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Ponzi grain scheme shocks, shakes Mo. farmers

>What was once synonymous with Enron and Wall Street tycoon Bernie Madoff has trickled into the agriculture industry of a rural Missouri town. Cathy Gieseker was arrested in Martinsburg (pop. 330) last month, charged with stealing as much as $50 million from 180 farmers in a grain-buying pyramid scheme, Phillip O’Connor reports for the St. Louis Post-Dispatch. (Encarta map)

T.J. Gieseker Farms and Trucking became one of the largest grain shippers in Missouri when the Ponzi scheme reached its peak in early 2009. In eight months, investigators say Gieseker's accounts payable rose from $13 million to at least $27 million. An excerpt from the federal indictment outlines the timeline: Gieseker began marketing grain in 2002, offering farmers up to double the price that they could receive in the spot market. Gieseker claimed she could pay higher prices because she had grain contracts with Archer Daniels Midland, when in fact, she did not. Instead, she sold almost all her grain at the spot market price.

Despite the allegations, there are mixed feelings about Gieseker, who grew up in the area 100 miles northwest of St. Louis, and served on the local school board. Some, like farmer and native Steve Hobbs, just want answers. "Now people can maybe get some facts," he said. "There's already been plenty of speculation." But other residents and industry advocate groups are less understanding. Linus Rothermich (above, center) sold Gieseker almost his entire crop last year, only to be forced to take out loan just to continue farming. Missouri Agriculture Department head John Hagler told O’Connor, "This is a sad day for agriculture.” (Read more)

Appalachian coal piles up for lack of buyers, depressing prices; Massey looks to exports

In a dramatic shift from last year, coal mines in Central Appalachia are suffering from a surplus of their product. It is being piled along roads and waiting for buyers and renegotiated contracts. Rebecca Smith and Kris Maher of the Wall Street Journal report that several coal and utility companies are already feeling the effect of decreased demand, anticipating as much as a 20 percent drop in sales by the end of 2009. "Unfortunately, coal has suffered the full brunt of this economic recession," said Steve Leer, CEO of Arch Coal Inc., the nation’s second-largest coal operator. Arch has delayed shipments and joined the likes of American Electric Power Co. and steelmaker ArcelorMittal in renegotiating contracts, the Journal reports.

Matt Preston of the energy consultant group Wood Mackenzie told teh Journal that most current coal prices hover between $45 and $50 per ton compared to $175 a ton during the peak of last year’s coal boom, but in Central Appalachia, where coal is deeper and mining it is more labor intensive, most producers need at least $70 to $80 a ton to operate. (Read more)

Tim Huber of The Associated Press reported, "The chief executive of mine operator Consol Energy said Thursday rival producers are contributing to a glut of coal on the market by building stockpiles despite dropping demand for electricity. Power plants have enough coal on hand to operate for about 45 days, up from about 25 days a year ago, but some have up to 80 days' worth of supply, Brett Harvey said." The company said it plans to cut production more than planned. (Read more) However, Massey Energy CEO Don Blankenship told analysts last week that his company, the leading one in Central Appalachia, "sees opportunities to export more coal to Europe and Asia as global steel production and power generation are starting to pick up," Reuters reported.

Excellent E. Ky. school district overcomes odds

Eastern Kentucky remains one of the nation's poorest and most rural regions, still struggling to develop its economy beyond coal. There are competing visions of that, but those on both sides "agree on at least one thing: education is central," John James Snidow writes for the Institute for Rural Journalism and Community Issues.

"Almost every county school district in the state’s eastern coalfield has test scores below the state average, and the region has Kentucky’s lowest share of high-school graduates," Snidow notes. But knowledgeable leaders in education and politics "point to an exception that gives them hope for the region:" the schools in Johnson County. (Encarta map)

"Johnson Central Elementary has the second-highest test scores in the state; U.S. News and World Report named the high school one of America’s best last year; and the county’s academic teams have dominated state competition for years," Snidow reports. "The teams are the New York Yankees of academic competition in Kentucky: not just well-trophied, but well-funded."

Academic-team coaches get the same pay for extra work as top athletic coaches. "That made people think, ‘Well, academics must be important to the folks in Johnson County’," Supt. Steve Trimble, right, told Snidow. (Read his commentary on Trimble.) Keys to excellence, Trimble says, are strong leadership, valuing academics and keeping bad teachers out of classrooms.

Snidow's story also notes efforts to improve instruction in science, technology, engineering and mathematics, "which are called STEM subjects to signify their collective importance in an information economy." (Read more)

House passes bill to improve food safety after making it more palatable to farm lobbies

"The House approved the first major changes to food-safety laws in 70 years Thursday, giving sweeping new authority to the Food and Drug Administration to regulate the way food is grown, harvested and processed," Lyndsey Layton reports for The Washington Post.

"Agriculture interests were able to win key concessions" before the 283-142 vote, Layton reports. "Small farms are exempt from registration fees, ranchers and farmers now regulated by the Agriculture Department are excluded from the requirements of the bill and the FDA will have to consider the special concerns of small growers and organic farmers, among other provisions." (Read more) "Skeptics said the small-farm exemptions are not iron-clad," reports Charles Abbott of Reuters. "The National Sustainable Agriculture Coalition said FDA would judge if a farm gets most of its money from direct sales. Small farms that sell cheese, jam or other products to wholesalers would be subject to the fee and traceability, it said." (Read more)

"The pork industry kept out of the bill some proposed restrictions on antibiotic use," and grain growers will be exempt from "new farming standards," reports Philip Brasher of The Des Moines Register. Other changes from the original bill would "curb the FDA's access to farm records and limit its ability to set production standards to include only foods most likely to be contaminated," Jane Zhang reports for The Wall Street Journal. "The Senate isn't expected to act on similar legislation until later this year." (Read more)

"FDA typically relies on state inspectors to oversee processors," Brasher notes. "But even when they are working under contract with FDA, state inspectors have no authority to look at company safety records, a major loophole in current law, critics say." (Read more)

Thursday, July 30, 2009

A lesson about community journalism and blogging

The news director of a public radio station in western Alaska is out of a job after local residents discovered she had a blog that began last fall in part, "I love living in a place where I can be treated as a respectable personage simply by dint of being sober, employed and totally uninterested in having sex with relatives or children." Another referred to residents of Dillingham, population 2,400, "passing drunk women around like poorly rolled joints."

Eileen Goode "figured she was mainly writing for herself and her friends back in New England," reports Kyle Hopkins of the Anchorage Daily News. But she should have known that the searchable nature of the Internet would eventually bring the blog Chilly Hell to her neighbors' attention and endanger her job at KDLG, owned by the local school district.

Goode told Hopkins that the station manager told her last Friday afternoon that he wanted her off the job. "Over the weekend, a man pushed her in a ditch, but later apologized, Goode said. A local bar refused to serve her. On Monday morning, she resigned," Hopkins reports. Goode told him, "The first rule of living in a small town is, No. 1, be polite. And I wasn't polite." (Read more)

Health-care reform must be bipartsan, expert says; editor says debate reflects long cultural divide

Nothing in the current debate about health coverage "offers any promise for better days for any of us, but particularly for those living in rural America," former Kentucky state health commissioner Robert Slaton writes in the Daily Yonder. "The health care debate should be about health care, not health insurance."

That, Slaton writes, means "We should be talking about how to ensure that adequate services are available to rural America, about how to streamline the systems and processes and thereby lower cost and improve quality, not just how to “cut costs” (which usually means more regulation, more complexity and more hassles for providers, particularly doctors)."

Slaton faults President Obama and liberal Democratic committee chairs in the House for identifying villains and allowing the fight to become partisan, and compliments the conservative Blue Dog Democrats for their July 9 letter calling for bipartisanship. He says any plan should "address access, affordability, accountability and personal responsibility." Slaton is chair of the Kentucky Chamber of Commerce's health-care committee and member of the executive committee of the advisory board of the Institute for Rural Journalism and Community Issues. He was health commissioner under Democratic Gov. Brereton Jones, a health reformer, about 15 years ago. (Read more) Slaton's article is slated to appear in The Ledger Independent of Maysville, Ky., which has been setting a good example by running such articles.

Yonder Editor Bill Bishop writes for Politico's Arena section that competing approaches to health reform reflect a lomgstanding and "fundamental difference in worldview. It’s a division in what people expect out of life," starting with the split among Protestants in the late 19th Century, defined by theologian Martin Marty. "Private Protestants promoted individual salvation and personal morality," while Public Protestants promoted political action to resolve failures of society.

Since then, the Private Protestants have defined themselves as fundamentalists and entered the public sphere. One major marker of that was the addition of "under God" to the Pledge of Allegiance in 1954. Then, as the courts and Congress made public certain spheres that many fundamentalists had long considered private, with rulings on school prayer and abortion, for example, they became actively involved in politics. That reversed the longstanding aversion to politics of the largest Protestant denomination, the Southern Baptist Convention. In the health debate, Bishop writes, "Public Protestants and their nonreligious heirs favor a government mandate" to buy health insurance and a public option to provide it. "Private Protestants see those provisions as a 'D-Day for freedom'."

Wednesday, July 29, 2009

Obama visits Appalachia to promote health reform days after annual free clinic draws thousands

President Obama held a rally for health-insurance reform at a Kroger grocery store in Bristol, Va., today, "just days after more than 2,700 poor people from Appalachia were treated at a free clinic" in a coalfield town 50 miles to the northwest, Duncan Mansfield reports for The Associated Press. But despite the need for health care and coverage in the region, "more than 200 protesters" came to the event to oppose Obama's reform efforts. (Photo by Kyle Green, The Roanoke Times)

"The protesters, who came from the tri-state area of Virginia, North Carolina and Tennessee, were focused on who will get to make health care decisions," Mansfield reports. The 10th annual Remote Area Medical clinic in Wise "drew a turn-away crowd of desperate men, women and children from Virginia, eastern Kentucky and northern Tennessee."

Howard Berkes of National Public Radio called it "a Third World scene with an American setting. Hundreds of tired and desperate people crowded around an aid worker with a bullhorn, straining to hear the instructions and worried they might be left out." The Coalfield Progress of Norton reports that almost 5,600 medical services were provided.

David Hawpe retiring after 40 years at Louisville paper; fought to keep its state, rural coverage

"David Hawpe, an unrepentant liberal who spent much of his professional life railing against what he considered to be the coal industry's excesses and as an advocate for the underprivileged, especially in his beloved Appalachia, is retiring after 40 years with The Courier-Journal," effective Aug. 14, R.G. Dunlop reported for the Louisville newspaper.

Hawpe, 66, started working for the paper in its Eastern Kentucky Bureau at Hazard and rose to become editor, but kept paying close attention to the region, where he spent his preschool years. He "regularly wrote with passion about the complex mix of beauty, poverty, challenge and opportunity that is Eastern Kentucky," wrote Dunlop, another veteran of the Hazard bureau, now closed. Executive Editor Bennie Ivory called Hawpe "an iconic figure at the newspaper and in the state and region" and "the voice and conscience of The Courier-Journal." (Read more)

In 1996, Hawpe became editorial director, overseeing the editorial pages, but as a company vice president was the point man for efforts to maintain the paper's rural coverage and circulation. The C-J was one of the last papers to abandon statewide coverage, about three years ago. Its state circulation gradually dwindled, starting before Gannett Co. Inc. bought the paper from the Bingham family in 1986. It would be hard to thank David enough for all he's done for Appalachia, Kentucky, journalism, the newspaper and this writer, who once worked there and still writes a column, begun at David's invitation. May the road rise to meet you, old buddy.

Health reform battle helps TV station budgets, but will stations spend money on news coverage of it?

"Local television stations, suffering from steep declines in ad spending, are getting a much-needed shot in the arm from lobbying groups trying to sway the national debate over health care," The Wall Street Journal reports. "Altogether, groups on various sides of the debate have spent an average of about $1 million a day in recent weeks, analysts say."

Evan Tracey, president of the Campaign Media Analysis Group at TNS, a research firm owned by ad holding company WPP, told reporters Suzanne Vranica and Alicia Mundy that $41 million has been spent this year on local spots about helth care. "If the debate over health-care legislation drags into the fall, as now seems likely, the figure could rise to $250 million, Mr. Tracey says." (Read more)

We hope the news departments at local stations will realize they have an obligation to give their viewers more than paid, misleading sound bites. But given our research on similar situations, we're not very hopeful. As James Rainey noted in the Los Angeles Times yesterday, even CNN cut off coverage of a key senator as he was about to explain details of a potential compromise. Anchor Tony Harris said Democrat Max Baucus of Montana was "a little bit in the weeds," then cut to an update on Lance Armstrong's tiff with a fellow bicyclist. Many outlets, particularly Fox News, over-emphasized "the potential failure of President Obama to make this week's deadline," which he set, for Congress to act.

"America has a health-care crisis, yes, and so do broad segments of the media, particularly television news," Rainey opined. "They have transformed the story of how to fix an overpriced and inadequate care system into an overheated political scrum, with endless chatter about deadlines and combatants and very little about the kind of medical care people get and how it might change." He cited findings of the Project for Excellence in Journalism that the coverage has been dominated by politics and legislative strategy. (Read more)

Tuesday, July 28, 2009

A trip to Arkansas helps health reformers understand why Blue Dogs oppose liberals' bill

UPDATE, July 29: Rep. Mike Ross announced today that Blue Dog Democrats and Rep. Henry Waxman, chairman of the House Energy and Commerce Committee, have struck a deal that will reopen committee deliberations on the bill. "The legislation will now exempt small businesses with a payroll less than $500,000 from paying for any government-sponsored health coverage - double the $250,000 in the initial draft," Patrick O'Connor reports for Politico. "The new version of the bill also has a breakthrough on the concept of health care 'co-ops,' seen by some as an alternative to a public plan. States would be allowed to create co-ops for residents to buy private insurance. But the Waxman-Ross deal will also keeps the 'public option' of government-sponsored health care." (Read more) Across the Capitol, there is "an emerging consensus among a bipartisan group of senators" on a bill, The Washington Post reports.

In Prescott, Ark., population 3,600, many residents are forced to go uninsured because of skyrocketing health care premiums. They also suffer from physician shortages, caused in part by limited reimbursements for federal programs like Medicare. Health-insurance reform bills in Congress aim to address those problems, but Prescott's congressman, Democratic Rep. Mike Ross, says other parts of the legislation steer him to vote against it.

Ross is skeptical whether a public option for coverage will benefit his rural constituents in the long run, Eric Pianin and Ann Carrns report for Kaiser Health News. Ross and other fiscally consertvative Blue Dog Democrats say the various bills would not solve many problems unique to rural areas, and until changes are made, they will vote against it. "What we’re talking about is containing the cost, slowing the rate of growth of health care down where it can grow at the rate of inflation,” Ross said in an interview, “If we don’t, it’s going to bankrupt this country.” But at the same time, Ross and other Blue Dogs are calling for changes to hospital and physician reimbursement rates – tactics that will likely drive up the cost of Medicare and Medicaid, the writers note.

The only hospital in Prescott’s county closed in 1995 partially due to low federal reimbursement rates and the number of underinsured and uninsured residents in the town continues to grow. But while most Blue Dogs agree on rural health care equality, they say the funding cannot compromise rural employers already facing a poor economy and rising health costs. “You know, it’s easy to provide everybody a shiny new insurance card,” Ross said. “But what’s important here is they actually have access to a doctor once they get the insurance card.” (Read more)

Monday, July 27, 2009

Private rural wells at higher risk of water pollution

Private wells are not subject to the same scrutiny and regulations as public water supplies, a lesson some families in Wisconsin are learning the hard way. More than 750,000 private wells do not undergo state-ordered tests and can be contaminated with pesticides and sewage, Ron Seely reports for the Wisconsin State Journal.

Although the state Department of Natural Resources has records of private wells being built, testing is left to landowners. In 2008, only 10 percent of private wells were tested, but it cost more than $150,000 to replace structures poisoned by bacteria, nitrates, arsenic and herbicides like atrazine. Ken Bradbury, a hydrogeologist with the Wisconsin Geological and Natural History Survey, said the lack of awareness surrounding well pollution is appalling. “If you own a rural home, next to your house, your well is the most valuable piece of the property,” Bradbury told Seely. “It’s almost shocking to me how little people know about their wells. And it’s your responsibility. Nobody from the government is going to come out and test it for you.”

Some agricultural areas have a higher risk of water contamination due to increased use of liquid manure, Mark Putra, section chief of private water supply for DNR, told Seely. In a 2007 survey of 49 groundwater samples, 31 were contaminated. For many landowners, water pollution is out of sight, out of mind, but water filters don't block bacteria, and septic systems can contaminate a private supply. Bradbury says people shouldn’t be fooled by the “assumption that the water is good.” (Read more)

Alaska towns ban plastic bags, Styrofoam vessels

Alaska's largest rural town has voted to ban plastic bags and Styrofoam takeout containers, hoping to put an end to the thousands of “white birds” that sweep across the state’s tundra on any given day. Restaurants and grocery stores targeted by the ban will offer reusable bags and recyclable plastic, Kyle Hopkins reports for the Anchorage Daily News. (Wilson Naneng photo)

Advocates of the ban in Bethel (pop. 5,700) say education about plastic waste has earned the support of many since a first attempt was overturned eight years ago. The waste often ends up on the ocean floor and last spring, Hopkins writes, “the spongy tundra around the dump looked like a tossed-plastic salad.” The local Alaska Commercial Co. in Bethel estimates that the average 1,700 sales a day use two bags each.

Bethel is the latest Alaska town to ban plastic bags, joining other remote villages like Hooper Bay. The ban will take effect in September 2010, but the opposition argues that the environmental benefits are still unclear and the ban will drive up the cost of groceries. But advocates, like Bethel’s recycling center manager David Stovner, are simply fed up with the tundra covered in plastic snow. "It looks like white geese out there. Eight million of them," he said. (Read more)

Justice Dept. anti-trust unit looks at food industry

The antitrust division of the Department of Justice is beginning to look into the food industry despite resistance from other parts of the Obama administration, Stephen Labaton reports for The New York Times.

Independent Sen. Bernard Sanders of Vermont wants to know if small farms are being hampered unfairly by large food processors, particularly in the milk industry. But using the power of the antitrust division would be a dramatic policy change from the Bush administration, which limited actions against large corporations who used market dominance to reduce competition.

The current debates “get to the heart and soul of exactly what the competition policy of the Obama administration will be,” Mark Cooper of the Consumer Federation of America told the Times. (Read more)

Sunday, July 26, 2009

W.Va. strip mines not restored to approximate original contour, as 1977 federal law requires

Despite a federal law, many coal operators in southern West Virginia are not restoring strip mines to their ‘approximate original contour,’ as required by federal law Ken Ward Jr. reports for The Charleston Gazette. Environmental advocates say the Office of Surface Mining Reclamation and Enforcement is partially to blame, since it has failed to clarify what AOC really means.

Under the 1977 federal strip-mine law, “mine operators must put rock and dirt back so that the site ‘closely resembles the general surface configuration of the land prior to mining’," Ward writes. But that language of the law has not been clarified much by regulations, unlike many other parts of the law. Recent investigations cited eight areas where mining made land was 24 to 205 feet lower.

The federal mining office has said the West Virginia Department of Environmental Protection needs to do a better job tracking mining so it can better enforce the law, but advocates like lawyer Joe Lovett, director of the Appalachian Center for the Economy and Environment, say the problem is more profound. He says Compliance with AOC regulations would minimize the environmental effect of mountaintop removal, but Lovett told Ward few mines in Appalachia abide by them.

More federal studies are being conducted in Kentucky, Tennessee and Virginia, and supporters of mountaintop removal like the National Mining Association and House Natural Resources Committee Chairman Nick J. Rahall of West Virginia are anticipating the results. "Thirty years, and we are still looking for a definition of AOC," Rahall said reflectively last year. (Read more)

Study links coal dust and emphysema, says current standard not enough for long-term exposure

A new study by the National Institute for Occupational Safety and Health says coal dust exposure is directly linked to emphysema severity in smokers and non-smokers, Ken Ward Jr. reports for The Charleston Gazette. The study, published in the American Journal of Respiratory and Critical Care Medicine, provides more evidence about the negative health effects of an industry that has nearly doubled worldwide in the past 25 years.

More than 700 autopsies were performed on miners and non-miners whose lung tissue was examined for emphysema. The researchers found emphysema in miners was significantly more severe than in non-miners among both smokers and never-smokers. Although the miners examined worked prior to the 1972 federal standard limiting legal coal dust concentrations to 2 milligrams per cubic meter, NIOSH says a full working lifetime's exposure under current law would produce a cumulative exposure similar to those autopsied. The results called for more research about the possible relationship between coal dust and other heart and lung diseases. (Read more)