Friday, 31 May 2013

A Country Where Food Really Matters

P.E.I. has a long and interesting relationship with Japan that continues to this day. There was always the fascination with the fictional Anne of Green Gables, a strong headed woman living in a sparsely populated bucolic setting, so different from the cultural and physical conditions in Japan. But there is real business that goes on too,  and Japan has always been a very exacting customer. I remember covering stories of the herring row industry where Japanese technicians would oversee the packing,  and demand extremely high standards. That has continued with the tuna fishery, blueberries and now soybeans and canola.  Farmer Raymond Loo has developed other markets for blackberries and even dandelion root.   It's an excellent working relationship with very strict standards: as long as PEI supplies excellent quality,  Japan will continue to provide a lucrative market. (yes there are times when the tuna market is oversupplied and prices fall, but when fishermen supply the market at a reasonable pace, prices tend to stay high.) 

There's one other important condition for selling to Japan, consumers there are not interested in genetically modified foods. It's provided PEI soybean growers a chance to grow what's called Identity Preserved (or IP, essentially non-gmo) varieities. This goes against the grain in North America where more than 90% of the soybeans grown are gmo's (most have been bred by Monsanto to tolerate a glyphosphate herbicide called round-up). 

A story today that should  worry a lot of people in the U.S. grain industry.  Monsanto has been trying to get genetically modified wheat on the market, but it hasn't been licensed yet. This week a commercial field in Oregon was discovered to have gm wheat, and Japan, one of the Americans most important wheat customers has suspended shipments. Europe will pay close attention as well.

The headline in this story is misleading, Japan would never have ordered GMO wheat in the first place, but there's some good information  in the story.

Japan Cancels GMO Wheat Order After Concerns Over U.S. Grain Developed By Monsanto

By Naveen Thukral and Risa Maeda

SINGAPORE/TOKYO, May 30 (Reuters) - A strain of genetically modified wheat found in the United States fuelled concerns over food supplies across Asia on Thursday, with major importer Japan cancelling a tender offer to buy U.S. grain.

Other top Asian wheat importers South Korea, China and the Philippines said they were closely monitoring the situation after the U.S. government found genetically engineered wheat sprouting on a farm in the state of Oregon.

The strain was never approved for sale or consumption.

Asian consumers are keenly sensitive to gene-altered food, with few countries allowing imports of such cereals for human consumption. However, most of the corn and soybean shipped from the U.S. and South America for animal feed is genetically modified.

"We will refrain from buying western white and feed wheat effective today," Toru Hisadome, a Japanese farm ministry official in charge of wheat trading, told Reuters.

The U.S. Department of Agriculture on Wednesday said the wheat variety was developed years ago by biotechnology giant Monsanto Co. It was never put into use because of worldwide opposition to genetically engineered wheat.

Wheat, long known as the staff of life, is the world's largest traded food commodity and it is used in making breads, pastries, cookies, breakfast cereal and noodles.

Asia imports more than 40 million tonnes of wheat annually, almost a third of the global trade of 140-150 million tonnes. The bulk of the region's supplies come from the United States, the world's biggest exporter, and Australia, the No. 2 supplier.

The USDA said there was no sign that genetically engineered wheat had entered the commercial market, but grain traders warned the discovery could hurt export prospects for U.S. wheat.

"Asian consumers are jittery about genetically modified food," said Abah Ofon, an analyst at Standard Chartered Bank in Singapore. "This is adding to concerns that already exist on quality and availability of food wheat globally."

In 2006, a large part of the U.S. long-grain rice crop was contaminated by an experimental strain from Bayer CropScience , prompting import bans in Europe and Japan and sharply lowering market prices. The company agreed in court in 2011 to pay $750 million to growers as compensation.


A major flour miller in China, which has been stocking U.S. wheat in recent months, said importers will tread carefully.

China has emerged as a key buyer of U.S. wheat this year, taking around 1.5 million tonnes in the past two months. Chinese purchases in the year to June 2014 are estimated to rise 21 percent to 3.5 million tonnes, according to the USDA, with most shipments coming from the United States, Australia and Canada.

Japan's Hisadome said the government has asked U.S. authorities to provide more details of their investigation and Japan will stop buying the wheat concerned, at least until a test kit is developed to identify genetically modified produce.

There is no U.S.-approved test kit to identify genetically engineered wheat. The USDA has said it is working on a "rapid test" kit.

The Philippines, which buys about 4 million tonnes of wheat a year and relies mainly on U.S. supplies, is waiting for more details from the USDA before acting, an industry official in Manila said.

An agriculture ministry source in South Korea said the government is reviewing the discovery, adding the country thoroughly inspects products from the United States as part of safety checks.

"I won't be surprised if other countries start cancelling or reducing their purchases of U.S. wheat, particularly Asian countries, putting pressure on wheat demand," said Joyce Liu, an investment analyst at Phillip Futures in Singapore.

The benchmark Chicago Board of Trade wheat futures eased half a percent on Thursday after rallying in the previous session.

Genetically modified crops cannot be grown legally in the United States unless the government approves them after a review to ensure they pose no threat to the environment or to people.

Monsanto entered four strains of glyphosate-resistant wheat for U.S. approval in the 1990s but there was no final decision by regulators because the company decided there was no market.

The St. Louis-based firm downplayed the incident in a statement posted on its website. "While USDA's results are unexpected, there is considerable reason to believe that the presence of the Roundup Ready trait in wheat, if determined to be valid, is very limited," it said.

Still, importers are not in a position to shun wheat from the United States, which accounts for about a fifth of the global supplies, analysts and industry officials said. (Additional reporting by Karl Plume in CHICAGO, Niu Shuping in Beijing, Erik dela Cruz in MANILA, Jane Chung in SEOUL and Yayat Supriatna in JAKARTA; Editing by Amran Abocar and Richard Pullin)

EU recommends testing of US wheat after Japan finds GM grains, blocks imports

BERLIN — The European Union is urging its 27 member states to test certain wheat shipments from the United States after unauthorized genetically modified grains were found on a U.S. farm, officials said Friday.
The move came after Japan halted imports Thursday of some types of wheat from the U.S. following the discovery of an experimental strain that was tested by Monsanto but was never approved.
“The Commission is following carefully the presence of this non-authorized GM wheat in Oregon in order to ensure that European consumers are protected from any unauthorized GM presence and make sure that the EU zero tolerance for such GM events is implemented,” EU’s consumer protection office said.
The agency said it was seeking “further information and reassurance” from U.S. authorities and had asked Monsanto for help in developing a reliable test for GM grains in soft white wheat.
Shipments that test positive should not be sold, but current information from the U.S. Food and Drug Administration indicated the wheat posed no threat to human health, it said.
The European Union imports more than 1 million metric tons (1.1 million tons) of U.S. wheat each year. Eighty percent of that was soft white wheat, the majority of which is exported to Spain, officials said.
European consumers have generally objected more strongly to genetically modified foodstuffs than Americans.

Tuesday, 28 May 2013

The Wrong Person, the Wrong Time

I remember the first time I met Irene Novaczek in the early 1990's.  She was concerned about sedimentation in one of the rivers around Charlottetown, the Clyde or the North. I had interviewed many people who brought a lot of enthusiasm to environmental issues, but Irene brought something more,  depth and understanding that only a true scientist could bring.  It didn't make interviewing  her easy because she added a lot of detail, but I liked and respected that. I saw her bring the same determination and depth to many other issues over the years.

When she became the director of the Institute of Island Studies I thought the University and the rest of us were very lucky to have her in a  job where she could educate and influence many many more people, both here on PEI and abroad.  And as an educator she did just what a good teacher should, challenge, foster debate, make people think a little harder about what makes our part of the world special, what we need to do to maintain what's good about it.

When I first heard that university officials had let her go, I could only think that they had to cut loose a high profile, well respected person in order to get the public riled up, and challenge the government to provide more money to the university. Nothing else made sense.  Irene brought in money, prestige, provided jobs and opportunities for students, organized lectures on things that matter, and had won the respect of all who came in contact with her.  So if that's the strategy, I'll bite, I'll write to my MLA, and the Minister of Education, and the Premier and ask that the University get more funding.  If that's not the strategy, then university administrators have made a colossally stupid decision.

PEI is at a tipping point with its economy, political arrangements (Maritime Union anyone, Senate reform), and certainly its environment. We need Irene Novaczek to provoke us, get us talking. We need her heading up the Institute of Island Studies.

Anyone wishing to sign a petition to support Irene should go here.

Thank you

Tuesday, 14 May 2013

Back Fishing Lobster- Now What

There will be  a lot of soul searching on PEI today, by the many fans of the Toronto Maple Leafs, and lobster fishermen and their families.  One of these matters a lot more than the other.

Both groups are at least disappointed, many angry at how things turned out. There will be finger pointing, a hunt for villains.  I'm a Canadiens fan, so I'll leave the hockey to someone else.

The food business is a tough racket, especially for primary producers. A large Idaho potato grower Albert Wada, who helped organize the United movement to improve prices, put it this way, and it's no different for lobster fishermen:

"They occupy the lowest position in the economy… above them in the marketing chain are processors, packers, sales organizations, marketers, brokers, transporters, wholesalers and retailers…

Farmers get paid after all of them subtract their expenses and margins…

Risk must be passed back to the farmer for those above them to remain healthy and viable…"

So was the lobster "strike" a failure?  Definitely not.  It was hard to see processors agreeing to a price increase, because even they are many hands and a long distance from the eventual consumer.  We only have to remember the Polar adventures,  Ocean Choice shutting down,  North Lake needing new owners,  Mariner going bankrupt, etc. etc.  to understand that PEI processors are not spinning gold in those plants. Processors here are more the price messengers, and yes for them to stay in business, they have to short-change fishermen (see Wada above).

It's not to say that the decisions PEI processors make don't matter.  I continue to think (see earlier post) that it's the Maine lobster fishery and it's relationship to PEI processors that's casting a shadow over PEI.  Fishermen there can harvest year around with up to 1200 traps (300 or so on PEI with clearly defined two month seasons). Maine landed more than a hundred million pounds last year (four times what PEI lands), and this cheap lobster was gobbled up by Maritime processors throughout last Fall and Winter, swamping the market with low-priced products, making a lot of the processed lobster produced earlier from the PEI catch,  uneconomic. My guess is processors don't want to repeat that this year and hence the low shore price, and (again refer to last post) at least two processors continue to bring the U.S. product into their plants, so the economics must still work (for these two processors if no one else).   If it hasn't happened yet,  Maritime fishermen need to at least speak to fishermen in Maine to get a better understanding of how this market works. If the off-season fishing (when lobsters are molting and poor quality anyway) isn't that important to Maine fishermen (it can't be  a money maker at last year's prices)  then maybe some fishermen solidarity is possible. (I know that sounds naive).

PEI Premier Ghiz has asked former auditor general Colin Younker to look into the lobster market,  and provide some clarity about what's going on. It's a worthwhile exercise. PEI's lobster industry, like so much else, is unique.  It's heavily dependent on a smaller lobster that gets taken to a plant and ends up frozen or in a can. (PEI harvests 80% of the world's production of "canner" lobster.) Some see that as a blessing (lots of plant jobs) others as a curse (a lower valued product that will always return PEI fishermen a little less.)

So yes the strike hasn't led to higher prices in the short term (and often there's a price slump after Mother's Day) but it's at least spurned Younker's report, port meetings,  a chance to ask better questions, and an understanding that fishermen can act together if pushed too far. That's important for both fishermen and buyers to understand.   Tignish fishermen will get the blame for ending the strike, but don't forget that Royal Star is a co-op, the fishermen benefit from any profits the plant makes. (this is important context that many in the media missed,  because it makes the story a little more complicated?)

There are no simple solutions. There will be more discussion about price setting before opening day ( a marketing board approach is a possibility, but that's complicated by the fact that more than half the catch goes to New Brunswick for processing).

Bottom line:  going out at the beginning of the season and catching as much lobster as possible clearly isn't working so maybe leaving a hundred traps on the wharf at the beginning, and only bringing them out as supply and price dictates is worth a  try.  The Liberals had promised developing more lobster pounds in the last election, that hasn't happened yet.  Some fishermen see using the courts to sue buyers and brokers for price fixing (that was done successfully  in the wild blueberry business in Maine).  And surely all of those trade missions to Asia and India will start paying off at some point.

 The lobster industry has been a bedrock for many rural communities,  so this really matters.  Fishermen have now moved beyond whining and complaining, and expecting others to fix the problem. Gaining some clout in what's become a very hostile marketplace won't be easy, but this past week fishermen made a start. 

Saturday, 11 May 2013

Lobster Strike : Fighting the Right Battles

I fully support and admire Maritime lobster fishermen for tieing up their boats when they discovered shore prices set around and under $3.00 a pound,  well below their cost of production.  Anyone who's read this blog knows I worry that farmers and  fishermen have been playing Survivor for the amusement and enrichment of food processors, brokers,  and retailers for too long.  Working to control the supply of commodities is really the only way to fight back, and that's just what the fishermen are trying to do.   It goes against the instincts of primary producers to work this closely together, and there are various legal restrictions limiting what's possible, but taking a stand that 1960's prices are not enough in 2013 is the right thing to do.

The fishermen are now fighting the low prices on three fronts. They've stopped fishing (writing this late Saturday May 11),  blockaded two processing plants in Beach Point and Georgetown (PEI Courts have ordered  the blockades be removed), and are now getting ready to stop trucks of lobster coming  from the Madeleine Islands and bound (we're told) for New Brunswick and the United States.

A couple of things that need more attention. The increased role of brokers in the lobster business is a major change in the last few years. There was a time when PEI plant owners would travel to the United States and negotiate sales face to face with buyers. Both knew the kinds of prices they needed to keep their businesses going and the importance of building trust and relationships. Brokers are a little different, they are true middlemen, and here's the important part, their business is built on "margins and volume", a percentage of the selling price, or a fixed per pound fee.  The important thing is that the actual price doesn't really matter to brokers, as long as they get their margin, and if they can keep prices low, the better chance to move bigger volumes. I'm not saying that getting rid of brokers would automatically put more money in the pockets of fishermen, I'm saying that fishermen need more confidence that whoever is out there selling is trying to get the best price, not just move the most volume.

The reason for the blockades at the two PEI plants is also important and I think underreported. These are plants that are buying and processing U.S. caught lobster from Maine.  This is something relatively new as well.  Maritime plants have been buying U.S. lobster when the Fall fishing season here is over (October), partly because of the use of foreign workers and the need to keep the plants working into the early winter, partly because of the improvement in the value of the Canadian dollar, and partly because the Maine lobster has been very cheap (see here: and here:

Buying U.S. lobster NOW when PEI fishermen are landing the best quality lobster of the season seems wrong.  Furthermore I'm wondering whether this lobster is responsible for establishing the low shore price (other processors know they'll be competing with the plants buying the U.S. product). It's difficult to demand restrictions on U.S. lobster given Canada's absolute dependence on the U.S. market, but it certainly makes sense for fishermen to try to slow down or stop  this importation.  I don't know the contractual arrangement these plants have with U.S. fishermen, but this would be a concession processors could make to help end this dispute.

I'm not sure about blocking trucks from the Maggies. Fishermen there are getting paid better prices, and the product is going somewhere else. It feels like fishermen simply want another target to get the attention of the media, but hurting fishermen and co-ops elsewhere doesn't make much sense. Building alliances (even with Maine lobster fishermen who need better prices too) seems more constructive.

 It's hard to see how this will end. There's little reason for fishermen to go back on the water to lose money, but at some point Employment Insurance requirements will kick in (unfortunately EI benefits have become a lifeline for fishermen in the last few years) and they'll need some weeks of work.  Fishermen at least should be able to get some insight into the lobster market and whether they're being treated fairly, and everyone else in the lobster foodchain will stop taking the fishermen, and lots of cheap lobster,  for granted.  The only caution. Retailers and restaurants charge big prices because they can, it's what the market can bear. Fishermen need confidence that someone in the marketing chain is looking out for their interests too, demanding prices that will return fair value to the wharf.  Fishermen are standing up for themselves, and that's a good start.


Wednesday, 1 May 2013

The Right Stuff

I was very fortunate to spend a week in Barcelona, Spain.  The Gaudi architecture was stunning, not a straight line or square corner anywhere, but what's really staying with me is the food.  Yes it was excellent, whether from one of the bakeries that are everywhere,  one of the hundreds of restaurants around the city, or the fabulous markets.  I saw things that would make a PEI food inspector or PETA member gasp, hanging cuts of meat that made it obvious they came from living creatures, not the sterile cuts on white trays we get in supermarkets here.  I saw dozens of prepared sandwiches in bakery windows, barrels of olives, unwrapped cheeses. It felt raw and genuine. What I didn't see were blocks of fast food restaurants run by teenagers, or, and this was really noticeable, large numbers of unhealthy and clearly overweight consumers. Yes everything looks better when you're on holiday but there was an artistry to the way meat was cut, coffee was made, fresh gelato (ice cream) created  that I don't see very often in North America (the big world traveler that I am).  It's not surprising that the slow food movement started in this region. There's a culture of pride in how food is produced and presented, not the cheapest and quickest is "always the best" like here.

I'm also just starting to read Michael Pollan's new book about cooking,  and he touches on many of the same  themes, that big food corporations here have taken over our food preparation, and that we're  losing a lot because of that including our health.  The difference for me is that there's an elitism here associated with slow food (I don't think it's intentional, it's just the contrast with the fast food culture) that you don't get in Spain.  They just haven't done things any differently for hundreds of years. I know many European countries like Spain are in financial trouble, and that I was seeing the best the country has to offer. I just saw a determined look in the faces of the farmers, butchers, restaurant and shop owners that producing, preparing and eating food properly is just too central to their culture to give up.  I hope they never have to. It's something we could learn from. I suspect I'll be coming back to this in the months ahead.