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Days May Be Numbered For Farmland Rush

1 of 1 By Henry A. Barrios / The Californian    “If you see land values going down, then I think that would open up opportunity for buying land and expanding what we do,” said Steve Murray, owner of Murray Family Farms, which grows some 200 varieties of crops on about 300 acres near Edison. This photo was taken in May 2013. BY JOHN COX Californian staff writer jcox@bakersfield.com Concerns are rising in Kern County’s agricultural community that a looming interest rate hike could halt California’s farming boom. The overriding worry is that the Federal Reserve’s plans to wean the economy off low interest rates will drive up borrowing costs and, as a result, strengthen the U.S. dollar. If that happens, and many economists expect it will, it would make California ag exports more expensive overseas. But considering how quickly Kern’s farmland values have climbed since the start of the recession — between 33 percent and 74 percent, depending on the location, water access and crop — county property tax revenues would probably take a hit over the next few years. On the other hand, lower ag land prices could make it easier for farmers to expand their operations — providing they’ve saved enough money and not gone too deeply in debt. “If you see land values going down, then I think that would open up opportunity for buying land and expanding what we do,” said Steve Murray, owner of Murray Family Farms, which grows some 200 varieties of crops on about 300 acres near Edison. DECLINES AHEAD BUT NO CRASH? A report last month by ag lender Rabobank predicted that Central U.S. farmland values will drop by as much as a fifth during the next three years. It forecast lower prices for Midwestern staples like corn and soybeans, which have seen small declines this year. The Western United States will see a more moderate decline in ag land prices, the report said, because of the region’s greater crop diversity compared with the Midwest and closer proximity to urban areas. What there won’t be is a 1980s-style collapse in U.S. land values, or anything resembling the bursting of a bubble, Rabobank’s report emphasized. “I personally don’t use the term ‘bubble,'” said Vernon Crowder, a senior analyst with Rabobank International’s Food & Agribusiness Research and Advisory group, which prepared the report. He explained that the farmland price increases of recent years have been well supported by farmers’ earnings, which wasn’t the case in the 1980s. Still, the “B” word has come up as outside investors turned to farmland as a good place for their money during the recession. Rabobank and others have noted a sharp increase in investor land purchases, even as they agree that the majority of acquisitions have been by agricultural interests. Other trends back the idea that a sharp, broad-based downturn in farmland value is unlikely: Many farmland purchases made since 2009 were done in cash, so there is less debt to be serviced if interest rates jump. Also, some of the most expensive ag property includes water rights, which is expected to have long-term value as Southern California — and its thirst — continues to grow. IMPACT ON COUNTY GOVERNMENT Kern’s rising farmland values have led to higher property taxes on the county’s so-called Williamson Act properties, which generally encompass the county’s farmland. Such acreage is now valued at about $3.8 billion — a 52 percent increase since 2010 that translates to an additional $13 million a year for local schools, cities, special districts and county government, Kern County Assessor-Recorder Jim Fitch said. While he declined to speculate about future farmland values, Fitch emphasized that his office bases assessments of such property primarily according to how much the land earns, or would earn, in rental prices. “The commodities are doing very well, and so we have seen rents increase a great deal,” leading to higher valuations and property tax revenues, he said. Rabobank’s Crowder pointed to strengths and potential weaknesses for certain crops popular among local farmers. Pistachios prices, he said, depend largely on demand from Asia. Kern County farmers heavily invested in the nuts could have a hard time finding a market if that overseas market were to shrink, he said. He was more bullish about another crop that has seen increased local acreage: mandarins. Even in the face of a heightened threat from the Asian citrus psyllid pest, Crowder said growing domestic demand has improved the fruit’s prospects. “The consumer really likes the product,” he said. He cautioned that there could be a concern if mandarins end up cutting into demand for navel oranges, which also take up significant amounts of local acreage. DECISIONS AHEAD At this point, more people are still looking to buy farmland than there are plots for sale, and it’s this imbalance that has kept prices strong, said farm and ranch broker Robb Stewart, an accredited farm manager with Pearson Realty in Bakersfield. He and Kern County Farm Bureau Executive Director Benjamin McFarland said there is a growing recognition among local farmers that things could soon shift in favor of buyers with money to spend. Assuming interest rates do rise, what happens next will depend on individual farmers’ financial situation, they said. Those who need to borrow will have a harder time, while people with cash on hand will find bargains. Also, Stewart said farmers who took on loans with variable interest rates to buy their land are talking lately about locking in those rates as a preventative measure. “I don’t know whether they’re doing it, but they talk about it,” he said. McFarland said that although the situation may appear delicate from the outside, farmers are used to changing business conditions. “We adapt. This is what we do,” he said. “We can’t control everything and we have to make the best decision for our business, our family business, to make sure that we keep moving forward.” Continue reading

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World not ready to deal with aging populations

World not ready to deal with aging populations (AP) / 4 October 2013 The world is aging so fast that most countries are not prepared to support their swelling numbers of elderly people, according to a global study by the United Nations and an elder rights group. The report ranks the social and economic well-being of elders in 91 countries, with Sweden coming out on top and Afghanistan at the bottom. It reflects what advocates for the old have been warning, with increasing urgency, for years: Nations are simply not working quickly enough to cope with a population graying faster than ever before. By the year 2050, for the first time in history, seniors over the age of 60 will outnumber children under the age of 15. Truong Tien Thao, who runs a small tea shop on the sidewalk near his home in Hanoi, Vietnam, is 65 and acutely aware that he, like millions of others, is plunging into old age without a safety net. He wishes he could retire, but he and his 61-year-old wife depend on the $50 a month they earn from the tea shop. And so every day, Thao rises early to open the stall at 6am and works until 2pm, when his wife takes over until closing. An elderly man listens to a speaker at a political rally in New Delhi, India. — AP “People at my age should have a rest, but I still have to work to make our ends meet,” he says, while waiting for customers at the shop, which sells green tea, cigarettes and chewing gum. “My wife and I have no pension, no health insurance. I’m scared of thinking of being sick — I don’t know how I can pay for the medical care.” Thao’s story reflects a key point in the report, which was released early to The Associated Press: Aging is an issue across the world. Perhaps surprisingly, the report shows that the fastest aging countries are developing ones, such as Jordan, Laos, Mongolia, Nicaragua and Vietnam, where the number of older people will more than triple by 2050. All ranked in the bottom half of the index. The Global AgeWatch Index (www.globalagewatch.org) was created by elder advocacy group HelpAge International and the UN Population Fund in part to address a lack of international data on the extent and impact of global aging. The index, released on the UN’s International Day of Older Persons, compiles data from the UN, World Health Organisation, World Bank and other global agencies, and analyzes income, health, education, employment and age-friendly environment in each country. The index was welcomed by elder rights advocates, who have long complained that a lack of data has thwarted their attempts to raise the issue on government agendas. “Unless you measure something, it doesn’t really exist in the minds of decision-makers,” said John Beard, Director of Ageing and Life Course for the World Health Organization. “One of the challenges for population aging is that we don’t even collect the data, let alone start to analyse it. … For example, we’ve been talking about how people are living longer, but I can’t tell you people are living longer and sicker, or longer in good health.” The report fits into an increasingly complex picture of aging and what it means to the world. On the one hand, the fact that people are living longer is a testament to advances in health care and nutrition, and advocates emphasise that the elderly should be seen not as a burden but as a resource. On the other, many countries still lack a basic social protection floor that provides income, health care and housing for their senior citizens. Elderly people take shelter from the rain at a subway station in Taipei, Taiwan. — AP Afghanistan, for example, offers no pension to those not in the government. Life expectancy is 59 years for men and 61 for women, compared to a global average of 68 for men and 72 for women, according to UN data. That leaves Abdul Wasay struggling to survive. At 75, the former cook and blacksmith spends most of his day trying to sell toothbrushes and toothpaste on a busy street corner in Kabul’s main market. The job nets him just $6 a day — barely enough to support his wife. He can only afford to buy meat twice a month; the family relies mainly on potatoes and curried vegetables. “It’s difficult because my knees are weak and I can’t really stand for a long time,” he says. “But what can I do? It’s even harder in winter, but I can’t afford treatment.” Although government hospitals are free, Wasay complains that they provide little treatment and hardly any medicine. He wants to stop working in three years, but is not sure his children can support him. He says many older people cannot find work because they are not strong enough to do day labor, and some resort to begging. “You have to keep working no matter how old you are — no one is rich enough to stop,” he says. “Life is very difficult.” Many governments have resisted tackling the issue partly because it is viewed as hugely complicated, negative and costly — which is not necessarily true, says Silvia Stefanoni, chief executive of HelpAge International. Japan and Germany, she says, have among the highest proportions of elders in the world, but also boast steady economies. “There’s no evidence that an aging population is a population that is economically damaged,” she says. Prosperity in itself does not guarantee protection for the old. The world’s rising economic powers — the so-called BRICS nations of Brazil, Russia, India, China and South Africa — rank lower in the index than some poorer countries such as Uruguay and Panama. However, the report found, wealthy nations are in general better prepared for aging than poorer ones. Sweden, where the pension system is now 100 years old, makes the top of the list because of its social support, education and health coverage, followed by Norway, Germany, the Netherlands and Canada. The United States comes in eighth. Sweden’s health system earns praise from Marianne Blomberg, an 80-year-old Stockholm resident. “The health care system, for me, has worked extraordinarily well,” she says. “I suffer from atrial fibrillation and from the minute I call emergency until I am discharged, it is absolutely amazing. I can’t complain about anything — even the food is good.” Still, even in an elder-friendly country like Sweden, aging is not without its challenges. The Swedish government has suggested people continue working beyond 65, a prospect Blomberg cautiously welcomes but warns should not be a requirement. Continue reading

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India tops global remittances list

India tops global remittances list Issac John / 4 October 2013 With the developing world on track to receive $414 billion in migrant remittances in 2013 — an increase of 6.3 per cent over the previous year — India again topped the global chart with $71 billion in remittances, according to a revised World Bank forecast. Other top recipients of officially recorded remittances for 2013 are China ($60 billion), the Philippines ($26 billion), Mexico ($22 billion), Nigeria ($21 billion), and Egypt ($20 billion), the report said. The World Bank said migrant remittances to developing world is projected to jump to $540 billion by 2016. The GCC is already the largest send market for South Asian and Mena countries, contributing close to 50 per cent of the market. It also accounted for more than 40 per cent of the total inward remittances received by the market, said Sudhesh Giriyan, vice-president & business head, Xpress Money. “GCC will continue to grow in its stature as a major remittance source bloc with countries like the UAE and Qatar lining up major development projects, particularly in infrastructure, which will, in turn, lead to more influx of expatriate labour force,” said Giriyan. India’s projected remittance receipt is just short of three times the FDI (foreign direct in-vestment) it received in 2012, when the country’s recorded $69 billion in total remittances. India and China alone will represent nearly a third of total remittances to the developing world this year, said Dilip Ratha, economist and the manager of the Migration and Remittances Unit at the World Bank. Other large recipients include Pakistan, Bangladesh, Vietnam and Ukraine. Remittance in-flows to the Middle East and North Africa region are expected to grow by 3.6 per cent in 2013 to about $49 billion. With about $20 billion in remittances anticipated in 2013, Egypt is the sixth largest beneficiary in the developing world, and receives about 40 per cent of remittances sent to the Mena region. Migration within the Mena region is growing, accounting for a growing share of migrants. The largest corridor is from Egypt to the GCC, where there are 2.4 million Egyptian migrants, including 1.3 million in Saudi Arabia alone, the World Bank said. Remittances to Lebanon and Morocco, two other large recipients in the Mena region, are expected to recover in 2013, after flat or negative growth in 2012.  In 2012, the total remittances made by migrant workers in the Arab Gulf states amounted to $80 billion (representing a fifth of the global remittances), out of which 24 per cent were remitted by the migrant workers in the UAE for the same year, according to Ambassador Ahmed Al Jarman, Permanent Representative of the UAE to the United Nations at a UN roundtable. Globally, the world’s 232 million international migrants are expected to remit earnings worth $550 billion this year, and over $700 billion by 2016, says the latest issue of the World Bank’s Migration and Development Brief.  As a percentage of GDP, the top recipients of remittances in 2012 were Tajikistan (48 per cent), Kyrgyz Republic (31 per cent), Lesotho and Nepal (25 per cent each), and Moldova (24 per cent).  Growth of remittances has been robust in all regions of the world, except for Latin America and the Caribbean, where growth decelerated due to economic weakness in the United States.  In South Asia, remittances are noticeably supporting the balance of payments. In Bangladesh, Nepal, Pakistan and Sri Lanka, remittances are larger than the national foreign exchange reserves. All these countries (most notably, Pakistan) have instituted various incentives for attracting remittances.  In India, remittances are larger than the earnings from IT exports. With the weakening of the Indian rupee, a surge in remittances is expected as non-resident Indians take advantage of the cheaper goods, services and assets back home.  “Fall in the rupee exchange rate and attractive interest rates on external deposits have helped drive remittances to India, thereby supporting the balance of payments situation and contributing 3.7 per cent to India’s GDP,” said Promoth Manghat, vice-president — global operations, UAE Exchange.  The Indian rupee depreciated by over 20 per cent during the first three quarters of 2013, among other things due to concerns over continuing current account deficits in India and the impact of an expected tightening of monetary policy in the US, which has induced a general retrenching of international capital and reduced flows to India.  While actual data have not yet been compiled for the third quarter of 2013, money transfer operators are reporting a surge in remittances, as Indian migrants benefit from a higher value of their remittances in India. Remittances to India in the first half of 2013 were $35.6 billion. issacjohn@khaleejtimes.com     Continue reading

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