result of government policy to invest in rural areas and to reduce the gap between the rural and the urban and stem migration," he said in a telephone interview. "It has a very harsh environment, it has only 300 millimetres of rain annually, compared to parts of the Sahel which gets 400-600 millimetres, but the government has invested in roads and electricity. We found a community willing to transform their lives by harvesting rainwater, using biogas, terracing mountain slopes. There are crops for livestock, they are growing vegetables, wheat and maize, and generating income that allows them to build resilience."

 

While Somalia is a worst-case scenario, Nwanze continues, in Ethiopia and Djibouti there has been a lack of long-term investment that makes them vulnerable to climate change. "It is not enough to wait for crisis to turn to disaster to act. The rains will fail again, but governments have not invested in the ability of populations to resist drought."

 

Nwanze argues that Africa is facing the fallout of decades of neglecting agriculture, a fault that lies with African governments and aid donors.

 

"There was a shift in paradigm from agriculture to industrialisation," he said. "That's fine, but not to the extent where you neglect food and we are now facing the consequences. Even where farming is practised it's seen as a poor man's occupation. It is not seen as an attractive profession."

 

The figures back him up. In the mid-1990s, global official development assistance to agriculture reached $20bn before slumping to just $3bn in in the early 2000s. It is slowing rising again, reaching $9bn in 2009. In a recent report, ONE, the advocacy group, gave two reasons for the decline: complacency for the world's food supply after the dramatic improvement in food production in the 1960s and 1970s in Asia and Latin America, and the development doctrine that insisted developing countries dismantle state-owned and state-run enterprises, including agricultural research.

 

But, after decades of neglect, agriculture is fashionable again in development circles. Jolted by the surge in world food prices in 2009, the G8 group of rich countries and other donors committed to provide $22bn in funding for agriculture and food security. Those donors have some ground to make up to meet those pledges in the agreed three-year period, but agriculture is firmly on the international agenda. In June, G20 agriculture ministers agreed a plan of action in Paris that restated their commitments to the 2009 L'Aquila pledge and cited the importance of small farmers.

 

Nwanze, who welcomed the plan of action, sees small farmers as Africa's great hope. Agriculture, predominantly on a small scale, accounts for about 30% of sub-Saharan Africa's GDP and at least 40% of export value. In a number of small countries in Africa, agriculture plays an even greater role, representing 80% or more of export earnings.

 

The Ifad president says Africa could easily increase the use of fertilisers without making a dent on the environment, because current usage is so low. And he cites the potential to increase irrigation – only about 7% of land in the whole of Africa is irrigated, compared with more than 30% of land in Asia – and the scope for farmers to use improved seed varieties that would dramatically boost productivity.

 

If this seems pie in the sky, Nwanze cites a number of countries that are seeing success by focusing on agriculture – Tanzania, Rwanda and Ghana – whose governments, helped by the private sector, have made a big commitment to farming. "The potential is huge," said Nwanze. "With a little investment, Africa can feed itself and it has the potential to feed the world."

 

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Ag products propel Bayer 2Q profits

 

(Bloomberg) – Bayer AG’s second-quarter profit rose 41 percent as revenue growth at the company’s two chemical divisions offset declining sales of its top-selling multiple sclerosis and birth-control drugs.

 

Net income increased to 747 million euros ($1.07 billion) from 530 million euros a year earlier, the Leverkusen, Germany- based company said today in a statement. Core earnings per share, which exclude one-time items such as litigation costs, totaled 1.29 euros, matching the average estimate of 17 analysts surveyed by Bloomberg.

 

Bayer is relying on agricultural chemicals and plastic materials to drive growth, forecasting that sales gains at the prescription-pharmaceutical division won’t match expansion at rivals. Bayer’s goal to increase earnings at the plastics unit at a faster rate than sales this year has become “increasingly ambitious,” the company said today.

 

The plastic materials unit forecast is “the one weak point in this good set of numbers,” said Sebastian Frericks, a Frankfurt-based analyst for Bankhaus Metzler, in a telephone interview. Frericks recommends buying the shares. “Profit was respectable, marginally better than I expected.”

 

Bayer fell 1.18 euros, or 2.1 percent, to 56.35 euros at 9:30 a.m. in Frankfurt trading. Before today, the stock had returned 32 percent in the past year, including reinvested dividends, compared with a 21 percent return for the Bloomberg Europe Pharmaceutical Index.

 

Drug Sales

 

The Betaferon injection for treating multiple sclerosis, Bayer’s top-selling drug, is competing with Novartis AG’s new Gilenya pill, while the Yaz and Yasmin contraceptive pills lost patent protection in Europe this month. Betaferon sales dropped 9.6 percent in the quarter and the contraceptives declined 9 percent.

 

“We expect continued pressure on the two most important product franchises for pharma,” Daniel Wendorff, a Frankfurt- based analyst at Commerzbank AG with a “hold” recommendation on Bayer’s stock, said in a report to clients before the results were released.

 

Revenue rose 0.8 percent to 9.25 billion euros, missing the average estimate of 9.54 billion euros. Sales at Bayer’s HealthCare unit fell 2.3 percent to 4.2 billion euros. Revenue from the cancer drug Nexavar dropped 8.1 percent.

 

Stroke Treatment

 

Bayer is awaiting regulatory approval this year for Xarelto, a blood thinner, for use by patients with irregular heartbeats who face the risk of a stroke. Bayer estimates the medicine may generate more than 2 billion euros in annual sales once its wider use is approved.

 

Revenue at the MaterialScience plastic ingredient and resins unit rose 3.5 percent to 2.78 billion euros. Sales and Ebitda before items in the third quarter will likely be at their year-earlier level, Bayer said.

 

Sales at the CropScience pesticide and seed-treatment division increased 3.1 percent to 1.94 billion euros. The business “continues to trend positively,” and Ebitda before items may rise by more than 20 percent this year if the season progresses well in the second half, Bayer said.

 

Bayer reiterated an April 28 forecast that group revenue will rise within a range of 5 percent to 7 percent this year, while earnings before interest, taxes, depreciation and amortization and excluding special items will exceed 7.5 billion euros.

 

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Thai gov’t says, you breed it, we keep it

 

(The Nation) – Seven agricultural trade-related associations have criticised Agriculture Ministry regulations that will force companies, researchers and farmers to transfer ownership rights of new seeds to the government.

 

The details of the regulations, which will implement the 1999 Plant Variety Protection Act, are still being worked out.

 

The regulations, announced on January 21 this year, would mean that any newly developed plant seeds would be categorised as general seeds and would become a government asset.

 

The researcher or developer would not have the rights to own the new breed.

 

The rules would discourage research and development into plant seeds, the associations say.

 

The groups are the Thai Seed Trade Association (TSTA), the Horticultural Association Society of Thailand, the Plant Breeding and Crop Multiplication Association of Thailand, the Thai Orchid Exporters Association, the Royal Horticultural Society, the Thai Society of Sugar Cane Technologists and the Thai Agro Business Association.

 

TSTA president Pachoke Pongpanich said the government urgently needed to amend the 1999 Plant Variety Protection Act to reflect changes in the economic environment. Otherwise the law would reduce research and development and force investors to leave Thailand, as they would not have the rights to new seeds they developed, he said.

 

The Plant Variety Protection Act has never been enforced due to a lack of Agriculture Ministry regulations to support it.

 

The latest draft of the regulations has generated deep concern among traders, farmers, academics and researchers.

 

Under the regulations, any researchers or organisations that developed new plant seeds would have to allow the government to own the intellectual property rights and share any benefits. Violators would be subject to two years in prison and/or a Bt400, 000 fine.

 

 To promote new research and development as well as create new plant varieties in Thailand, Pachoke said the government should suspend the ministry's regulations and amend the Plant Variety Protection Act in accordance with the current trade situation.

 

He said that enterprises would not mind sharing profits with the government but that the intellectual property rights should belong to the developer. The seven associations will soon send a letter opposing the regulations to the incoming government and Cabinet.

 

They will also propose the government develop Thailand as a centre of seed development in the Asean region, promoting research and innovation in seeds and the agricultural industry.

 

According to the Department of Agriculture, Thai seed exports were worth Bt2.05 billion in the first five months of the year, with most exports being maize seeds. Seed exports are expected to grow 6.5-7.5 per cent in the remaining months of the year, pushing seed export value past Bt4 billion this year, from last year's Bt3.1 billion.

 

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USDA funds biofuel crops in six states

 

(Fox via Dow Jones) WASHINGTON – The U.S. Department of Agriculture announced plans to help fund the planting of crops in six states that will be used exclusively for biofuels such as cellulosic ethanol.

 

USDA Secretary Tom Vilsack said the $45 million the department will be dispersing to help pay for the crops marks the second time it is using its Biomass Crop Assistance Program, or BCAP, and it may be the last because of budget cuts being considered by Congress for fiscal year 2012.

 

The money in this second round of BCAP funding will be going to companies like Beaver Biodiesel LLC and AltAir Fuels LLC, which will be planting and harvesting 51,000 acres of the oilseed camelina in California, Montana, Washington and Oregon.

 

Camelina, Vilsack said, has proven to be a good crop for making jet fuel.

 

Abengoa Biofuels will also get money from the program to plant and grow 20,000 acres of switchgrass in Kansas and Oklahoma.

 

Switchgrass, like camelina, can be grown successfully on "marginally productive" land that isn't suitable for traditional crops like corn or soybeans.

 

All of the ethanol now produced on a commercial scale in the U.S. is corn-based ethanol, and critics say the fuel makes food production, especially meat, more expensive by diverting more than a third of all corn grown to the fuel.

 

The ethanol industry is now expected to consume 5.15 billion bushels of corn produced in the 2011-12 crop year, which begins Sept. 1.

 

The government's ethanol mandates, which began five years ago and triggered a rapid expansion of the ethanol industry, require gasoline retailers to use 12.6 billion gallons of corn-derived ethanol this year. The mandate grows to 15 billion gallons in 2015 for corn-derived ethanol.

 

Corn-based ethanol is expected to continue to exceed those levels because it remains cheaper than gasoline, but production of cellulose biofuel, made from switchgrass, wood chips or other feedstocks, has lagged.

 

Growth in cellulosic-based ethanol, considered a second-generation biofuel, hasn't been as swift as the government would like. Some is being produced in pilot programs, but there is no production on a commercial scale.

 

The Environmental Protection Agency on Monday lowered the requirement for cellulose-based biofuel next year to 3.45 million gallons to 12.9 million gallons, down from 500 million gallons.

 

The Department of Energy, though, is trying to help jumpstart the cellulosic ethanol industry by helping finance the first-ever commercial scale production plant in Emmetsburg, Iowa. Earlier this month Energy Secretary Steven Chu said the agency is offering a $105 million loan guarantee to help POET LLC, the largest U.S. ethanol company, build a plant that makes fuel from waste from corn farms--husks, leaves and corncobs--instead of the corn itself.

 

"The Obama administration is committed to providing financial opportunities to rural communities, farmers and ranchers to produce biomass, which will be converted to renewable fuels and increase America's energy independence," Vilsack said Tuesday. "The selection of these project areas is another step in the effort to assist the nation's advanced biofuel industry produce energy in commercial quantities from sustainable rural resources. This effort will create jobs [and] stimulate rural economies across the nation."

 

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Chile pepper capital preserving its roots

 

(NPR) – The heart of chile pepper country in southern New Mexico is the tiny village of Hatch, which bills itself the "Chile Capital of the World." A new state law aims to protect this food heritage by preventing foreign peppers from being labeled as New Mexico-grown.

 

At the heart of the "Chile Capital" is the Pepper Pot restaurant, which exclusively serves New Mexico-grown chiles. In the kitchen of the Pepper Pot, owner Melva Aguirre churns out hundreds of plates a day of chile rellenos.

 

"A lot of people use Spam. A lot of people don't eat meat, so they put cheese in them," she says. "When it's time for me to make it for the chile festival, I have to make up to 3,000 to use on the weekend."

 

Tens of thousands of hot-pepper fans converge on Hatch each fall for the annual chile pepper festival, all devotees of the smoky, rich flavor distinct to the New Mexico variety.

 

Aguirre grew up picking chiles, and her brother still works the harvest each year.

 

Chile farmers eat at her restaurant so often they unlock the doors and let themselves in for breakfast. Everything on her menu has chile.

 

What Makes The New Mexico Chiles Special?

 

Stephanie Walker is an "extension vegetable specialist" at the Chile Pepper Institute at New Mexico State University. She's like the Encyclopedia Brown of facts on hot peppers.

 

Walker's job is to study and grow chiles. She says New Mexico peppers get their special flavor from the state's environment: high altitude, long seasons of heat and sunlight, hot days and — yes — "chilly" nights.

 

But chiles are also a tough crop for farmers because they're sensitive to drought and parasites, and they have to be harvested by hand. That's one reason the number of acres devoted to New Mexico's heritage crop has dropped more than 70 percent over the last two decades. It's also why Walker is supporting the new state law.

 

"As with other crops in other parts of the country — we all know about the Vidalia onion, we know about other crops that really have their brand identity in place. New Mexico has that, but it's never been protected the way other crops and other parts of the country have," Walker says.

 

Competing With Foreign Peppers

 

Walker sees part of her job as protecting farmers such as Shane Franzoy.

 

Franzoy's been walking pepper fields ever since he was old enough to walk. His family has farmed in Hatch Valley for four generations. But these days, it's onions and alfalfa that are the moneymakers for the farm.

 

The price of red chiles has dropped to the point where he's only growing them for seed. The market for the green chile, which is just a fresh version of the dried red, is a little bit better. Shane says buyers are looking to cheaper chiles from China, India or just south of the border, in Mexico.

 

Franzoy says the extra expense for his chiles comes mainly from the cost of labor and the regulations necessary for growing the chile.

 

"We're paying $7.25 an hour, and we're competing with $7.25 per day in other countries or even less," he says.

 

Even though his chiles are more expensive, Franzoy can still rely on food processors like Gene Bacca at Bueno Foods.

 

Bacca is head of the New Mexico Chile Association. His family's company has been selling green chile salsa and roasts for decades. His morning oatmeal is the only part of the day that doesn't include a dose of chile sauce.

 

Since local chiles are not yet in season, the room where he processes green chile is empty. Bacca is one of many producers who have pledged to sell only New Mexico-grown peppers for his company's sauces and roasts.

 

"[If] you did it strictly based on economics, we would probably be sourcing it from China or India," he says, "but that is not what we feel. We feel like we want to provide a very high-quality product, and so we concentrate our efforts on New Mexico, so that is where we put all our effort into it."

 

State lawmakers decided not to go for a federal certification or trademark for the New Mexico chile pepper. It would have cost a lot more to enforce, but it would have allowed the state to sue in federal court when outside growers label their peppers as New Mexico-grown. It also put U.S. Customs on the lookout for foreign impostors. Products from Idaho potatoes to Florida oranges benefit from this system.

 

For now at least, anywhere else in the country, a leather shoe could be called a New Mexico chile.

 

Bacca would like for state agricultural officials to inspect and verify that his processing room isn't operating with chiles other than the ones he's promised out front.

 

"But I also think though that just getting it on the books really helps ... and really publicizing it helps," he says.

 

'What About Your Pride?'

 

Back at the Pepper Pot, Aguirre has a little sticker on her door from the "Keep New Mexico Green" chile campaign. She packs and freezes bushels of green chiles each season just so she can say truthfully that she serves up New Mexico-grown chiles year round.

 

Aguirre says using other chiles might be cheaper, "but what about your pride? What about being proud of what you do? If I buy chile from Mexico or another country, I'll be just like everybody else. It's just the pride of you owning something. This is mine."

 

She turns back to the kitchen to finish serving the lunch crowd. At the end of the day, Aguirre will be hustling home to make her husband dinner, which undoubtedly will include chile.

 

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