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>NAFTA and US Corn Subsidies

>Explaining the Displacement of Mexico’s Corn Farmers

by Rick Relinger

prospectjournal.ucsd.edu (April 2010)

This paper intends to explicate the causal relationship between US federal subsidies for domestically produced corn and the post-NAFTA rural to urban migration in Mexico. While corn production has been central to the Mexican economy for centuries, it cannot economically compete with highly subsidized corn produced in the United States. In 1994 the implementation of the North American Free Trade Agreement (NAFTA) liberalized the markets of Canada, the United States, and Mexico, effectively eliminating nearly all trade barriers. Consequently, corn produced in Mexico now competes directly with American corn in North American markets. Competition with artificially distorted US corn prices has driven unsubsidized corn produced in Mexico out of its customary domestic market as Mexican consumers began to purchase American corn. Mexican corn farmers were no longer able to make a sustainable living due the plummeting demand for their produce and accordingly migrated from rural farms to urban centers in search of employment. Therefore, American corn subsidies are primarily responsible for the rural to urban population shift in Mexico that manifested following the NAFTA deal in 1994.

Introduction

Since the 1994 implementation of NAFTA, massive rural to urban migration took place within Mexico as agrarian farmers moved to metropolitan centers. This tri-lateral free-trade agreement between the Canada, the United States and Mexico was unprecedented, particularly the relationship between the United States and Mexico, as states with such drastically different levels of development merged their economies. This paper will examine which factors are responsible for this massive internal migration within Mexico following the integration of the North American economies. There are two highly divergent explanations for the Mexican migration and subsequent urbanization that followed the signing of NAFTA, which I will detail in the literature review. The determination of the culpable factors for this migratory flow is crucial because the accepted interpretation will significantly influence how states will approach free-trade agreements and their inclusion of rules pertaining to the trade of agricultural commodities in the future. This study is particularly pertinent as the looming Panama and Colombia free trade agreements, modeled after NAFTA, are currently being debated by the United States Congress.

The paper’s underlying hypothesis is that American corn subsidies, which led to the flooding of Mexican markets with American corn following the signing of NAFTA, is the primary factor responsible for the post-1994 internal displacement of rural farmers in Mexico. The trade agreement effectively eliminated all trade barriers and placed Mexico’s domestically produced corn in direct competition with highly subsidized corn imported from the United States. Consequently, Mexican corn farmers, who comprise the majority of the country’s agricultural sector, experienced drastic declines in the domestic price of their product and thus faced increasing difficulties to attain a sustainable living. Hence, we observe high levels of migration into Mexico’s cities in the latter half of the 1990, and the beginning of the 21st century, as these displaced farmers abandoned their previous livelihood in search of employment.

Accordingly, this report investigates the relationship between American corn subsidies and rural to urban migration in Mexico. Specifically, the study will evaluate the migratory population shifts in Mexico and American agricultural subsidies with respect to data on quantities of US crop exports to Mexico, measures of Mexican internal crop production, levels of domestic crop prices, and rates of agricultural employment. To discern the specific impact of American corn subsidies, trends in the statistics delineated above regarding corn will be juxtaposed with avocado produce, which is contrastingly not subsidized by the American government. To preview this paper’s findings, it is evident that the subsidization of American corn drastically lowers both the price of corn and levels of employment in the agricultural sector, triggering the out-migration of rural corn farmers to Mexico’s cities. This report will commence with a literature review that situates the study’s research in context of the historical discourse between proponents of free-trade deals and critics that call for the responsible regulation of trade expansion. Next, it will describe the rationale that guides the hypothesized relationship between federal subsidies for American corn and Mexican internal displacement and further explicate methods of statistical measurement. Lastly, the paper will detail the research findings and propose additional issues for future research.

Body of this Report

The body of this long report contains the following four sections not included this post:

* Literature Review

* Hypothesis

* Data and Methods

* Results

You can read them at http://prospectjournal.ucsd.edu/index.php/2010/04/nafta-and-u-s-corn-subsidies-explaining-the-displacement-of-mexicos-corn-farmers/

Conclusion

As the study’s results demonstrate, billions of dollars of federal subsidies for American-grown corn are largely responsible for the economic displacement of Mexico’s corn farmers. The impact of US corn subsidies has severely transformed the lives of people who have no influence on US policies. This economic vulnerability of Mexican farmers was initiated through the approval of the North American Free Trade Agreement. The inclusion of the agricultural sector within the agreement’s broader agenda of trade liberalization exposed Mexicans employed in agriculture to US domestic economic policies. (It is important to note that US-Canada side of the agreement contrastingly maintains significant restrictions to protect the Canadian agricultural sector.) Although these subsidies produced an increase in the corporate ownership of corn production, a decrease in corn prices, and dwindling numbers of employed corn farmers – not to mention the displacement and forced migration of Mexican corn farmers – Mexican voters have no voice in congressional deliberations regarding the approval of federal subsidies for American-grown corn.

This paper’s findings, and their centrality to economic vulnerability, must be acknowledged when considering the possibility of engaging in either bilateral or multilateral free trade agreements (FTAs). Currently, developing countries are refusing to reinitiate the World Trade Organization’s Doha Round negotiations. Their governments are duly wary of the potentially disastrous consequences of a liberalized agricultural sector in an asymmetrical system of global trade, as exemplified by US corn subsidies and the displacement of Mexico’s corn farmers (Anderson 2007). It is important that leaders of developing countries approach the recommendations of western trade negotiators cautiously, and consider the ramifications of agricultural liberalization for the welfare of their country’s citizens.

Although this paper demonstrates the catalytic role of subsidies for American corn in the out-migration of Mexico’s corn farmers, additional research is required. While this study examines Mexico’s corn workers as a homogenous entity, these farmers are a heterogeneous group. Future studies which differentiate categories of Mexicans employed in corn production would contribute to this paper’s findings. Specifically, it would be valuable to analyze how US corn subsidies respectively impacted the migration of corn farmers working on small-scale communal farms, known as ejidos, and those employed by high-production agribusinesses. Additional research is required on the consequences of NAFTA’s elimination of Mexico’s social service programs pertaining to agriculture. A study of the free trade agreement’s dismantlement of CONASUPO, the state enterprise designed to maintain the stability of the agricultural economy and employment, would further the understanding of other culpable factors in the economic displacement of the country’s corn farmers. Nevertheless, it is evident that by lowering both the domestic price of corn and employment levels of corn farmers, federal subsidies for American corn are primarily responsible for the post-NAFTA rural to urban migration of Mexico’s corn farmers.

References: http://prospectjournal.ucsd.edu/ref/refnafta.pdf

The views expressed are the author’s and do not necessarily represent the views of Prospect – Journal of International Affairs at the University of California at San Diego.

http://prospectjournal.ucsd.edu/index.php/2010/04/nafta-and-u-s-corn-subsidies-explaining-the-displacement-of-mexicos-corn-farmers/

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>NAFTA, Mexican Corn and the Commons

>How American industrial agriculture threatens Mexican biodiversity and social stability.

by David Bollier

On the Commons (July 19 2010)

What happens when a market-based agricultural juggernaut invades a 9,000-year-old system of commons-based maize production in Mexico? What are the on-the-ground consequences? How have the farmers using traditional agriculture responded? Journalist Peter Canby offers a stunning account of this saga in his well-reported piece in The Nation, “Retreat to Subsistence”. Highly recommended reading.

http://www.thenation.com/article/36330/retreat-subsistence

The modern part of this story starts in 1988, when a cadre of free marketeers within the Mexican government, led by President Carlos Salinas de Gortari, decided to throw their lot in with the “free market”. In a sense, it was understandable. The Mexican economy has long been beset by notorious corruption and inefficiency. It was thought that the NAFTA treaty with the US, which went into effect in 1994, would create millions of jobs, new industrial centers, and encourage rural villagers to move to cities, where they could get social services. The US and multinational corporations were only too happy to encourage the Mexican government to adopt this vision since it would open the doors to cheap and plentiful labor right across the border.

The sixteen years since NAFTA shows how misguided this whole fantasy really was. It was based on the dangerous fictions that “labor” and “nature” are simple economic units of production: inert, fungible and responsive to “market signals” such as prices and wages. In fact, NAFTA was no blueprint for Mexican economic development. It not only did not provide protected spaces for domestic production, it ran roughshod over people’s identities and local loyalties. As Canby writes, millions of Mexican farmers

consider growing corn more than an economic activity. It is something closer to a defining way of life. Since NAFTA, to the surprise of government planners in Mexico City, many indigenous farmers … have in effect chosen to withdrawn from the national economy, some weaning themselves off expensive chemical fertilizers and subsisting on the corn they can grow, harvest and barter. Economists refer to this phenomenon as a ‘retreat to subsistence’ …

This, at least, has been the response of many indigenous communities and family farmers. Others have not had the courage of luck to retreat to subsistence. In Juarez, multinational corporations relocated about 100,000 jobs to China, where wages were one-quarter the already-low wages in Juarez. This disinvestment cleared the way for drug cartels to become the largest employer in the city and for violent crime to skyrocket.

Meanwhile, because NAFTA eliminated tariffs on corn imported from the United States, American corn quickly undercut local markets, driving an estimated 500,000 farmers from the land each year. About half of them, searching for a way to support their families, try to enter the US illegally.

A Mexican economics professor, Alejandro Nadal, cannot fathom why the Mexican government essentially consented to dismantling the community-based corn economy in the country:

There were three million corn producers and five people per producer family. That’s fifteen million people. Then there were transporters and other attached industries – 22 million people – a quarter of the country’s population. Before putting your corn sector into NAFTA, wouldn’t you think about it twice? They government had no single study for why they put corn into NAFTA.

Astonishing as that is, the more significant story may be how genetically modified corn from the US is threatening the integrity of maize cultivars that have been grown for thousands of years. Essentially, subsidized US corn sold on international markets is making locally grown corn economically unsustainable.

The global market is subverting Mexican maize, which functions as a commons – the interplay of community, ecosystem and crop over thousands of years. Canby writes:

In the Mexican countryside there are fifty-nine corn ‘landraces’, distinct cultivars that have been carefully developed over millenniums by indigenous farmers for different attributes: growth at high altitudes, early or late maturation, the ability to withstand drought or heavy rain and utility for particular dishes or shamanic rituals.

Mexico’s landrace corn is consumed locally, but because it benefits from 9,000 years of breeding for diverse conditions, it represents a reservoir of genetic adaptability that many consider essential to the future of the world’s commercial crop.

American industrial farmers treat corn as a simple commodity that grows in the soil; not much thought is given to the local ecosystem, water supplies, climate, soil quality, et cetera. The corn seed is a simple genetic, biological “machine” whose output can always be manipulated with pesticides, chemical fertilizers or genetic modification, goes the thinking. That’s one reason that the genetic diversity of corn grown in the US has narrowed down to seven inbred lines of seed – a development that makes the US corn crop highly vulnerable to pests and a potential collapse of the corn crop.

Once corn from the US could flood Mexican markets, fears grew that this GMO corn would “pollute” the native cultivars that had been grown there for thousands of years. People worried that crop traits that had not evolved in that local context could harm their maize cultivars, other plants and the ecosystem.

And in fact, Zapotec farmers in Oaxaca began to detect “mutant plants” in the fields, a suspicion that was later confirmed by Professors Ignacio Chapela and David Quist of the University of California, Berkeley, in a controversial article in Nature magazine in 2001. Many indigenous peoples in Mexico have since mobilized to resist the genetic pollution of their maize.

It turns out that the notions of “efficiency” and “productivity” peddled by the agro-biotech companies and market economists are highly suspect. Michael Pollan, author of The Omnivore’s Dilemma (2006), has pointed out that each bushel of industrial corn grown in the US requires one-quarter to one-third of a gallon of oil for fuel, fertilizer and other applications, or about fifty-plus gallons per acre. US corn can only undercut local cultivars because it enjoys cheap oil and government subsidies. But rising prices of oil and chemical fertilizers that damage the land are calling narrow, market-based notions of productivity into question.

By contrast, the indigenous mode of maize cultivation is a more holistic, socially stable metric of productivity. It takes countless “externalities” and contextual conditions into account. Indigenous farmers over generations have learned how to diversify the genetic base of their crops by coaxing out specific characteristics that thrive in their biodiverse environment. As a result, Mexican maize is hardy capable of evolving as new pests and climatic conditions arise. Canby even cites how Mexican maize coexists with all sorts of “weeds”, which apparently play some genetic role in the domestication of corn seeds.

One indigenous farmer put it this way:

The important thing is that we don’t break the connection to the surrounding ecosystem. These fields are part of the natural system; they’re not apart from it.

It is customary for westerners to think we should try to “improve upon” nature. But in the closing line of Canby’s article, the indigenous farmer Jesus Leon Santos corrected this idea:

No, it’s not a way of improving nature – it’s a way of getting closer to the processes of nature, getting as close as possible to what nature does.

See Also:

The Mexican Corn Crisis
http://onthecommons.org/mexican-corn-crisis

A Commons-Defining Bill
http://onthecommons.org/commons-defining-bill

Ethanol’s Dissonant Sounds: A Dirge for the Commons
http://onthecommons.org/ethanol8217s-dissonant-sounds-dirge-commons

http://onthecommons.org/nafta-mexican-corn-and-commons

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>Why Obama’s government is George Wallace …

>… Monsanto is the Ku Klux Klan,

and we are all black children now.

by Linn Cohen-Cole {1}

opednews.com (January 25 2009)

The US food supply is being taken over at this moment through regulations most people have never heard of or know about {2}.

For years, environmentalists have been struggling to stop pesticides that are deadly to everything, and food safety people have been trying to stop GMOs that are threaten to human health and all of nature, and farming groups have been trying to stop regulations that make farming literally impossible. The arguments for organic farming and freedom to farm go beyond argument – it is patently obvious that is the only thing that makes any sense whatsoever.

So, why is industrial agriculture – which is depleting and contaminating our water supply, filling animals with drug after drug that make us sick, using such disgusting practices it has created Mad Cow and Bird Flu, wiping out fish stocks in the ocean with poisonous run-off into the Mississippi, causing suicides by the tens of thousands in India and our own farmers deaths in huge numbers in the eighties here, destroying farming communities and the democratic base they provide this country, killing bees, and giving us diabetes and heart disease and cancers – pre-eminent over an agriculture that is simply and by all common-sense, good?

Discrimination.

Look hard at that word. It is unfamiliar within the paradigm of agriculture but it is the unseen bedrock reality and it is the source of all the insanity mentioned above.

The poisoning of the earth, the mutating of nature, the dying of bees and farmers, do not derive from an even remotely just system but from one as systematic and malign as racism, and with same infiltration of government and extra-governmental use of terror to prevail.

Monsanto is currently in the process of wiping out hundreds of farmers in southern Illinois and destroying previously close communities through fear and paranoia. Within a frame of “agriculture” or defending “patents”, it somehow passes as “normal” to have hired thugs trespassing, harassing, threatening, tracking, and abusing farmers and then pushing them into bankruptcy through lawsuits against patent infringement {3}. Pulled from an agricultural frame, though, one can see that those patents as similar to laws that defined slaves as three fifths of a man legally, because they, too, contravene all equal and natural rights of each individual to what is inherently theirs – in the first case, freedom and a vote, and in the second case, ownership of nature itself. And Monsanto is also acting as did the KKK, striking fear into communities on purpose, to cow farming communities and even to eliminate them in what it calls “rural cleansing” {4}

A discriminatory group has intruded itself into a setting in which all people once had equal rights over nature, and it has managed to alter the entire system of rights which no one had noticed as “rights” before (access to nature being so unconsciously assumed). This immense overturning of justice did not happen accidentally but derived from extremely corrupt means – inserting a Monsanto employee, Clarence Thomas, onto the Supreme Court to make rulings that genetically altered organisms were no different from normal ones, and then on intellectual property law which allowed for the take-over of nature through genetic engineering. People have recognized that this gave Monsanto a massive benefit – a lock on ownership of whatever it screwed with. But what has been missed is that those rulings by a black “Justice” destroyed previously taken for granted and thus undefined civil and human rights around nature.

The approach to pesticides has been similar. They have been seen merely as a product to be tested and approved or not approved, but something primary has been missing in that – a recognition that the corruption of the process is a civil rights issue. “Life”, liberty and the pursuit of happiness. In those words, it becomes plain that health, and thus what is done to threaten nature, the source of all life, is a civil right. Lost within “agriculture” and “commodities” or “profit” or “studies” is the profound truth that this is about life or death and our civil rights to life. One group is using corrupt means to discriminate against a defined segment of the population – all of us who wish to live.

We are used to seeing discrimination personified – George Wallace in the school house door blocking little black children from getting an education, and Bull Connor setting fire hoses and dogs on peaceful black protesters. That template became the defining one for civil rights – white over blacks, good people being stopped by the government. But it does not fit civil rights abuses now.

Today, government is not the rescuer but itself is attacking a marginalized group and stands between it and something they need. This is even harder to recognize now that Obama is president – for he is a black man overseeing a government that is discriminating and abusing a marginalized group. Who is the marginalized group? It is hard to see as well because it is all of us. And what is that group being denied through discriminatory laws and practices (and armed raids)? What we all need to survive – nature in a healthy state and full freedoms to it. And who is being discriminated in favor of? Multinational corporations such as Monsanto.

It makes for a much harder to draw political cartoon because the discrimination is so total and the government, run by a black man, is part of it.

But let’s look at only a couple of examples to see how it works precisely as discriminatory laws worked against the civil rights of blacks.

Voting rights were the heart of civil rights because they defined the equal personhood of black people. To block them from this civil right, poll taxes were interposed between them and the vote. They “were allowed” to vote, only the cost made it prohibitive.

Today, farmers are allowed to farm but the FDA’s seed contamination regulations (with Monsanto‘s hand in them easy to see) have just listed seed cleaning equipment as sources of seed contamination and farmers are no longer allowed to use the equipment they have to clean seed to sell to the public now. The seeds included? Those eaten raw (flax, poppy, sesame); those sprouted (wheat, alfalfa, beans, greens, broccoli, et cetera); those pressed into oils (corn, soy, sunflower, canola, et cetera); those used for animal feed. Oh, farmers can still clean those seeds but they would have to get equipment the FDA now requires as safe enough – a million to a million and half dollar building and equipment … for each line of seed. A farmer with hand made seed cleaning equipment he’s used for forty years to clean seeds which never made a single person sick, would now need to build fifteen buildings if he wishes to raise and sell fifteen kinds of seeds. This corporate influence is criminal and corrupt. But even putting that aside, the imposition of corporate standards on small farmers is discriminatory. And intentionally so. Just as with voting rights, it is meant to deny the civil rights of one group to the advantage of a more powerful one.

A second example. Once poll taxes were eliminated, racist white people found another means of blocking blacks from voting – literacy tests. Using the seemingly rational argument that people should be educated enough to vote, they inserted this bar between black people and their full Constitutional right to vote. Black people were slurred, deemed “too dumb to vote”. No one, of course, was testing whether the racists were too undemocratic to vote, too cruel, too miseducated, too corrupt, or too … whatever. And no one asked whether common sense and decency and a history of being treated unjustly were actually ideal qualifications for voting and literacy was irrelevant and not included in the Constitution. What mattered was only that one group discriminated against another and denied them their Constitutional rights and using “false measures of value” to do so.

Today, farmers have “the right” to farm but the government is attacking their products as “too dirty to sell”. The USDA and its state agriculture departments are increasingly making raids against Mennonite and Amish raw milk dairy farmers and others who have been producing and selling their clean and healthy products for hundreds of years without complaint from customers {5}. The government lab results which are used to close down farms don’t match independent labs, and farmers fear the permits demanded of them set them up for attacks against them. Those behind the “food safety” attacks represent filthy food already making our population sick – food derived from disease-creating feed processes, from GMOs, from heavy pesticide use, from hormones, steroids and antibiotics. Just as the racists hid behind literacy as the criteria for democracy, but were at their core illiterate about democracy and anti-democratic, those discriminating against farmers (“farmists”?) hide behind “food safety” as a bar to selling food, but are at their core are “too profit-blinded to produce safe food” as well as profoundly anti-democratic. “Food filthy” is attacking those providing true food safety and the healthiest food in the country. These attacks are certainly criminal and corrupt and in Canada, a farmer is actually suing the government for criminal conspiracy {6}. But what is important is to see through the criminality and corruption and the bogus use of “food safety” to the discrimination involved in generating a view of farmers as incapable of farming adequately – and by those farming dangerously. Just as with demanding literacy tests (which were also rigged), condemning farmers’ food as unsafe it is a device meant to stop farmers from farming. And just as with voting rights, this is discrimination – an absolute denial of the civil rights of one group to the advantage of a more powerful one.

So, American farmers can farm, only their means have been removed and they are being being raided and their products seized and the public is told what they produce is dirty and dangerous. Many farmers refuse to get permits out of fear and out of their belief it is their Constitutional right to contract freely with neighbors without the interference of a corrupt government, one that is not only intentionally discriminatory but has become dangerous in its armed attacks against them. They want testing for pathogens but distrust the government labs now. And in California, “too dirty to sell” comes now in the form of a government law that intentionally sets the bar higher than normal fresh milk can meet. Farmers recognize the George Wallace/Bull Connor behind the demand for permits, and are standing up for their Constitutional rights against their own government, and using the language of Rosa Parks and the civil rights movement in doing so {7}

Monsanto triggers thoughts of the civil rights movement, because its KKK tactics work the same way, as does its infiltration of good ole boy networks within state and national governments. [US Secretary of Agriculture] Vilsack {8} pushing of anti-democratic laws that preempt a community’s means to control what is planted in its area, his pushing for GMOs, his pushing of NAIS, his supporting CAFOs which wiped out thousands of small farmers in Iowa, should be seen only through the lens of his working for Monsanto or of the government being corrupted through his closeness to Monsanto. Instead, his actions should be seen as massively discriminatory against farmers and against citizens whose constitutional right to life, and to liberty through democratic laws, is being aggressively and endlessly and covertly and powerfully denied.

Pull farming and pesticides and GMOs out of the frame they have been held in. It’s almost like pulling them out of the mud. Wash them off and hold them up and look at them again. Realize that you are the little black child now unable to reach a decent life. And in that doorway, towering over you and all of us, is our own government (infiltrated by Monsanto), blocking every one of us from farming, from having a country full of small farmers, from local food, from safe food, from clean unpoisoned land, from healthy bees and birds, from normal seeds and trees and animals, available to everyone, and from our democracy.

Instead, we have a government ramping up to create a disease scare (as bird flu is being used in Asia right now) and use Homeland Security to wipe out normal animals stocks and normal seeds at will, and replace them with genetically engineered and patented ones. “Food safety”, “diseases”, “bioterrorism” all part of how the Patriot Act and Bush’s “war on terror” are justified as weapons against us and our civil rights.

This is not just an agricultural issue. It is a civil rights and a human rights issue – the most profound in human history since it is about the right to (normal) nature and survival itself. The totalitarian and corrupt parties discriminating against us all can only be dealt with once we see this as a single issue and come together in a civil rights movement on behalf of us all.

Take action – click {9} to contact your local newspaper or congress people.

Click {10} to see the most recent messages sent to congressional representatives and local newspapers.

Links:

{1} http://www.opednews.com/populum/authorspage.php?sid=10919&entry=&o=y

{2} http://www.opednews.com/articles/Vilsack-may-have-been-put-by-Linn-Cohen-Cole-090121-359.html

{3} http://www.opednews.com/articles/Raids-on-Seeds-life-itsel-by-Linn-Cohen-Cole-081215-45.html

{4} http://www.opednews.com/articles/MONSANTO-investigator-in-by-Linn-Cohen-Cole-090110-871.html

{5} http://www.opednews.com/articles/PASTEURIZATION–PULLING-T-by-Linn-Cohen-Cole-081231-343.html

{6} http://www.newmediaexplorer.org/chris/2008/12/15/raw_milk_farmer_michael_schmidt_slams_criminal_charges.htm

{7} http://www.counterpunch.org/cohen04262008.html

{8} http://en.wikipedia.org/wiki/Tom_Vilsack

{9} http://www.usalone.net/cgi-bin/oen.cgi?qnum=7009

{10} http://www.usalone.net/cgi-bin/transparency.cgi?qnum=oen7009

The views expressed in this article are the sole responsibility of the author
and do not necessarily reflect those of this website or its editors.

http://www.opednews.com/articles/Farming–Why-Obama-s-gove-by-Linn-Cohen-Cole-090125-421.html

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>Seeds – How to Criminalize Them

>by Linn Cohen-Cole

foodfreedom.wordpress.com (March 19 2009)

UPDATE (November 17 2010): Senate votes cloture on S 510 – must now be voted on in sixty days. http://foodfreedom.wordpress.com/2010/11/17/breaking-senate-votes-cloture-on-s-510-must-now-be-voted-on-in-60-days/

Wisdom says stop a bill that is broad as everything yet more vague even than it is broad.

Wisdom says stop a bill that comes with massive penalties but allows no judicial review.

Wisdom says stop a bill with everything unspecified and actually waits til next year for an unspecified “Administrator” to decide what’s what.

Where we come from, that’s called a blank check. Who writes laws like that? “Here, do what you want about whatever you want and here’s some deadly punishments to make it stick”.

Wisdom says know who wrote that bill and be forewarned.

Wisdom says wake up.

Here’s the bill. Let’s use our imaginations and extrapolate from the little bit it reveals and from the reality we know.

SECTION 206. FOOD PRODUCTION FACILITIES.

(a) Authorities – In carrying out the duties of the Administrator and the purposes of this Act, the Administrator shall have the authority, with respect to food production facilities, to –

(1) visit and inspect food production facilities in the United States and in foreign countries to determine if they are operating in compliance with the requirements of the food safety law;

(2) review food safety records as required to be kept by the Administrator under section 210 and for other food safety purposes;

(3) set good practice standards to protect the public and animal health and promote food safety;

(4) conduct monitoring and surveillance of animals, plants, products, or the environment, as appropriate;

(5) collect and maintain information relevant to public health and farm practices.

(b) Inspection of Records – A food production facility shall permit the Administrator upon presentation of appropriate credentials and at reasonable times and in a reasonable manner, to have access to and ability to copy all records maintained by or on behalf of such food production establishment in any format (including paper or electronic) and at any location, that are necessary to assist the Administrator –

(1) to determine whether the food is contaminated, adulterated, or otherwise not in compliance with the food safety law; or

(2) to track the food in commerce.

(c) Regulations – Not later than one year after the date of the enactment of this Act, the Administrator, in consultation with the Secretary of Agriculture and representatives of State departments of agriculture, shall promulgate regulations to establish science-based minimum standards for the safe production of food by food production facilities. Such regulations shall –

(1) consider all relevant hazards, including those occurring naturally,and those that may be unintentionally or intentionally introduced;

(2) require each food production facility to have a written food safety plan that describes the likely hazards and preventive controls implemented to address those hazards;

(3) include with respect to growing, harvesting, sorting, and storage operations, minimum standards related to fertilizer use, nutrients, hygiene, packaging, temperature controls, animal encroachment … and water …

Ah, such a little paragraph, and so much evil packed in it. Notice they mention harvesting, sorting and storage operations? Notice they never mention seeds, but they are precisely what those words cover.

Now, watch how they will be able to easily criminalize seed banking and all holding of seeds. First, to follow how this will be done, you must understand that:

1. There is a small list inside the FDA called “sources of seed contamination” and

2. The FDA has now defined “seed” as food,

3. So seeds can now be controlled through “food safety”.

Those seeds (so far) include:

*seeds eaten raw such as flax, poppy sesame, et cetera;

*sprouting seeds such as wheat, beans, alfalfa, most greens, et cetera;

*seeds pressed into oils such as corn, sunflower, canola, et cetera;

*seeds used as animal feed such as soy …

That includes most seeds. It may even be all seed, given how they are skilled at ‘new’ definitions.

And what are the “sources of seed contamination” per the FDA? They include only six little items:

*agricultural water;

*manure (but not chemical pesticides or fertilizers);

*harvesting;

*transporting equipment;

*seed cleaning (sorting) equipment; and

*seed storage (storing) facilities.

Did you know that seed cleaning equipment is THE single most critical piece of equipment for sustainable agriculture? It is how we collect organic seed. It is the machinery used after the season, when plants “go to seed”, to separate out (sort) the seeds from the plant material so the farmer can collect (harvest) and then save (put in storage) seed for the next year at little cost. With his own seed, the farmer also stays free of patented, genetically engineered, corporately privatized seeds.

This year, 2009, one item on the “sources of seed contamination” list is suddenly illegal in some parts of this country – seed cleaning equipment.

To get the drift, perhaps you need to know that the people who clean seed are being wiped out, as well.

How can they make such vital equipment illegal? Quietly, first of all, so as not to alert organic farmers who have a lot of political ties. And by saying it contaminates food. And by applying their innocent and reasonable sounding “minimum standards”.

“Contaminate” is their favorite word since the public fears the deadly contamination that industry itself – not farmers – has caused. That fear is valuable. Scare the public and it is easy to get “food safety standards” set without anyone reading them. 39 progressive co-sponsors leap on, thinking this is about “food safety”. But it is only about the use of “food safety”, not the reality of it

For to eliminate seed cleaning equipment, the FDA simply sets minimum “food safety” standards for seed cleaning (the simple separation of seed from plant) such that a farmer would need a million to a million and a half dollar building and/or equipment to meet the new requirements … per line of seed.

On the ground, where reality lives, a farmer in the Midwest who has been seed cleaning flax for forty years with his hand made seed cleaner now can’t sell his flax on the market anymore. Never mind there are NO instances of anyone ever having gotten sick from seed cleaning equipment. And a farmer in another part of the Midwest who has been cleaning wheat, corn and soy for years with one single perfectly fine piece of equipment would now need three to four and half million dollars for three separate pieces of equipment, in order to satisfy the “food safety” standards.

The FDA isn’t so high-bar setting when it comes to other things like melamine in baby formula. Though it has proven to sicken and kill infants, initially the FDA just denied the melamine was in all the corporate baby formula but when people found evidence that it was, the FDA then quickly supplied a “food safety” standard that defined whatever level of melamine that was in the formula as fine.

This game playing about “food safety” standards – one to eliminate farmers by setting the bar so high no one can climb, and one to protect industry by setting the bar so low nothing need be done – is nothing new but now it is being suddenly extended to seeds. And it comes with penalties that make bankrupting farmers in an instant, very easy.

The effort to eliminate both seed cleaners and seed cleaning equipment tips us off to who is behind this (shhh) and to this new means of controlling seeds and makes it possible to see just a few suspect words in this bill, and sense where things are heading.

Organic farmers are not aware of any of this happening. It appears the organic community is being treated with kid gloves until HR 875 and related bills should be passed, coddled so they don’t get wise to what’s afoot. And they are too disconnected from traditional farmers to be aware of how the USDA has been tromping on them for years.

So organic farmers have missed the handwriting on the wall for themselves.

Plus, plain ol’ farmers have a history of no one listening to them, which is too bad in general but now it’s blatantly dangerous because it is they who are the ones bringing the warning that these bills are not just bad but deadly. The organic community, lulled by its own seeming safety, hasn’t heard or understood.

But given what just happened with seed cleaning equipment (sorting), the method and the intent are exposed. “Food safety” is the weapon, with public fear, kept at a high pitch, as the driver. After which, those running this game only need to set the bar at a “food safety” level impossible to meet and apply horrendous punishments for not complying. Farmer is either crushed by that pincer move, or quits. Either way, his land is up for grabs.

And those severe punishments are essential to control groups which will see the whole thing for what it is – insane in terms of farming and anything to do with health, a threat to survival, and driven solely by profit and power.

So, one crucial piece of equipment (seed cleaning) is illegal now and without most people realizing. And simply because a single “foods safety” bar has been raised.

In time, as more and more farmers are forbidden from using their equipment, significant sources of organic seeds will begin to dry up, at which point the organic community would begin to ask what was going on. By then, it will be too late.

Why? Because look at the last item on the list – (seed) storing facilities.

Farmers, gardeners, seed saving exchanges, seed companies, scientific seed projects, and seed banks, all require sorting. All are working overtime to protect biodiversity that is rapidly disappearing specifically because of genetic engineering. As Monsanto began reducing access to seeds, people around the world have worked hard to compensate.

But now the effort is to take over the whole game, going after even these small sources of biodiversity – by simply defining seeds as food and then all farmers’ affordable mechanisms for harvesting (collecting), sorting (seed cleaning) and storing (seed banking or saving) as too dirty to be safe for food.

Set the standard for “food safety” and certification high enough that no one can afford it and punish anyone who tries to save seed in ways that have worked fine for thousands of years, with a million dollar a day fine and/or ten years in prison, and presto, you have just criminalized seed banking.

The penalties are tremendous, the better to protect us from nothing dangerous whatsoever, but to make monopoly over seed absolutely absolute. One is left with control over farmers, an end to seed exchanges, an end to organic seed companies, an end to university programs developing nice normal hybrids, and an end to democracy – reducing us to abject dependence on corporations for food and gratitude even for genetically engineered food and at any price.

When you know that Monsanto with the help of the US government plundered ancient and rare seed banks in Iraq that held seeds with a genetic heritage (a biohistory belonging to all of us) going back thousands of years and then made it a crime for farmers there to collect or use their own normal and non-patented seeds off their own land, you see how extreme the intent to control is.

Now, perhaps it is possible to see how the identical thing is being done here, only it comes in a heavily disguised way – through “food safety” that isn’t “food safety” at all – and quietly sits in only one tiny little paragraph within a very large bill (and with no reference to seeds at all).

The Iraqis are now utterly at the mercy of Monsanto and the US for survival itself and will have to pay whatever prices are set for food. They can no longer just grow their own and be free people. So, no matter what form of government they may ever have, as long as this is true, they are now enslaved because the control over them is that extreme. Kissinger was right – control food and you control people.

We are inches from this ourselves. The Left needs to wake up.

In Afghanistan, people are buying and planting beans from America which at the end of the season have nothing whatever inside, the pods are empty. In Ecuador, the potatoes do not develop eyes so can’t be planted next season to grow more potatoes.

Biotech’s claim to care about feeding starving multitudes is belied by its blocking human access to normal seeds and its terminator technology (empty beans). Monopoly is monopoly is monopoly. And at this level, and when it comes to seeds which are life itself, monopoly terminates democracy as well as beans.

This trick of setting bars above any ability to be in the game was done to blacks and in realizing this, we must hold Obama accountable for pushing these bills which are profound civil and human rights abuses.

Click here: http://www.opednews.com/articles/Farming–Why-Obama-s-gove-by-Linn-Cohen-Cole-090125-421.html

There are three other items of the list which surely will be controlled as well. In toto, that little list of six items (agricultural water, manure, harvesting, transporting and seed cleaning equipment, and seed storage facilities) contains the pieces to deconstruct farming itself, especially organic farming.

http://foodfreedom.wordpress.com/2009/06/13/seeds-how-to-criminalize-them/

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>US Planning to Outlaw …

>… Gardening and Saving Seeds

Senate Bill S 510 Food Safety Modernization Act vote imminent: Would outlaw gardening and saving seeds.

by Mike Adams, NaturalNews Editor

naturalnews.com (November 16 2010)

Senate Bill 510, the Food Safety Modernization Act, has been called “the most dangerous bill in the history of the United States of America”. It would grant the US government new authority over the public’s right to grow, trade and transport any foods. This would give Big Brother the power to regulate the tomato plants in your backyard. It would grant them the power to arrest and imprison people selling cucumbers at farmer’s markets. It would criminalize the transporting of organic produce if you don’t comply with the authoritarian rules of the federal government {1}.

It will become the most offensive authority {2} against the cultivation, trade and consumption of food {3} and agricultural products of one’s choice. It will be unconstitutional and contrary to natural law or, if you like, the will of God.

– Dr Shiv Chopra {4}, Canada Health whistleblower {5}

This tyrannical law puts all food production {6} (yes, even food produced in your own garden) under the authority of the Department of Homeland Security. Yep – the very same people running the TSA and its naked body scanner cum passenger groping programs.

This law would also give the US government the power {7} to arrest any backyard food producer as a felon (a “smuggler”) for merely growing lettuce and selling it at a local farmer’s market.

It also sells out US sovereignty over our own food supply {8} by ceding to the authority of both the World Trade Organization (WTO) and Codex Alimentarius.

It would criminalize seed saving {9}, turning backyard gardeners who save heirloom seeds into common criminals. This is obviously designed to give corporations {10} like Monsanto a monopoly {11} over seeds.

It would create an unreasonable paperwork burden that would put small food producers out of business, resulting in more power over the food supply shifting to large multinational corporations.

I encourage you to read more about this dangerous bill at the Food Freedom blog on WordPress {12}.

Watch this excellent video {13} on NaturalNews.TV which explains S.510 in more detail.

Take action now or lose your right to grow your own food

Sign this petition at Citizens for Health:
http://www.citizens.org/?page_id=2312

Do it today! This is really important.

In addition, the Cornucopia Institute recently sent out an urgent call-to-action email containing the following information {14}.

How to protest Senate {15} Bill 510

1. Go to Congress.org and type in your zip code in the box in the upper right hand corner.

2. Click on your Senator’s name, and then on the contact tab for their phone number. You can also call the Capitol Switchboard and ask to be directly connected to your Senator’s office: 202-224-3121.

3. Once connected ask to speak to the legislative staff person responsible for agriculture. If they are unavailable leave a voice mail message. Be sure to include your name and phone number.

Give them this message in support of the “Tester Amendment” which would exempt small farms from S.510:

I am a constituent of Senator (his or her name). I ask that he/she support the Tester Amendment to the food safety {16} bill. The Tester Amendment will exempt the safest, small, owner-operator farms and food facilities and farmers who direct market their products to consumers, stores or restaurants. Food safety {17} legislation should not create inappropriate and costly regulatory barriers to family farms {18} and the growing healthy food movement in the drive to crack down on corporate bad actors. Please support the Tester Amendment and market opportunities for small and mid-sized family farms, and small food processing facilities.

You may also wish to explain that you oppose the Food Safety Modernization Act in its entirety, and it is a destructive, freedom-crushing law that will destroy the future of food in America {19}.

Remember, America has already lost control over its money supply to the Federal Reserve (nearly a hundred years ago). America has lost its health {20} due to the medical industry and its profit-from-sickness agenda. Now we may lose our right to grow our own food and save our own seeds if Senate Bill 510 passes.

This is a dangerous, tyrannical law that would thrust the American people into an age of darkness and malnutrition. It would criminalize many of the very people growing our food and turn food production into yet another corporate monopoly.

Please take the time right now to contact your US Senator and voice your strong opposition to this bill.

Links:

{1} http://www.naturalnews.com/government.html

{2} http://www.naturalnews.com/authority.html

{3} http://www.naturalnews.com/food.html

{4} http://www.naturalnews.com/Chopra.html

{5} http://shivchopra.com/?page_id=2

{6} http://www.naturalnews.com/food_production.html

{7} http://www.naturalnews.com/power.html

{8} http://www.naturalnews.com/food_supply.html

{9} http://foodfreedom.wordpress.com/2009/06/13/seeds-how-to-criminalize-them/

{10} http://www.naturalnews.com/corporations.html

{11} http://www.naturalnews.com/monopoly.html

{12} http://foodfreedom.wordpress.com/2009/06/13/seeds-how-to-criminalize-them/

{13} http://naturalnews.tv/v.asp?v=9209B7B02D4A5A8EA8B71038D6C18D26

{14} http://www.cornucopia.org/2010/11/action-alert-act-by-nov-17-on-senate-food-
safety-legislation/

{15} http://www.naturalnews.com/Senate.html

{16} http://www.naturalnews.com/food_safety.html

{17} http://www.naturalnews.com/safety.html

{18} http://www.naturalnews.com/family_farms.html

{19} http://www.naturalnews.com/America.html

{20} http://www.naturalnews.com/health.html

http://www.naturalnews.com/030418_Food_Safety_Modernization_Act_seeds.html

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>Investors Put Money on Lawsuits …

>… to Get Payouts

by Binyamin Appelbaum

The New York Times (November 14 2010)

Large banks, hedge funds and private investors hungry for new and lucrative opportunities are bankrolling other people’s lawsuits, pumping hundreds of millions of dollars into medical malpractice claims, divorce battles and class actions against corporations – all in the hope of sharing in the potential winnings.

The loans are propelling large and prominent cases. Lenders including Counsel Financial, a Buffalo company financed by Citigroup, provided $35 million for the lawsuits brought by ground zero workers that were settled tentatively in June for $712.5 million. The lenders earned about $11 million.

Most investments are in the smaller cases that fill court dockets. Ardec Funding, a New York lender backed by a hedge fund, lent $45,000 in June to a Manhattan lawyer hired by the parents of a baby brain-damaged at birth. The lawyer hired two doctors, a physical therapist and an economist to testify at a July trial. The jury ordered the delivering doctor and hospital to pay the baby $510,000. Ardec is collecting interest at an annual rate of 24 percent, or $900 a month, until the award is paid.

Total investments in lawsuits at any given time now exceed $1 billion, several industry participants estimated. Although no figures are available on the number of lawsuits supported by lenders, public records from one state, New York, show that over the last decade, more than 250 law firms borrowed on pending cases, often repeatedly.

The rise of lending to plaintiffs and their lawyers is a result of the high cost of litigation. Pursuing a civil action in federal court costs an average of $15,000, the Federal Judicial Center reported last year. Cases involving scientific evidence, like medical malpractice claims, often cost more than $100,000. Some people cannot afford to pursue claims; others are overwhelmed by corporate defendants with deeper pockets.

A review by The New York Times and the Center for Public Integrity shows that the inflow of money is giving more people a day in court and arming them with well-paid experts and elaborate evidence. It is helping to ensure that cases are decided by merit rather than resources, echoing and expanding a shift a century ago when lawyers started fronting money for clients’ lawsuits.

But the review shows that borrowed money also is fueling abuses, including cases initiated and controlled by investors. A Florida judge in December ordered an investment banker who orchestrated a shareholder lawsuit against Fresh Del Monte Produce to repay the company’s legal expenses, ruling that the case should not have reached trial.

Such financing also drains money from plaintiffs. Interest rates on lawsuit loans generally exceed fifteen percent a year, and most states allow lawyers that borrow to bill clients for the interest payments. The cost can exceed the benefits of winning. A woman injured in a 1995 car accident outside Philadelphia borrowed money for a suit, as did her lawyer. By the time she won $169,125 in 2003, the lenders were owed $221,000.

Lawyers are not required to tell clients that they have borrowed money, so the client may be unaware that there is financial pressure to resolve cases quickly. Lenders also seek detailed information about cases, which can jeopardize client confidentiality. A federal judge in Delaware ruled in June that a company suing Facebook for patent infringement had to show Facebook documents that its lawyer had shared with a lender.

Citing these issues, critics of lending for lawsuits say the practice should be banned.

“It sends shivers down the spines of general counsels all across the globe”, said Lisa A Rickard of the Institute for Legal Reform, an arm of the United States Chamber of Commerce.

But proponents, who argue that people often need help to fight corporations, have won a series of victories in state courts and legislatures in recent years, overturning old laws that prohibited investments in lawsuits.

“If you want to use the civil justice system, you have to have money”, said Alan Zimmerman, who founded one of the first litigation finance companies in 1994, in San Francisco, now called the LawFinance Group. “If there’s less money, you’d have less litigation. But then you’d also have less justice”.

A Case in Point

A legal battle between residents of a faded Texas factory town and the BNSF Railway, the nation’s second-largest railroad company, highlights what some see as the benefits and others see as the excesses of lawsuits driven by borrowed money.

Somerville, Texas, eighty miles northwest of Houston, has hosted the noxious work of treating wood to make railroad ties for more than a century. The railroad runs through the town, dividing a small grid of residential streets from the lumber yard and treatment plant where stacks of wood are soaked in preservatives.

Dennis L Krueger crossed the tracks to begin work at the factory the week after he graduated from the local high school, in 1974. Three decades later, he was found to have a malignant skin cancer that his doctor said was most likely caused by prolonged exposure to creosote, the tar oil in which the ties are soaked.

Mr Krueger, who is 54 but looks much older, reduced by manual labor and medical treatment, is suing the railroad for damages, claiming that BNSF failed to provide basic safety equipment or to warn workers that the federal government had linked creosote with skin cancer. He recalled cleaning the inside of the treatment tanks wearing no safety gear except steel-toed boots and mule-skin gloves.

“I got so high off that stuff I’d be laughing one minute and crying the next minute”, said Mr Krueger, sitting at the local Dairy Queen beneath old photographs of factory workers. “I’ve got a two-year-old grandson. My goal was to live to 101. What I’d like is a fair shake from the railroad for missing out.”

Mr Krueger’s lawsuit is financed by investors he has never met. His lawyer from Houston, Jared R Woodfill, has borrowed more than $3.5 million from a New York hedge fund run by Stillwater Capital Partners, in a deal arranged by the litigation finance specialist Oxbridge Financial Group, also based in New York.

Mr Woodfill first drove to Somerville in 2000 to meet with a former factory worker who has since died of skin cancer. He said that his work on that worker’s case, which BNSF agreed to settle in 2003, convinced him that toxic emissions from the factory had poisoned the town’s air, water and land.

Mr Woodfill, who is 42 and the chairman of the Republican Party in Harris County, is empathetic and well-spoken. He found a ready audience in Somerville, which has declined with the railroad industry. The population peaked in the 1930s. About 1,700 people still live in the timeworn residential section, but automation has further reduced employment at the factory, and a quarter of the households now live in poverty. Residents with a wide range of health problems embraced the idea that the factory was responsible.

Mr Woodfill signed up workers with skin cancer, like Mr Krueger, and those with gastrointestinal cancers that he says can be caused by the chemicals used at the factory. He also signed up Somerville residents who never worked at the factory but had developed cancers. And he signed up property owners with no health problems, arguing that the value of their property had suffered.

About 400 people sued the railroad – almost a quarter of the town’s residents.

Oxbridge spent several months reviewing the cases before agreeing to arrange the financing, sending lawyers to Texas to look at documents and to question Mr Woodfill and his partners. Stillwater Capital is charging about sixteen percent annual interest.

“But for a hedge fund, I couldn’t afford to take on a railroad”, Mr Woodfill said.

BNSF’s general counsel, Charles Shewmake, said the company had carefully reviewed claims brought by its former workers and decided they had no merit. He said the claims by Somerville residents who did not work at the factory were “physically impossible and without any scientific basis”.

Company executives were outraged when they learned that a hedge fund was backing the lawsuits, Mr Shewmake said. He said that BNSF had been forced to spend millions of dollars mounting its courtroom defense and defending its reputation.

“They’re stirring up cases that don’t need to be in the courthouses”, he said.

An Opportunity for Lenders

Lawsuit lending is a child of the subprime revolution, the mainstream embrace of high-risk lending at high interest rates that began in the early 1990s.

Mr Zimmerman, the founder of the LawFinance Group, practiced law for more than two decades before moving into finance in California in 1992. A lawyer friend called to ask if he would lend to a client who had won a sexual harassment lawsuit. The woman’s former employer had appealed, and she needed money for living expenses or she would be forced to take a smaller settlement.

Mr Zimmerman invested $30,000 in the case; the former employer almost immediately dropped the appeal and paid out the verdict. Mr Zimmerman made $20,000.

“I said: ‘That’s an interesting way to make money. Is there a way to turn that into a business?’ ” he recalled. The company he created has since invested more than $350 million in litigation.

Others in the lending business saw the same opportunity at about the same time, including a mortgage salesman in Buffalo; a subprime auto lender from Nashville; and a Las Vegas man who had been convicted of threatening borrowers who failed to repay his previous business, Wild West Funding.

By the late 1990s, several of those companies were also making loans to lawyers. Plaintiffs needed small sums for living expenses; their lawyers needed much larger sums to mount cases, and they had few other options. Banks make loans against assets, and law firms generally have little property to pledge as collateral.

The new lenders jumped into the void. LawFinance’s slogan is “We do what banks won’t”.

The industry’s great innovation, and still its defining trait, is the willingness to lend based on the potential value of unresolved cases.

The roughly one dozen major lenders tend to cultivate an image of conservative prudence. Counsel Financial, which bills itself as the largest, with more than $200 million in outstanding loans to law firms, shares a suburban office building outside Buffalo with an insurance firm.

But the work sits somewhere between banking and gambling. Lenders employ experienced lawyers to judge the strength of cases. They consult databases showing the results of similar lawsuits, just as appraisers value homes based on recent sales. A corporate defendant may have a history of battling personal injury claims; or juries in a specific county may have a history of siding with local employers. Then they place their bets. Counsel will invest up to $10 million in a law firm.

The returns can be lucrative. Counsel Financial charges eighteen percent annual interest. “If firms have access to lower-cost financing, our first comment back to them is that you really shouldn’t be talking to us”, said Paul R Cody, president of Counsel Financial. “We’re not going to be competitive” with the interest rates charged by banks.

Law firms are generally obligated to repay loans even if they lose. In reality, however, firms that make less than expected often struggle to make the required payments, and a number of firms that borrowed from Counsel Financial have filed for bankruptcy protection.

Increasingly, banks are making lawsuit loans, too. During the lending boom of the last decade, companies including Citigroup, Commerce Bank of New Jersey and Credit Suisse provided financing for lawsuit lenders. More recently, some banks have started cutting out the middlemen. Deutsche Bank recently refinanced one of Counsel’s largest clients, the New York firm Napoli Bern Ripka. TD Bank, which absorbed Commerce, lends to lawyers and plaintiffs.

The founders of LawCash, a Brooklyn lender, won a charter from New York in 2006 to establish Esquire Bank, the first American bank to specialize in the business of financing lawyers and lawsuits.

Defendants on the Defensive

A recent Nevada case illustrates one reason many companies are troubled by the rise of financing: They fear that investors will move from supporting to producing lawsuits.

Steven and Roz Flans left Los Angeles in 2004 for Sun City Anthem, a sprawling retirement community of 7,000 one-story homes, from ranches to mansions, at the edge of the Las Vegas basin. When the gas fireplace stopped working during their third winter in the desert, the couple contacted their home builder, Del Webb.

“We called and said, ‘We have a minor problem’, ” Mr Flans recalled. “And they said: ‘We can’t talk to you. You’re suing us!’ “

It emerged that the Flanses had accepted a free home inspection the previous year from a company, MC Mojave Construction, that had papered their neighborhood with brochures. They said they did not realize that the forms they signed authorized MC Mojave to sue Del Webb on their behalf for the money to correct any problems.

By 2008, MC Mojave had initiated more than 500 lawsuits against Del Webb. The company acted as an investor, providing inspection reports to the Las Vegas law firm that handled the cases in exchange for a share of any winnings.

Del Webb sued MC Mojave, arguing that Nevada law prohibited fomenting and investing in lawsuits. Jacque Petroulakis, a company spokeswoman, said that Del Webb would have fixed legitimate problems under its warranty policy, and that the lawsuits served solely to make money for MC Mojave and the law firm.

“They were throwing people into litigation that many of them never anticipated or wanted”, Ms Petroulakis said.

MC Mojave did not return calls for comment, but in court filings, it called the Nevada law “medieval” and said it should not be enforced. The company said it was providing a service at the request of the homeowners.

This year, a federal judge barred MC Mojave from initiating further lawsuits, ruling that Nevada law indeed prohibits such investments.

But a growing number of states have eliminated similar laws.

The Massachusetts Supreme Judicial Court started the trend in 1997, citing a “fundamental change in society’s view of litigation – from a social ill, which, like other disputes and quarrels, should be minimized, to a socially useful way to resolve disputes”.

South Carolina, Texas and Ohio are among the states that have followed.

Stephen C Yeazell, a law professor at the University of California, Los Angeles, and a leading historian of the civil justice system, said the trend was likely to continue. He said there was little legal justification for allowing lawyers to pay for cases but barring third parties from doing so. “This is another step in leveling the playing field between plaintiffs and defendants”, Mr Yeazell said.

Gathering Plaintiffs

Anthony Flammia, a former New York City police officer who spent three months working in the wreckage of the World Trade Center, did not learn that his lawyers had borrowed money to pursue his claim of compensation for health problems until he received a bill for $828.93 in interest charges.

Mr Flammia left ground zero at the end of 2001 for a job with a suburban police department. A few years later, a passer-by found him asleep in his patrol car. His health had been deteriorating, and the episode prompted him to visit a free clinic established to treat ground zero workers for the consequences of inhaling dust. He was found to have sleep apnea and scarring in his lungs. In 2007, he passed out after inhaling smoke at a house fire and was forced to retire.

Lawyers led by Napoli Bern Ripka sued the City of New York and a host of agencies and companies on behalf of more than 9,000 ground zero workers. When Mr Flammia signed up as a client, the paperwork included a general notice that the lawyers might borrow money to pursue the case, and that they might bill clients for the interest.

Mr Flammia said he did not see the general warning, and there was no further notice as the lawyers borrowed more than $35 million.

In June, the city and other defendants agreed to settle the case for up to $712.5 million. The workers have until Tuesday to approve the settlement. Workers received letters detailing how much they would receive, and how much the lawyers would keep to cover the costs of pursuing the case.

Among the costs billed to clients was $6.1 million of the $11 million in total interest payments, which the law firms said reflected the share of the borrowed money covering the workers’ expenses.

Lawsuit lenders, including Counsel Financial, encourage lawyers to bill clients. They advertise in trade magazines that lawyers can borrow money free if the client is paying the interest. Bar associations in most states, including New York, condone the practice.

Paul J Napoli, one of the lead lawyers representing the ground zero workers, said that the firm needed money to pursue the case, that the loans were taken at the lowest available interest rates and that clients were properly notified.

“We followed the rules. Do people want to have it sky-written over their house every day?” Mr Napoli asked. “They didn’t read it. Or maybe they didn’t care at the time. At what point do people have a self-responsibility to read something and be bound by it?”

But Mr Flammia and other workers said they had not agreed that the law firm could pay for its work by borrowing money at their expense.

“If I’m ever involved in a lawsuit again, I’m going to be very careful and read every document line by line”, Mr Flammia said. “I’m also going to find a lawyer who is acting on my behalf and not to line their own pockets”.

The judge overseeing the case, Alvin K Hellerstein of the Federal District Court of Manhattan, ordered the lawyers to swallow the cost.

Judge Hellerstein acknowledged that the charges were legal, but said that the lawyers already were earning enough from the case. He said that it was not clear that clients had understood or approved the decision to borrow, and that it was clear that clients had no control over how the money was spent.

The workers, Judge Hellerstein said, “want to have the fruits of this settlement not diminished by an effort of lawyers to finance much of the way that they work this case”.

A War of Attrition

The residents of Somerville, Texas, have yet to win a trial.

The case of Linda Faust, who never worked at the railroad plant, was the first to reach court, in 2008. She had stomach cancer.

The jury deliberated three days before deciding that BNSF was not responsible.

The following year, a jury ruled against Dennis Davis, a former worker at the factory with pancreatic cancer.

Mr Woodfill’s nine-lawyer firm, Woodfill & Pressler, has spent more on the Somerville cases than any of its previous litigation. Win or lose, it must repay Stillwater, the hedge fund that is bankrolling the cases. Mr Woodfill said he remained confident that the cases could be won. He is appealing the two losses and preparing for a third trial next year.

He drove through Somerville recently on his way to meet with clients, rolling down the windows so the smell of the factory came into the car. “They’re hoping to spend us into the ground and make us go away, but we’re not giving up”, he said.

Mr Shewmake of BNSF said the company was braced to continue fighting the cases until Stillwater ran out of patience.

“Right now”, he said, “I’d say it’s starting to look like a bad investment decision”.

_____

This project was initiated by the Center for Public Integrity, a nonprofit investigative news organization in Washington. It is based on reporting by Ben Hallman of the center and Binyamin Appelbaum of The Times, and was written by Mr Appelbaum.

http://www.nytimes.com/2010/11/15/business/15lawsuit.html?_r=1&ref=binyamin_appelbaum

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>But what is "Community"?

>by Dmitry Orlov

Club Orlov (November 21 2010)

This is another guest post from Yevgeny, which he wrote in response to my article “How (not) to Organize a Community” {1} . He poses what, to a Russian, seems an obvious question:

How (not) to organize a WHAT?

You see, upon close examination the English word “community” turns out to be all but meaningless. English speakers all assume that they know what they are talking about when they say it, but a Russian speaker who tries to translate it ends up with the following list: “society, union, locality, district, hostel, state, population, residents, communal ownership”. One begins to suspect that “community” is just a pompous and self-important way of saying “people”, just as American nannies (sorry, “daycare specialists”) refer to the little sprogs in their charge as “doing activities”, instead of “playing games” as normal, non-robotic children do. How did I manage to lose sight of this? “It’s because you listen to idiots”, says my wife. In any case, it is good of Yevgeny to reel me back in.

Update: Looks like we ruffled some feathers {2} in the Transition Towns neck of the woods. Here I am doing my best to bring to you stories of real survival by real Russians (so you don’t have to limp along with your hackneyed Mad Max/Waterworld cliches), and for that I am painted as being part of an “apocalyptic cult” that rejects the sacred idea of “komyooniti!” This, they say, is a “direct assault on the optimism of people who accept peak oil!” I am happy to be able to assure you that this is all complete nonsense. Jean, who attended my talk in Lincoln, Massachusetts last week, wrote this: “I found you very reassuring in your reminding me that despite all the upcoming disaster life will go on; perhaps not as we would like but then perhaps not so bad either. Somehow I had lost track of that. It may not be the life we’re familiar with but then it might be a better life too.”

I read your article about differences in “komyooniti”. Let me ask you as a linguist, what’s the most adequate Russian word for it?

It’s been hammered into my head that the most important things are food, a roof over your head, security and mobility – the first two especially, and everything else is just there to tempt you. And it seems that the best way to procure food is not to take it away or steal it or buy it, but to grow it and to guard it, because there are always people to guard it from. That is, to be close to food. And when the local industrial agriculture kicks the bucket and the food will stop being delivered to the cities, won’t the residents of backward little villages be the winners? You can imagine gangster raids into rural places, rifling through barns and fields, and forcing people to pay a tribute, as in feudal times – but that’s only if they find enough fuel to get there and back.

I know that no matter what economic or political regime prevails, my Russian village kin will survive, provided they hold on to their land and provided climate change doesn’t kill off all the flora and fauna around them. I believe that the Russian, conditioned by centuries of serfdom, the GULAG and the entire Soviet experience, is a very hardy beast, in spite of alcoholism, drug abuse and moral decay. Also, as a child of the industrial ghetto, I entirely agree that the underclass is better-prepared. Our city is a smelly, dusty port city, industrialized in the extreme. It is inhabited by exasperated, embittered, bloody-minded people. Mothers often have to bring up children by themselves because the husbands spend half the year out on the sea. The merchant marine offers about the only way to rise above poverty. The criminal element is prosperous and well-organized, just as it should be in a port city. Every child knows the names of the celebrated local criminals (the so-called “authorities”), including the legendary ones, who perished in the maelstrom of the 1990s. The little children play at Cosa Nostra and go around mugging people. Every one of them belongs to a neighborhood or even a specific courtyard. Sometimes there are wars between kids from different apartment buildings. The most important question in any meeting, during any time of day or night, is “What neighborhood are you from?” If you are unlucky enough to be from the wrong neighborhood, you might still have a straw to grasp if you know one of the local criminal “authorities”. If you decide to get the police involved, then you are in for some additional, official abuse. Smart people don’t stray outside their territory in places where they don’t know anyone. Children know who lives where and who would mug them, and keep out. The parents aren’t particularly concerned about the safety of their children, and the children are quick enough to learn what they need: how to break noses, how to be on guard, how to talk like a gangster, how to spot easy marks for grabbing a cell phone or a wallet, how to be a street-fighter. They start from about age seven, as soon as they start going to school. This all happens quite spontaneously, without any conspiracy. This is how it will always be in my city. It’s not a pleasant way to live, but it is survivable.

I have already lived through some of the experiences mentioned in Reinventing Collapse (2008). Some of my friends took the crooked path in childhood, some have done time, some more than once. But I was certain that they won’t touch me, or let anyone else touch me. On quite a few occasions they saved my skin and even helped me out with money. Some have lived with me, some I’ve sheltered from police: they are “our people” and the police are “the enemy” – along with the rest of the government, and we must defend “our people” from them.

None of this was the case in my father’s village. There were plenty of alcoholics and drug addicts, but everyone was “our people”, and so there was no-one to fight. If any one of them got assaulted, the entire village would be out looking for the offender. Theoretically, a misbehaving stranger could get his comeuppance right there and then, but in fact street crime was all but nonexistent. Bicycles would get stolen, but that is about it.

The people there are a gregarious lot. At all the weddings, funerals, army send-offs, birthdays, anniversaries the house is full of people, there is a ton of food, and plenty of singing and dancing. Everybody has their own domestic food source, and, of course, everyone brews their own alcohol. All passers-by say hello to each other, even if they don’t know each other. Friends and neighbors are treated as part of the family. Russians don’t use the word “cousin” – everybody is just a brother or a sister – and that says a lot about our culture. In that village, I have so many brothers, sisters, nieces and nephews, uncles and aunts, grandfathers and grandmothers that in every tenth house they are happy to receive me. Growing up, I was bored there, and was attracted by the excitement of the concrete jungle in the city. But village was real life, the way life should be.

My father’s family did not live on this land for centuries. They migrated from the hungry Urals to the fertile Kuban in the 1940s. But nothing held them back from becoming “our people” in just one generation. My grandfather had so many brothers and sisters that the village was a sort of clan – a very large family. Everybody was either related, or friends, or friends of friends, and so everybody could always find a sympathetic policeman, inspector, doctor, teacher, social worker, military representative and so on. All business was transacted in this way only: through acquaintances, which is the one and only guarantee of helpful and excellent service.

The black market flourished to such an extent that nobody depended on official employment or deliveries to stores. Many men fished illegally, and having connections at the Fisheries Service helped a lot. Everyone had kitchen gardens, chicken coops, cattle, pigs. We bought salt at the government store, and bread, although my grandmother could bake the bread just as well herself. But the most pleasant part of the black market is, of course, controlled substances. Dear reader, why do you think it is that Russia lags behind Luxembourg, Switzerland and the Czech Republic in per capita consumption of alcohol? Well, that’s because actual alcohol consumption in Russia is incalculable. To say that not all of what Russians drink is purchased at a store is to say nothing. Black market alcohol manufacturing and distribution thrives in Russia as nowhere else. Superpower politicians seem to have poor memory for history. Everyone knows how the Prohibition in the USA gave rise to powerful criminal syndicates and enriched the Kennedy clan. Well, on May 17 1985 Gorbachev passed a “dry law” which proved catastrophic for the Soviet economy. Black market production blossomed and thrived right through the 1990s. Before that law, profits from the sale of alcohol made up 25 to thirty percent of the state budget of the USSR, and so Gorbachev’s decision was quite possibly the last nail in the Soviet regime’s coffin.

As far as transportation, the busiest street in the village saw maybe one car a minute during the busiest part of the day, and so the air was very clean. At night the village and the surrounding farms turned dark and quiet. But even this small village was served by buses from different directions, and the drivers of these buses could be asked to stop at any house. My uncle drove one such bus, and so on special occasions our family had the bus to ourselves, to go on a mass excursion somewhere – at government expense, of course! (Everyone knew of this, and nobody was opposed.)

The level of poverty sometimes looked quite frightening, but there was something about it that provided a sense of safety and security. I remember watching news reports of street demonstrations in Moscow in 1991: a crowd chanting “Yeltsin is a traitor” marches menacingly toward a line of riot police, and a melee ensues. But we couldn’t care less, because none of this had any effect on us. We were poor under the Soviets, and we were poor afterward, but we stuck together. Whenever we need to marry one of us, bury one of us, get one of us a government job, a solution always presented itself. Family celebrations never involve just the nuclear family. The house is always open, the food is brought in by the guests, and there is always a musician or two present, because after eating and drinking Russians like to sing. At moments like this you can forget that you are living in a third world country and that life is really hard. Saturday is sauna day – another excuse to receive guests, since a sauna relaxes and predisposes to conversation. These are the simple ingredients that make up a real society: Family, Clan, Home – where you feel safe in any situation.

It seems to me that Russia and other former Eastern Block countries have already gone through hell and are now on the way to recovery, while the USA and other formerly rich countries are yet to go through this hell, and nobody knows what it will look like. The take-home point is simple: to survive in a third world country, you have to know who your people are, and who are the strangers. The more of your people there are, the better, but it is absolutely unacceptable if everyone beyond the confines of your family nest is a stranger. Then there is simply no chance that you will survive.

Links:

{1} http://cluborlov.blogspot.com/2010/10/how-not-to-to-organize-community.html

{2} http://energybulletin.net/stories/2010-11-23/peak-oil-risks-becoming-apocalyptic-cult

http://cluborlov.blogspot.com/2010/11/but-what-is-community.html

Bill Totten http://www.ashisuto.co.jp/english/

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