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Agriculture Archive
November 1, 2002
EU proposes policy changes
The Commission of the European Union (EU) is proposing bold changes
to its Common Agricultural Policy (CAP). The core proposal is a single annual
whole-farm payment, not requiring production by farmers, in contrast to the
current payments that are linked to production of specific commodities. Based
on historical direct payments, this single payment would reduce the link between
farm subsidies and production. Farmers would have greater flexibility in choosing
what to produce. Also, the proposals would cut support for large farms for
the first time. Greater emphasis would be placed on rural development, food
safety, animal welfare, and environmental regulations. Nonetheless, for many
commodities, traditional CAP price support and stabilization mechanisms would
be maintained.
These proposals are contained in the Commission's Mid-Term
Review (MTR) of "Agenda 2000," a 6-year (2000-06) budget and
agricultural policy reform package. The MTR proposals are not yet formal
legislative proposals, and many details are not specified, making assessment
of impacts difficult. The Commission intends to produce a detailed legislative
proposal by the end of the year.
Source: ERS/USDA: Agricultural Outlook, October
2002
CPI forecasts rise in food prices
The U.S. Consumer Price Index (CPI) for all food is forecast to increase 2.1 percent in 2002 and 2 to 2.5 percent in 2003, compared with a 3.1 percent increase in 2001. With 8 months of CPI data already collected in 2002, the annual average food CPI is 2.3 percent above the first 8 months of 2001. The inflation rate for the all-items CPI, which was 2.8 percent in 2001, is forecast to be 1.6 percent in 2002 and 2 percent in 2003.
Source: ERS/USDA: Agricultural Outlook, October 2002
Dairyman gets stray voltage damages
Iowa's State Supreme Court set a precedent in October by awarding a dairy farmer nearly three quarters of a million dollars for stray voltage damages.
Daniel Martins of Monona farms is a quarter of a mile from an Interstate Power substation. His 15 years of complaints ranged from his own electric shocks in metal buildings to the strange behavior and loss of production in his cows. Martins' veterinarian testified the cows improved enormously when moved to an outlying farm.
The 5-2 decision should set a precedent for farmers all over
the U.S. Most of the decades-long complaints have come from dairy farmers,
and in Wisconsin, Chris Hardie of the LaCrosse Tribune received a Pulitzer
nomination in 2000 for his stories exposing the dangers of stray electric
power.
Source: ProFarmer Connection: October 17, 2002; Vol.
1, No. 6
Management suffers due to off-farm activities
As off-farm income takes on greater importance in the portfolio of farm household activities, less time is available for farm management. Management, the key to "smart" farming, is time-intensive. But management does not typically figure in analysts' calculations of economic returns to alternative production technologies or farming systems. The results could be misleading in understanding the benefits of technology adoption, particularly if farm households, like most of their nonfarm counterparts, are willing to forego some financial return from farming to gain convenience.
ERS/USDA, Agricultural Outlook, September 2002
