You’ve probably heard a lot about how global warming is going to cost you a lot of money –higher taxes to pay for mitigation efforts, higher prices for energy like gas or heating oil, and so on. However, if you’re farming, global warming (or at least, the fight against it) might end up putting some money into your pocket. You may have heard of “carbon credits” – a mechanism for people or companies who want to reduce their environmental impact by paying others to do eco-friendly things. Many farmers nationwide are in a favorable position to take part in the carbon credit marketplace – providing carbon and methane sequestration and in return getting paid real money.

This particular program is run by the National Farmers Union, and over the last couple of years has paid out more than $8 million to participating farmers and ranchers. They offer programs for farmers who engage in no-till agriculture, who plant hay or alfalfa, who follow a list of environmental best practices for ranchland management, who put part of their land into a forest preserve, and who collect and “flame off” (burn) methane. The amount of the credits vary widely depending on the practice, the amount of land involved, and so on, but it basically amounts to getting paid for following environmentally sensible practices. No one farm is going to qualify for everything – obviously, you can’t have a hay field and a forest on the same acre – but a little planning can really pay off.

The program has open enrollment, but enrollment periods are periodically closed off to permit a group of enrollees to be checked out and verified. Most of the current program enrollment deadlines aren’t until next year, but the current no-till/grassland period closes on August 15, 2008.

Credit: Custom Illustration by IDEAVIZ

Gilroy, California, just celebrated the thirtieth annual Gilroy Garlic Festival. In 1978, when the festival first brought food journalists, farmers, and chefs together, the purpose of the festival was to convince a skeptical American population that garlic was a delicious part of a healthy diet. At the time, Gilroy was the world’s leading garlic producer.

Thirty years later, garlic doesn’t need to be “sold” to a dubious world; the aromatic bulb has become one of the most popular vegetables around. Things haven’t fared so well for Gilroy – although the town holds on to its crown as “Garlic Capital of the World”, that’s the result of the huge garlic processing operations that have taken root. There are only three garlic farms left in Gilroy.

The reason is extremely low-cost imported garlic from China. China now produces 75 percent of the world’s garlic, exporting more than 138 million pounds annually. American growers say that the Chinese are able to undercut them severely because of the greatly lower cost of production in China. A box of garlic that costs $25 to produce in the United States can be produced for $6 in China. Aficionados say that there’s no competition when it comes to taste; the US-grown produce is of distinctively higher quality. However, with most garlic being used in processed foods rather than as a stand-alone dish, the quality differential hasn’t been enough to keep US growers competitive, and more and more of them have simply shut down or switched to other crops.

The US imposed a 377% tariff on Chinese garlic imports in 1994, and for a few years the tariff worked to limit imports of Chinese garlic to the US. However, in the intervening years, Chinese growers and shippers have found ways around the tariff, which was limited in its scope to a specific list of growers and exporters. Other exporters have entered the business, and even the old group which was subject to the tariff have found ways to route their garlic through third countries, evading the tariff and underselling the US producers significantly.

Gilroy will continue to host its wildly popular Garlic Festival each year, and thousands of attendees will enjoy the delicious roast garlic and learn about the many uses of this versatile and health-boosting plant. Unless something changes, however, the garlic those festival-goers enjoy back at home is unlikely to have been grown in the United States.  Perhaps the new Country of Origin Labeling (COOL) will help steer more Americans to buy US garlic.

Credit: Original Illustration by IDEAVIZ, Title Quote by William Shatner

Last week I talked about the water problem and how water is unique among economically productive commodities. Most commodities are substitutable – that is, you can use something else in place of the commodity, if you really need to. Few commodities have perfect substitutes; corn is not exactly the same thing as wheat, barley is not a perfect substitute for rye. But if the wheat crop fails, we don’t all starve; we substitute other grain products for wheat and get by. Water, of course, is different. There are some marginal uses for water where you can find substitutes; cars don’t have to use water in their radiators, they could use other fluids. But for most of the things we use water for – drinking and irrigation – it’s water, or nothing.

The other unique property that water has is that it doesn’t get used up. When you burn a barrel of oil, it’s converted into carbon dioxide and other gases and residues – but those residues never coalesce back into oil. Short of rocketing it into space, nothing that we do with water destroys the water itself. If you pour a gallon of water onto your field, it’s absorbed by the soil, taken up by the plants, used to build new plant mass, and moved around – but the water is never destroyed. It ends up coming back to the system in one way or another. The details of where and how it comes back can be very important – but it always comes back. (Generally, by running to the ocean in one form or another, then heated by the sun and vaporized into clouds, then pouring back onto the earth in the form of rain or snow.)

But it might not come back in a convenient form, or at convenient time or place. Many countries that have almost no rainfall nonetheless have prosperous agricultural sectors. They manage this feat by pumping water from the deep aquifers beneath their land area – water that was laid down as long as two million years ago – and using it to irrigate land that receives little or no natural rainfall. Saudi Arabia is one example of a country that uses groundwater mining to prop up its agricultural sector; they have been self-sufficient in wheat production for the last three decades, with almost five million hectares under cultivation. The trouble with mining water, of course, is that the water in those aquifers refills slowly, if at all. Alarmingly, more than half the world’s population now lives in countries that (a) rely at least somewhat on fossil water, and (b) have water tables that are falling.

Countries like Saudi Arabia are phasing out their irrigation programs. For the Saudis, self-sufficiency in grain was a strategic decision, not an economic one; it would have made more sense for them to buy grain on the international market than to prop up farms in the desert. Their shift back to market-based food supplies is being forced on them by the drying up of their reservoir, but no Saudis will go hungry as a result. The picture is not so optimistic in countries like China and India. 80% of China’s grain supply comes from irrigation, and 60% of India’s. Those countries are not as arid as Saudi Arabia, but their natural rainfall does not support the level of irrigation that is in place, and they are rapidly mining out their fossil water reserves.

In the short term, that’s good news for US farmers. American fossil water reserves are diminishing, but only 20% of our grain crop relies on irrigation. Our rainfall supports our agricultural infrastructure, for now – meaning that US grain producers will still be in business when China and India are looking for food. In the short term, American farmers are on the sweet end of the stick.

That’s likely to change, however, and next week we will look at why.

There’s nothing more heartening for a farmer than to have all the stars line up: high prices for your crop, great weather throughout the growing season, and a bumper harvest at the end of the season. That’s the scenario that tomato growers found themselves in earlier this year, with record prices and a solid harvest putting a gleam in many growers’ eyes.

Then came the salmonella outbreak. More specifically, then came the Food and Drug Administration’s pronouncement that the culprit in the salmonella outbreak was none other than the humble tomato. On June 2, tomato growers were getting $16.63 per box. On June 3, the feds made their announcement. By the end of the week, the price per box had fallen by $3. By month’s end, the price had plunged by 75%. Most growers left half their crop or more rotting in the field; consumers had abandoned tomatoes so quickly and so thoroughly that it literally wasn’t worth the cost to harvest.

Salmonella is a serious disease, and this was a serious outbreak. As of this morning, almost 1300 confirmed cases have been reported, and two people have died. Food safety is an important responsibility of the FDA and state agriculture offices, and we have to take that seriously, even if it means losses – huge losses for the tomato growers, whose total loss may top $200 million this year – for farmers.

The only problem is – oops – tomatoes had nothing to do with the salmonella outbreak. The FDA’s call was flawed – and the tomato growers lost three-quarters of their crop because of it. One farmer said that he could deal with a hail storm wiping out his crop – but to have his hopes for the year destroyed by a bad call by a bureaucrat is unbearable.

Now the FDA says “never mind, it wasn’t tomatoes – it was jalapenos!” Pepper farmers will be taking their turn for a financial beating. Let’s hope that the FDA has gotten it right this time. The track record isn’t compelling – and in fact, at least one state agriculture official is advising that people ignore the FDA’s reporting until there is firmer evidence, at least as it applies to produce grown in-state, where no salmonella connection has been found.

In my view, this heightens the importance of accurate labeling on produce so that consumers can determine where their produce comes from. If there’s an outbreak of salmonella on Mexican pepper farms, then there’s no reason for people to avoid peppers grown in Georgia – but right now, most consumers can’t tell where the peppers came from. Labeling requirements would make it possible for consumers to exercise more informed caution when there are public safety issues in play. It’s rarely an entire crop or plant type that is the source of a health problem, and consumers need to be educated about the realities of managing risk in the produce market.

I suspect that my friends in the tomato industry might be in agreement.