--- begin forwarded text 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 -------------------------------- 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. ---------- 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 ---------- < > ---------- 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. ---------- EXCERPTED FROM: http://www.state.ia.us/governor/agenda/budget_in_brief/AgReport.htm --- end forwarded text -- ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Rex L. Bavousett Photographer University of Iowa Our old name: University Relations - Publications Our new name: University Communications & Outreach - Publications 100 OPL, Iowa City, IA 52242 http://www.uiowa.edu/~urpubs/ mailto:[log in to unmask] voice: 319 384-0053 fax: 319 384-0055 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - To get off the IOWA-TOPICS list, send any message to: [log in to unmask]