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Date: Mon, 01 May 2000 08:39:19 -0500
Subject: Iowa Agriculture - Vilsack on GE crops, Task Force Report
From: "Ericka " <[log in to unmask]>
To: "Rex B. - Sierra" <[log in to unmask]>
X-Priority: 3

THE STATE OF AGRICULTURE IN IOWA - please post
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On Thursday, April 13, 2000 Iowa Governor Tom Vilsack spoke on a local
call-in radio program. He said essentially this:

"I think... we (the Iowa State Government) should be doing all we can to
promote biotech in agriculture."

Governor Tom Vilsack
Capitol Building
Des Moines, Iowa 50309
(515) 281-5211

The following information is FYI regarding agriculture in Iowa. Currently
75% of Iowa is cropland. Iowa and Indiana are the only states in the U.S.
which are, in their entireties 'major growing areas' for corn. Illinois
follows, with most of the state a 'major growing area for corn'.
See: http://www.state.ia.us/governor/agenda/budget_in_brief/Image81.gif
Iowa is second behind California in U.S. grain export.
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EXCERPTS FROM:
http://www.state.ia.us/governor/agenda/budget_in_brief/AgReport.htm

Report of the Governor's Task Force on the Agricultural Situation
March 6, 2000

Co-Chairs:
Patty Judge, Secretary of Agriculture and Land Stewardship
Neil E. Harl, Charles F. Curtiss Distinguished Professor in Agriculture and
Professor of Economics, Iowa State University

Committee Membership:
Brother David Andrews, National Catholic Rural Life Conference
Joan Blundall, Seasons Center for Community Mental Health
Craig Cox, Soil & Water Conservation Society
John Crabtree, Center for Rural Affairs
Nancy Dittmer, Farmer
Emily Eide, Iowa Farm Bureau Federation
Jill Euken, ISU Extension, Farmer
Jim Frevert, Hertz Farm Management, Inc.
Brent Halling, Deputy Secretary of Agriculture
Robert Jolly, Iowa State University Economist
David Lubben, Practical Farmers of Iowa
G. Joe Lyon, Farmer
Leslie Miller, Iowa State Savings Bank
Steve Moline, Iowa Attorney General's Office
George Naylor, Iowa Citizens for Community Improvement, Farmer
Wayne Newton, BEIFS Co-op Sunrise Energy
Denise O'Brien, Women, Food & Agriculture, Farmer
Jeff Plagge, First National Bank
Steve Reno, Iowa Attorney General's Office
Jo Ellen Reynolds, Reynolds Feed Service
John Showalter, Hog Farmer
Craig Struve, CS-Asgrow Service
John Whitaker, Iowa Farmers Union
David Williams, Farmer
Wendell Williams, Farmer-to-Farmer Financial Analyst, Farmer
Wendy Wintersteen, Iowa State University Extension

Table of Contents
Page
I. Introduction 1
II. A Vision of Agriculture for Iowa 3
III. Assistance to Those Under Stress 4
IV. Price and Income Policy Recommendations 9
V. Structural Problems in Agriculture 18
VI. Environmental Conditions 29
VII. Utility Deregulation/Electric Restructuring 35
VIII. World Trade Issues 37
IX. Genetically Modified Organisms 39
X. Priority Recommendations 41
Appendix 43
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IX. Genetically Modified Organisms

The announcement in mid-April, 1999, that Archer-Daniels-Midland and A.E.
Staley & Co. would not buy genetically modified corn that wasn't cleared for
export to the European Union (EU) triggered concerns in the grain trade and
by producers. The announcement led immediately to concerns about seed
purchase decisions already made and to grain sales at or after harvest.
However, the problem has widened in recent months.

Scope of the Problem

Announcements over the past few weeks have confirmed an old adage in open,
market-oriented economies. The Consumer is King. Whatever the consumer wants
the consumer will get. The big concern<no one knows for sure what the King
wants. This is a ranking research need that needs to be addressed.

Impact on Producers

A major concern is what all of this means to producers.
The outcome of the GMO controversy is likely to be resolved based on three
economic relationships<

EUR The demand for GMO crops and non-GMO crops, which will be determined by
consumers as point-of-purchase decisions are made as a matter of consumer
choice.
EUR The supply of GMO and non-GMO crops which will be determined by
producers
as decisions are made on seed selection for 2000, 2001 and beyond.
EUR The costs for maintaining an identity-preserved, two-track marketing
system is expected to be significant and will be borne principally by
producers. The cost will loom especially large for relatively small
quantities of a crop.

Separate handling and storage of GMO varieties will be necessary except
where arrangements are made for selling to a buyer who isn't discriminating
between GMOs and non-GMOs. It may be increasingly difficult to locate such
non-discriminating purchasers if price discounting for GMO varieties becomes
widespread.

If producers are asked by the first purchaser to promise that the crop is
non-GMO, they should be very careful what they sign or even what oral
comments are made.

Winners and Losers

Without a doubt, low rates of consumer acceptance would be translated into
substantial economic costs for seed companies.

Technology nearly always benefits consumers. But in this case, many
consumers are giving transgenics the cold shoulder. The benefits from this
generation of GMOs aren't obvious. And if there's the slightest doubt<in
terms of food safety or the environmental impact<consumers and processors
tend toward caution. Benefits to consumers from later generation GMO
products are possible.

What about producers? This type of technology is mostly output increasing or
cost decreasing or both. That means early adopters benefit from a successful
introduction but all producers lose in the long run as the technology boosts
output with price and profitability dropping disproportionately, in the face
of inelastic demand for many products. That's the case even if the effect is
cost-decreasing. Cost decreasing technologies have a built-in profit
incentive to boost output at the margin. And that ultimately means lower
prices and profits.

Finally, what's the likely impact on structure of the agricultural sector?
Disappointing acceptance rates by consumers will slow the trend toward
vertical integration of the crop sector<and could derail much of the
momentum.

Recommendations

The Task Force makes the following recommendations regarding the
implementation of the GMO technology<

1. The Task Force urges that adequate funding and encouragement be provided
for long-term research by independent institutions and agencies to assess
definitively consumer and scientific concerns about food safety and the
environment.

2. The Task Force recommends that the Congress review the three-way division
of oversight (Food and Drug Administration, Environmental Protection Agency
and the U.S. Department of Agriculture) to ascertain whether the present
division of responsibility is continuing to serve the public interest.

3. The Task Force urges the U.S. Government to work with all interested
countries in moving toward uniform standards and tolerances, worldwide, for
genetically modified commodities and products.

4. As noted in Part V, the Task Force is concerned about anti-competitive
practices stemming from plant patenting and urges that all interested
parties (producers, consumers, researchers and private sector firms
depending upon intellectual property rights as a basis for investment in
research and development) work toward patent reform which would be in the
public interest.

5. The Task Force urges a careful review of trade practices involving
"bundling" of inputs (tying inputs over which the vendor does not have
monopoly control to those inputs over which the vendor does have monopoly
power<such as seed varieties) to assure that monopoly power is not extended
to other products. The Task Force notes that tying contracts have been
unlawful under federal antitrust law for nearly a century except where the
vendor can demonstrate that the monopoly item will not perform as well with
other vendor's inputs.

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EXCERPTED FROM:
http://www.state.ia.us/governor/agenda/budget_in_brief/AgReport.htm

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