Innocenti

The impact of global warming as well as the shift from food cereals to biofuels is starting to be felt in Lebanon: bread makers have threatened to raise the price of bread, so the government stepped in to subsidize wheat prices by selling 50,000 tons at the price of $225 per ton as opposed to $300 price in Beirut. Wheat import in Lebanon is monopolized by a cartel of 12 mills, owned by 10 people. The head of the breadmakers union accuses the government of committing a crime by subsidizing the cartel. The head of the consumers association calls the cartel a group of vampires and blames the minister of Economy and Trade Sami Haddad (him again) for subsidizing it. The cartel: we are falsely accused.

Honni soit qui Mali pense

"The reason? Mali has refused to privatize its cotton industry, which is integral to the country’s social and economic well-being. $72 million worth of aid is being withheld from the country (in which 90% of people live in poverty) for this reason. In 2004, the Bank withheld $50 million because of the Malian government’s refusal to end price support systems for cotton farmers, designed to mitigate the impacts of price decline fueled in no small part by rich country subsidies of their own industries (see below). When Bamako finally caved in and agreed to expose its poor farmers to the unjust international system, prices immediately dropped by 20% and poverty increased by 4.6%.(15)"

Extensive, well researched article.

War on terroirism

"Earlier this month a group of radical wine producers calling itself CRAV released an al-Qaeda-style video in which seven balaclava-wearing men threatened violence unless the French government put up the price of wine.
How seriously to take their threat that “blood will flow” is uncertain, but it would be unwise to dismiss it. Already there have been reports of attacks with small explosive devices against supermarkets selling foreign plonk in the Languedoc region, believed to be home to the shadowy CRAV, the Union for Viticultural Action. Shots have been fired at a lorry bringing wine from abroad. The last time the wine industry revolted, exactly 100 years ago, the army fired at the demonstrators, killing six."

Excellent Economist article on the future of the French wine industry under Sarkozy. I don't subscribe to the ideology, but a good article nevertheless.

Say farewell to Lebanese halloum

"The (Cypriot) Agriculture Ministry said yesterday they were progressing as scheduled with their application to the European Union to register halloumi cheese under the Protected Designation of Origin scheme.

Once received by the EU, a further six-month period must elapse, when other countries have the right to appeal.

A major issue in registering halloumi under the PDO term has been an ongoing row over what percentage of each type of milk (cow, sheep and goat) should be used in the product. Since countries like Turkey, Greece, Bulgaria and Denmark are now producing cheese with the indication ‘halloumi’, this has for a long time been a pressing issue for the industry.

The EU last week decided to cut subsidies on the export of dairy products to non-EU countries.

The EU Committee on Dairy Products decided to adopt the proposal in order to combat the lack of milk production.When subsidies were in place, the government would receive 22.57 euros for every 100 kilos exported to non-EU countries.

The decision has come with halloumi exports on the rise in the Middle East, especially in Lebanon, Saudi Arabia, Kuwait and the UAE.

It’s also been said that Turkish Cypriot and Turkish halloumia are becoming increasingly popular in the market, as they are being subsidised by the Turkish government, meaning they are retailing for lower prices.

PROTECTED Designation of Origin covers the term used to describe foodstuffs which are produced, processed and prepared in a given geographical area using recognised know-how.

It is designed to protect the names of regional foods and ensures that only products genuinely originating in that region are allowed in commerce as such. Its purpose is to protect the reputation of regional foods and eliminate the unfair competition and misleading of consumers by non-genuine products, which may be of inferior quality or of different flavour.

Products include the names of wines, cheeses, hams, sausages, olives, beers, and even regional breads, fruits, and vegetables.So, how do producers and processors go about registering a product name? A group of producers must define the product according to precise specifications.

The application, including the specifications, must be sent to the relevant national authority, where it will be studied first and thereafter transmitted to the European Commission. Here the application will undergo a number of control procedures. If it meets the requirements, a first publication in the Official Journal of the European Communities will inform those in the Union who are interested. If there are no objections, the European Commission publishes the protected product name in the Journal."

A small note: If Cyprus obtains the PDO for Halloumi, then the Lebanese dairy manufacturers will still be able to make Halloum, but not to call it Halloum. The same thing happenned with Greece and Feta. Feta-type cheese is still made in Denmark and elsewhere, but it cannot be sold as Feta anymore. Meanwhile in Lebanon, the PDO project funded by the Swiss government (and in which I am a consultant) is trying to survive in spite of the political deadlock, and the PDO law is still waiting to be passed.

Grain of wisdom

Wheat production (in spite of the subsidies) continues to shrink in lebanon. This year's area planted in wheat is 13,000 hectares, 2000 ha less than last year. The cost of producing one ton is around $110. The Lebanese government buys it for $250, and sells it to the industrial mills for $200. So the subsidy is $50 per ton. The total production this year is expected to be 70,000 tons. If I'm doing my math correctly, the government subsidy will be in the order of $3.5 millions. The government thinks that by cutting subsidies and saving $3.5 million per year it is going to plug the $40 billions in debt it has created. Could the wish to stop subsidies be due to the Free Trade Agreements about to be signed with the US? At a time when grain reserves are at their lowest in the world? At the time when the price of wheat is expected to suddenly start climbing because of the biofuel craze? At the time when the US grain mountains have become pimples and free grain donations may evaporate soon?

Arabic article in al akhbar

No milk? we'll have yogurt instead

""Panic buying" appears to have broken out in the global dairy trade as supply constraints ratchet prices up into uncharted territory, according to agricultural forecaster Agrifax.

News of the surge follows the European Union's decision last week to scrap its dairy export subsidies in a move expected to cut dwindling European dairy production further.

The drought in Australia, increasing use of land to grow corn for biofuels in the US, and Westernised diets in rapidly developing regions such as Asia and the Middle East are driving a surge in dairy prices, and supply can't keep up with demand."

The children of Aytaroun

I went to Aytaroun a few days ago to check the possibility of expanding the work of Land and People there. Aytaroun is a small village right by the border, near Maroun el Ras and Bint Jbeil. Since the early 70’s, Aytaroun has been an active war zone. While the rest of Lebanon was still enjoying the oil boom of the 60’s, it was regularly bombed by the Israeli army which made frequent incursions in the region. Aytaroun was immortalized in 1975 through a song by communist singer Khaled el Haber that went:

“Your children Aytaroun dance in the trenches
Their toys are guns
Your children Aytaroun chant in jubilation
They sing an ancient melody:
lets resist! lets resist!”

The song was written as a eulogy for of a group of school children who had died as a result of an Israeli bombing episode.

Aytaroun went from war to war and through various periods of occupation until the liberation of the South in 2000. The Israeli war on Lebanon of July-August 2006 resulted in the near total razing of the village, although the Israelis were unable to occupy it.

As elsewhere in the South, especially in the area south of the Litani, farming is a major source of income in Aytaroun. Tobacco forms the bulk of the local produce: 80% of the farmers rely on it as a main source of income. Tobacco is important for 2 reasons:

1. It is a dryland crop. There is no irrigation water available in Aytaroun. The land is very fertile, but groundwater is at 600m depth, and irrigation would be uneconomical considering the price of fuel needed to pump water from this depth.

2. It is “subsidized”: the Lebanese government subsidizes the Regie Libanaise des Tabacs et des Tombacs, a semi-autonomous body largely under government control, which in turn purchases the tobacco from farmers at prices higher than international market price. The amount a farmer can sell is fixed, and depends on a special permit delivered by the Regie. The average annual gross income for a tobacco farmer is LBP 4.5 million or $3,000. Nearly half of the tobacco farmers of Lebanon are in the South. This is why tobacco has been called “the crop of steadfastness” (mahsoul al soumoud). Without tobacco farming, migration from the south would have intensified, and its villages would have become depopulated.

My visit to Aytaroun came in response to a local request for help in finding alternative crops to tobacco. I have been receiving similar requests since the end of the 2006 war, from villages in the Deep South. The southern farmers are worried that the Sanioura government might stop the tobacco subsidies, and not replace them with other subsidies. Since the Hariri times, Sanioura and his ultra-neo-liberal team has been pushing for the lifting of the tobacco subsidies, calling it a drain on the national economy. These are surprising requests at a time when one would assume that the government has other cats to flog. Still, there is genuine concern in the South that the tobacco subsidies may be lifted, and that the livelihoods of the local people would suddenly take a dip.

I went around the place and visited the main farming areas of the village. Right by the border with occupied Palestine, there is a large plain of several thousand hectares nearly all planted with tobacco or wheat in rotation. Its altitude (700 meters) makes perfect for many fruit trees. The barbed fence passes right through the plain, and about one third of it is under Israeli occupation.

To say that the Israeli occupied part looks like it could be in another country is an overused cliché. The hilly parts are forested, and there are vast fruit tree orchards. There is a large packing plant, belonging, I guess, to moshav Avivim which is right across the border and is home to a couple of hundred settlers. The roads are asphalted and the fields drawn with a ruler. Clearly, some serious farming is taking place there.

Since the creation of the first settlements in Palestine, farming has been a major angle of attack of the Zionists. They thought that working the land, vivifying it, investing in it and fostering attachment to it will create a “de facto” situation which will make the Zionist state come true. Over the years, they invested tremendous sums in the various kibbutz and moshav making Israeli agriculture one of the least economically efficient in the world today. It swallows large amounts of money from the state’s coffers to the dismay of many Israeli economists. But it has been, and remains, a political success. The kibbutz and the moshav produce the bulk of the radical forces in Israel. They have been used extensively to attract western youth and create sympathy towards Israel. The technology used in the settlements (regardless of the financial bill) has helped the Zionist state carve a niche in the field of agricultural development. Special trade agreements granted by most nations of the world to the State of Israel facilitate the export of (subsidized) Israeli goods. They provide an opportunity for advertisement deep into families and households. Israeli produce is a tremendous propaganda tool, and a very successful one.

In spite of frequent calls to end the subsidies by some economists, Israeli politicians continue unabatedly to support the agricultural settlements. Moshav Avivim, located a few kilometers away from the destroyed Aytaroun village and from its poor tobacco fields, stands witness to that.

In Aytaroun, there are stones and dry soil. In Avivim, Israel has invested in deep wells and in irrigation systems. In Aytaroun, the price of fuel is prohibitive and electricity strictly rationed. In Avivim special rates are offered to the settlers, making irrigation a low-cost operation. In Aytaroun, the lack of storage facilities limits investment in farming. In Avivim, Israel has built packing plants of international standards. In Aytaroun, the absence of decent roads means the produce will be pulped before it gets to the market. In Avivim, the roads are of smooth asphalt, and airplanes carry produce directly to international markets.

In spite of all that, the moshavim were quick to desert their lands when Israel attacked Lebanon in July 2006. Many of the inhabitants of Aytaroun remained steadfast, fought the Israeli army, and defended their land till the last minute. Could this be why thy are facing the threat of losing their pitiful tobacco subsidy?

Cotton club

"Agricultural economists at the University of California, Davis, who conducted the study for Oxfam, found that a typical farm family of 10 in Chad, Benin, Burkina Faso or Mali — Africa's major cotton producers — that now earns $2,000 a year would have an extra $46 to $114 a year to spend if American subsidies were removed.

Oxfam, which has long campaigned for reductions in rich country agricultural subsides as a means to fight rural poverty in the developing world, said the added income would help families feed and educate millions of children. It maintained that Congress, now debating the farm bill that will set the rules for farm subsidies for the next five years, should cut cotton subsidies.

Dani Rodrik, an economist at Harvard who is skeptical of the importance of reduced agricultural subsidies, said he found Oxfam's new estimates credible, but said the gains forecast were relatively small. He said advocacy groups should be careful not to oversell them. Helping Africa's rural poor escape poverty will require a different set of economic strategies, he said. There is a need to foster a shift to the cultivation of higher-value crops and to develop industries, like garments and toys, that bring jobs."

Yasmine who sent me this article has asked me to remind you that you can post comments directly on the IHT site. Thanks Yasmine!

Subsidizing the rich

Lebanon subsidizes wheat farming, did you know that? On the face of it it is a good thing: apparently 12,000 ha are planted by 1200 farmer (assuming the figures are correct). The government buys the wheat at prices higher than market prices. And it doesn't cost much: $ 4 million per year. Problem is, many rich land owners take advantage of this and grow huge areas in order to cash the subsidy. Look at the figures: 12,000 divided among 1,200 farmers makes 10 ha per farmer. This is way above the mean land area held by Lebanese farmers (closer to 2 ha). In my village, no one sells the wheat back to the government. people use it to make burghul and freek, because the high yielding varieties are not good for that.