World's Water Problems, and Solutions, Can Be Found on the Farm

March 20, 2006 — By Mark Stevenson, Associated Press

MEXICO CITY — Eliminating water waste and mismanagement on farms -- rather than building dams or diverting rivers -- would go far toward alleviating the world's water crisis, officials and activists gathered at an international forum here said.

Farming accounts for 70 percent of the water consumed and a majority of its waste, said representatives of some of the 130 nations attending on Saturday the 4th World Water Forum to discuss water management around the globe.

Mismanagement of resources leads to a lack of safe drinking water for one-fifth of the world's population, the United Nations said in a report.

In the developing world, the water crisis is almost totally defined in relation to agriculture, with constant images of drought-blasted fields, withered corn stalks and skinny cattle.

With 525 million small farms in the world, farmers suffer the most from each problem discussed at the forum: poverty, disease, and the lack of sanitation and clean water.

"Farmers are central to the whole picture," said Patrick McCully, executive director of International River Network. "They use the majority of the world's water, and farmers are where most of the world's poverty is concentrated."

With 2.5 billion people living off the land, change is a daunting task.

"There are great problems with irrigation. We must convince our farmers to go to less extensive crops," said Michel Rocard the former prime minister of France. "It's a question of changing the whole agricultural method."

Traditionally, governments have responded to the problems of small-scale farmers -- defined as those with plots of 2 hectares (5 acres) or less -- by building big dam projects.

But McCully says most small farms are so high up in the hills or removed from rivers that they can't benefit from them.

Meanwhile, irrigation systems urgently need attention, according to Ute Collier, of the World Wildlife Fund.

"We can't afford to waste water in irrigation systems that are 30 to 40 percent efficient," he said. "If we could get that part of the equation done, we could probably cut down the number of dams we're building by half, at least."

Greater efficiency would free up money to help provide clean drinking water and food to small farmers who, despite raising food, constitute most of the 842 million people in the world who go hungry.

Participants in this forum have pledged to focus on the world's poor, many of whom live on less than 2 1/2 gallons of water per day -- one-thirtieth of the daily usage in some developed nations.

Collier's work has focused on improving irrigation for notoriously thirsty cash crops, like cotton and sugarcane, although they are seldom grown on the smallest farms.

Agriculture based on fields that temporarily flood is also a major problem because most of that water is wasted through evaporation. Added to these woes are pesticide and herbicide runoff from farm fields that pollute rivers and lakes, as well as soil erosion and salt buildup from irrigation.

In Mexico, host of the international forum, farm water disputes are the among the most sensitive issues in U.S.-Mexico relations.

In 2004, farmers in Texas were outraged when Mexico failed to let flow 1.3 million acre-feet of water into a border river under the terms of a 1944 treaty. An acre-foot is enough water to flood an acre (0.4 hectares) of land under 12 inches (30.5 centimeters) of water.

The long-standing Rio Grande water debt was paid in full by Mexico in 2005 after heavy rains replenished reservoirs.

Agriculture cannot be ignored in the water equation, according to Gerald Galloway, a civil engineering professor and visiting scholar with the U.S. Army Corps of Engineers.

"It is an important part of the U.S. economy, and it's even more important in the developing world," he said. "You have to be able to provide water for agriculture."

Source: Associated Press

 

 

 

Colgate to Buy Majority Stake in Tom's of Maine

March 22, 2006 — By Jessica Wohl, Reuters

CHICAGO — Tom's of Maine, a big player in the small but growing natural personal products category, has agreed to be swallowed up by Colgate-Palmolive Co., the world's largest maker of toothpaste.

In a deal unveiled Tuesday, Colgate said it would buy an 84 percent stake in privately held Tom's of Maine -- best known for its toothpaste -- for $100 million, subject to adjustment at closing.

Tom's of Maine has stronger gross profit margins than Colgate, making it an attractive prize. Colgate has narrowed its focus to highly profitable businesses such as oral care and personal care. However, with annual sales estimated at about $50 million, Tom's of Maine will be just a small addition to Colgate, which had $11.4 billion in sales in 2005.

Colgate expects to close the deal during the second quarter and said the acquisition should be neutral to profit in 2006 and increasingly positive after that.

Tom's of Maine was founded in 1970 by Tom and Kate Chappell with a $5,000 loan from a friend. Colgate said Tom Chappell will continue to run the company from its Kennebunk, Maine office. The Chappell family will retain a 16 percent stake. Colgate will have an opportunity to increase its holdings in the future.

According to Colgate, the U.S. market for natural oral and personal care products is valued at $3 billion and is growing 15 percent per year. Tom's of Maine is the No. 1 oral care brand in the natural category.

Tom's of Maine, which has nearly 200 employees, also makes mouthwash, floss, soap, deodorant and shaving cream. Its products do not contain artificial sweeteners, preservatives, colors, flavors or animal ingredients, and are tested without the use of animals.

Deutsche Bank analyst William Schmitz, who rates Colgate "hold," estimated that Tom's of Maine has annual sales of $40 million to $50 million. He said the deal was "not cheap" based on that estimate, with Colgate paying 2.4 times to 3 times sales.

Shares of New York-based Colgate were up 61 cents, or 1.1 percent, to $57.61 on the New York Stock Exchange.

The deal is the latest example of a mainstream corporation buying a niche company with strong social and environmental principles. In 2000, Unilever bought ice cream maker Ben & Jerry's. That company operates as an autonomous subsidiary of Unilever, and its philanthropic contributions and other community activities remain a major part of its culture, just as they were when it was a separate company.

"AN EXCELLENT FIT"

Tom and Kate Chappell said in a statement that they chose to partner with Colgate "because they have the global expertise to help take Tom's of Maine to the next level." They called Colgate "an excellent fit with our own cultural values."

Tom's of Maine's donates 10 percent of its profit to charitable organizations and encourages its employees to use 5 percent of their paid time for volunteer work.

The deal marks Colgate's first oral care acquisition since June 2004, when it bought privately-held Swiss company GABA Holding AG for $841 million, including $112 million of net cash.

Colgate President and Chief Operating Officer Ian Cook said in a statement that Tom's of Maine has gross profit margins which are 10 percentage points higher than Colgate's margin, making it "a logical acquisition as we continue to prioritize our global oral and personal care categories."

Colgate previously unveiled a target to reach gross profit margin of 60 percent by 2010. Its margin was 56 percent in the 2005 fourth quarter, excluding restructuring charges.

The latest acquisition comes as Colgate considers buying Pfizer Inc.'s Listerine brand. Cook said last week that Listerine could fit very well in Colgate's oral care product lineup, and that it would look at other parts of Pfizer's business up for sale but would not overpay.

Pfizer said in February that it may spin off or sell its consumer products business. In early March it said it had no interest in breaking up the brands, which also include Rolaids antacid and Sudafed cold pills.

Source: Reuters