AMAZON REPORT: A CONSERVATION SUCCESS

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AMAZON REPORT: A CONSERVATION SUCCESS
July-August 2010

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SPECIAL SECTION: TOWARD A MORE SUSTAINABLE FUTURE          Amazon carbon
                                                           credits p. 28
                                                           A more sustainable
                                                           cooking oil for
                                                           Walmart Brazil p. 30
                                                           Cargill water
AMAZON REPORT:                                             conservation p. 34

A CONSERVATION SUCCESS
AMAZON REPORT: A CONSERVATION SUCCESS
TOWARD A MORE SUSTAINABLE FUTURE

Green In the

  Zone
     SANTARÉM, BRAZIL

                               argill’s soybean terminal at the intersection
                               of the Amazon and Tapajós rivers in Brazil
                               isn’t one of the company’s largest facilities,
                               but it might be its best known. In 2006,
                               Greenpeace helped make it famous (or
                                                                                Cargill’s work in the Amazon has
                                                                                halted deforestation and has become
                                                                                a model for the government’s
                               infamous) in its “Eating Up the Amazon”
                                                                                conservation efforts.
                               report, charging that the terminal was           BY PAUL DIENHART | PHOTOS BY PALANI MOHAN
                               driving deforestation. The global response
     from consumers and customers ranged from concern to outrage.
         Today, satellite imagery verifies that deforestation in the
     region has halted, confirming the effectiveness of an industry
     moratorium on buying soybeans from farmers engaged in defor-
     estation—an initiative led by Cargill. A balancing of economic ac-
     tivities with conservation pioneered by Cargill’s Sustainable Soy
     partnership with The Nature Conservancy (TNC) has become a
     model for state conservation efforts. And the terminal is expand-
     ing to accept corn from local farmers.
         Ultimately, the legacy of the terminal might be in showing the
     way to effective conservation of the rainforest while providing eco-
     nomic development to the people who live in the Amazon region.             A small boat motors along the “meeting of the waters,”
         Ian Thompson, who leads the Amazon projects of The Nature              where the muddy Amazon and the clear Tapajós River meet
     Conservancy, has a single slide that shows what is happening in            in front of Cargill’s soybean terminal. Another meeting is
     the area around Cargill’s Santarém terminal. Bars show slight              taking place in balancing biodiversity with economic devel-
                                                                                opment—a zoning effort inspired by the success of the Sus-
     annual increases until 2008, when the bars go level.
                                                                                tainable Soy project of Cargill and The Nature Conservancy.
         “There has been zero deforestation in the Santarém area for the
     past few years,” says Thompson, who presented the results of the
     Sustainable Soy project at last year’s global climate conference in
     Copenhagen. “Cargill has helped hold farmers to the rules.”
         The conservation rules in the Amazon are some of the strict-
     est in the world. Farmers must show an 80-20 balance in favor
     of forest—even if the land they purchased was cleared many de-

14   CARGILL NEWS   July-August 2010
AMAZON REPORT: A CONSERVATION SUCCESS
A conservation officer
       inspects the primary rain-
       forest of Tapajós National
       Forest, a 600,000 hectare
       (1.5 million acre) preserve
       near Santarém. Satellite
       mapping pioneered by
       Cargill and The Nature
       Conservancy provides a
       way to link existing second-
       ary forests and create new
       preserves for biodiversity.
       Meanwhile, land opened
       decades ago can be used
       for economic activity in one
       of the more impoverished
       areas of Brazil.

July-August 2010   CARGILL NEWS   15
AMAZON REPORT: A CONSERVATION SUCCESS
cades before. However, the government has lacked resources to

                                                                                 MONITORING SYSTEM
                                                                                                                   enforce Brazil’s Forest Code.

                                                            TNC PROJECT BEGINS
                                 OPERATIONS BEGIN
                                                                                                                       Essentially, Cargill’s Sustainable Soy partnership with TNC

                                                                                 IMPLEMENTED
                                 CARGILL PORT
                                                                                                                   provided on-the-ground assistance for farmers to work toward
                                                                                                                   compliance with the Forest Code. Just as important, Cargill
                                                                                                                   provided the incentive. Santarém farmers who deforested land
                                                                                                                   after 2006 could not sell their soy-
                                                                                                                   beans to Cargill, losing their only
5000—                                                                                                              commercial market. Evading the
                                                                                                                   moratorium on deforestation was
                                                                                                                   impossible because satellite imag-
                                                                                                                   ing technology could detect even
4000—
                                                                                                                   small reductions in forest cover.
                                                                                                                       “In Santarém, we were able
                                                                                                                   to stabilize the deforestation in
                                                                                                                   six years. Some people thought it
                                                                                                                   might take 100 years,” says Benito
3000—                                                                                                              Guerrero, TNC project director,
                                                                                                                   who has worked hundreds of San-
                                                                                                                   tarém-area farms since the Sustain- Lucyana Barros is a global
                                                                                                                   able Soy project began in 2004.         imaging systems analyst at
2000—                                                                                                                  “I don’t know of any other com- The Nature Conservancy
                                                                                                                                                           office in Belem. Her computer
                                                                                                                   pany that is helping its suppliers get
                                                                                                                                                           screen (opposite page) shows
                                                                                                                   into compliance,” Guerrero contin- the Santarém area with soy-
                                                                                                                   ues. “This is the only state in Brazil bean farms outlined in orange.
                                                                                                                   where big business is active in fos- Resolution allows analysis
1000—
                                                                                                                   tering conservation of the Amazon. down to the level of the indi-
                                                                                                                                                           vidual farm, with secondary
                                                                                                                   Cargill confronted the problem and
                                                                                                                                                           forest showing up as green.
                                                                                                                   provided a solution—a system to
                                                                                                                   monitor suppliers and help them
  0—                                                                                                               get into compliance. The project has helped the government un-
         2000   2001     2002     2003              2004   2005                  2006                2007   2008
                                                                                                                   derstand what is possible with satellite monitoring.”
    TOTAL DEFORESTED AREA (KM2) IN SANTARÉM AND BELTERRA                                                               Today, 383 farms in the Santarém area are part of the Rural En-
    Not long after Cargill and The Nature Conservancy began working on the                                         vironmental Registry. This means all have been evaluated by TNC
    Sustainable Soy project, deforestation in the Santarém area leveled off.
                                                                                                                   for compliance with conservation laws. Only these law-abiding
                                                                                                                   farms are qualified to sell soybeans to the Cargill terminal.
                                                                                                                       Since 2006, all the major soybean companies in Brazil have
                                                                                                                   renewed the moratorium on buying soybeans from farmers in-
                                                                                                                   volved in deforestation. In 2009, Brazil announced that Amazon
                                                                                                                   deforestation had dropped 45 percent in the past year—the larg-
                                                                                                                   est decrease in 20 years.
                                                                                                                       While some of the decrease was because of the global economic
                                                                                                                   downturn, Carlos Minc, Brazil’s former environmental minister,
                                                                                                                   felt comfortable making this statement: “Soya is no longer a signifi-
                                                                                                                   cant force in the destruction of the Amazon rainforest.”

                                                                                                                   A SCALE OF 1:125,000
                                                                                                                   At the TNC office in Belem, not far from where the Amazon River
                                                                                                                   pours into the Atlantic Ocean, Lucyana Barros brings up a Land-
                                                                                                                   sat photo on her computer. Thin orange lines designate the bound-
    Cargill’s soy terminal in Santarém, the only local market for soybeans,                                        aries of farms amid a patchwork of different shades of green and
    refused to buy from farmers who cut secondary forest on their land.                                            brown. Puffy white spots indicate clouds. The scale is such that it
    Satellite mapping can detect even small losses of forest.                                                      is possible to make out individual buildings.
                                                                                                                       Every farm that supplies Cargill’s terminal is monitored from
                                                                                                                   space, making the Santarém soy farmers possibly the most close-
                                                                                                                   ly scrutinized farmers in the world.

    16    CARGILL NEWS   July-August 2010
AMAZON REPORT: A CONSERVATION SUCCESS
“THIS IS THE MOST CLOSELY WATCHED REGION
 IN THE WORLD. THERE IS NO DOUBT ABOUT IT.
 IF YOU OPEN UP EVEN 1 HECTARE OF FOREST,
 THE SATELLITE MONITORING OF TNC
 AND CARGILL WILL FIND OUT.”    PIO STEFANELO
                                        Farmer

                                                 Santarém
AMAZON REPORT: A CONSERVATION SUCCESS
“With satellite imagery, we can detect     Benito Guerrero,
any deforestation immediately,” says ana-      project director for The
                                               Nature Conservancy,
lyst Barros. “If a potential problem is de-
                                               stood on a charred log
tected, we visit the farm to confirm it.”       behind some scraggly
    Guerrero is the TNC employee most          corn plants—the sign of
likely to do the farm evaluations. He re-      slash-and-burn agricul-
calls one recent case where the satellite      ture that is practiced by
                                               poor people desperate
image caught a farmer who cleared an
                                               to feed themselves.
area of legal reserve. TNC reported the        Slash-and-burn is a
problem to Cargill, and the immediate          greater danger to sec-
response was to refuse to buy the farm-        ondary forests than the
er’s soybeans.                                 operations of profes-
                                               sional soy farmers.
    Suddenly, the farmer had 3,000 metric
tons of harvested soybeans and no mar-         RIGHT: Guerrero (right)
                                               spoke to a conservation
ket. His first response was anger at TNC
                                               officer in a canopy of
and Cargill. Then he agreed to hire a for-     Tapajós National Park,
est engineer to restore the legal reserve      primary rainforest
that had been destroyed (by squatters, the     that towers above the
farmer claimed).                               patches of secondary
                                               forest that soy farmers
    Satellite monitoring started as part
                                               are preserving.
of Cargill’s Sustainable Soy project with
TNC. “Eventually, Cargill and TNC will
back out and let the government take over the monitoring,” Guer-
rero says. “To be successful, we need the involvement of all par-
ties—Cargill, farmers and the government. The most important
change since this project started is government involvement.”
    TNC now is an official partner with the government of Para, the
state where Santarém is located. It will provide a database and tech-      ing public port, there were more than 100 non-governmental or-
nical support for Para to take over satellite monitoring. The moni-        ganizations (NGOs) working in the city. Organizers painted both
toring will be a key tool for an approach that could revolutionize         Cargill and the soy farmers as villains bent on destroying the
conservation of the Amazon—Ecological-Economic Zoning.                     rainforest to satisfy their own greed. The story resonated with
                                                                           many locals because, indeed, Santarém has been subject to nu-
ZONING FOR CONSERVATION                                                    merous boom-and-bust cycles, including gold, rubber and even
For some people, conservation in the Amazon means that economic            black pepper. Why should soy be any different?
activity is the enemy. It is a view that ignores that 23 million people       About three years ago, the situation became so controversial
live in the Amazon biome, that cities like Santarém go back hun-           that there was talk of the terminal closing—a fearful situation
dreds of years, that land cleared decades ago is unsuitable for regen-     for hundreds of soy farmers who depend on Cargill as their only
erating forest, and that the majority of residents live in poverty.        real market and on soy as the only crop offering a steady, global
    By the time Cargill built the soy terminal at Santarém’s exist-        market price.

18   CARGILL NEWS   July-August 2010
AMAZON REPORT: A CONSERVATION SUCCESS
Today, much has changed. Cargill is making plans to expand the   its best use. Designating previously opened land for economic activ-
terminal and offer local farmers a market for their corn. And the    ity can help conserve forest for biodiversity. If residents have a way
Sustainable Soy project has grown into Ecological-Economic Zoning    to make a living, they are less likely to open rainforest.
that has been approved by both the state and federal governments.        “Right now, there is a wall between environmentalists and
    “Santarém was our school,” says the TNC’s Guerrero. “When        agriculture producers,” says Fernando Costa, sustainability ad-
we started here, we didn’t even have an idea of what to do. This     visor for Cargill. “This law will break that down. This could
wasn’t about conservation in books. We developed a strategy af-      create a new era for cooperation on preserving the Amazon.”
ter we got here. Now, we think we have a model that will work        Igor Galvão is coordinating the zoning project for the state of
for the entire Amazon—and that may be the biggest contribution       Para. He confirms that the zoning grew out of the Sustainable
of the Sustainable Soy project.”                                     Soy project that Cargill started in Santarém. In particular, the
    The philosophy behind Ecological-Economic Zoning is that map-    satellite mapping provided the technology to categorize land.
ping and categorizing land provides a way to make decisions about        “The program has two objectives: fighting rural poverty

                                                                                                            July-August 2010   CARGILL NEWS   19
AMAZON REPORT: A CONSERVATION SUCCESS
“THIS WASN’T ABOUT CONSERVATION IN BOOKS.
 WE DEVELOPED A STRATEGY AFTER WE GOT
 HERE. NOW, WE THINK WE HAVE A MODEL THAT
 WILL WORK FOR THE ENTIRE AMAZON—AND
 THAT MAY BE THE BIGGEST CONTRIBUTION OF
 THE SUSTAINABLE SOY PROJECT.” BENITO GUERRERO
                                                                                 The Nature Conservancy

 while helping the state of Para manage its natural resources,”       valuable to allow economic activity.”
 Galvão says. “We want a balance—production that fits with                 The zoning plan is encouraging to Toni Filter, president of the
 ecology. Zoning considers multiple factors, including existing       Farmers Union in Santarém. “Society is starting to understand
 forest, land use, geology and agricultural potential. Technical      the importance of agriculture,” he says. “This city is 348 years
 information is combined with socio-economic information and          old. There have been more than three centuries of working the
 can be layered on a map.”                                            land around here. But of the 3 million hectares in this area, only
     Mapping raises the possibility of linking conservation areas     1.7 percent is in agricultural land.”
 to create much greater biodiversity than is possible with isolated       Filter took personal offense when NGO organizers came to
 patches of forest.                                                   the city to portray farmers as destroyers of the Amazon. The land
     “This idea is intelligent trade-offs,” Guerrero says. “Where     he farms was cleared decades before he arrived in the area. He is
 biodiversity already is low, we see a potential for economic ac-     proud of using precision agriculture techniques like satellite imagery
 tivity. Likewise, we can identify areas where biodiversity is too    and GPS systems for precise application of fertilizer and chemicals.

 20   CARGILL NEWS   July-August 2010
AMAZON REPORT: A CONSERVATION SUCCESS
ity,” he says. “You will never be able to totally restore forests here.
                                                                     What is gone is gone. We should concentrate on saving tropical
                                                                     forest that needs to be protected.”
                                                                         Suddenly, Guerrero pulls the truck to the side of the road and
                                                                     hops out. “Here’s a jacaranda tree,” he calls, holding up a leaf the
                                                                     size of a dinner plate. “It is a pioneer tree—one of the first species
                                                                     in the ecological succession from degraded pasture land.”
                                                                         Farther along, he stops by a grove of palm trees. “A grove like
                                                                     this—what we call a shallow forest—indicates that a series of
                                                                     fires burned here,” Guerrero says, getting out of the truck. Walk-
                                                                     ing into a clearing in the grove, we find scraggly corn plants,
                                                                     unevenly spaced, growing out of the charred ground. It is slash-
                                                                     and-burn agriculture.
                                                                         “Some poor people are growing food here for their own con-
                                                                     sumption,” Guerrero explains. “They have no land, so they have
                                                                     burned this area next to a legal reserve. The burning makes the soil
                                                                     useful for three to five years, and then they will burn another plot.
                                                                         “The traditional slash-and-burn agriculture is much more of a
                                                                     threat to the forest than commercial soy farming. The profession-
                                                                     al farmers now understand that preserving biodiversity is im-
                                                                                              portant to their business. Destroying forest
                                                                     Fernando Pallaro         destroys the market for their crops.”
                                                                     grew up in a poor            The road finally brings us to the farm of
                                                                     family in southern       Pio Stefanelo, one of the most progressive
                                                                     Brazil. Pooling their    soybean farmers in the Santarém area. Sit-
                                                                     money, his family
                                                                     sent him north to
                                                                                              ting on his porch, Stefanelo speaks in Por-
                                                                     start a farm where       tuguese. His sons listen intently and occa-
                                                                     land is still afford-    sionally assist with the English translation.
                                                                     able. He meets the       Both boys are planning to study agronomy
                                                                     legal requirement of     in the United States before returning to
                                                                     having at least half
                                                                     his land in forest,
                                                                                              Brazil to farm.
                                                                     and he is registered         “Soy is the only crop here that offers a
                                                                     with The Nature          stable  price,” Stefanelo says. “Some of the
                                                                     Conservancy to sup-      people here who were originally against
                                                                     ply Cargill. Today, he   Cargill have begun to understand that ag-
                                                                     and his wife and two
                                                                     children have an eco-
                                                                                              riculture is the only way to improve the
                                                                     nomic future grow-       economy. In some ways, Cargill took the
                                                                     ing soybeans on land     role of government in creating new rules
                                                                     cleared decades ago      for conserving the forest.
                                                                     for cattle ranching.         “If you ask some farmers, they will say
                                                                                              that the Sustainable Soy program is hor-
                                                                                              rible. They are missing the benefit. The
  “Farmers take pride in respecting the land. There is plenty of     world is watching us, and we cannot sell our crop unless we
open land to farm without destroying rainforest,” Filter says.       respect the environment. If export markets believe we are de-
                                                                     stroying the rainforest, they will not buy our crop. These are our
A JACARANDA TREE                                                     customers.
Driving the bumpy roads outside of Santarém that he knows like           “This is the most closely watched region in the world. There
the back of his hand, Benito Guerrero keeps up a steady com-         is no doubt about it. If you open up even 1 hectare of forest, the
mentary about the sights we are seeing. The TNC project manag-       satellite monitoring of TNC and Cargill will find out. This is the
er has worked with most of the farmers along this stretch of high-   Sustainable Soy program. Without it, we would have lost access
way. We pass clumps of bushes and a scattering of small palm         to credit or to a market.
trees—land that Guerrero speculates had been cleared 50 or 60            “Three years ago, I thought Cargill would probably leave. In-
years ago for cattle ranching or possibly a rubber plantation.       stead, we have a changed paradigm, and there is a future here
   “This is the kind of land where we can intensify farming activ-   for my sons.”

                                                                                                            July-August 2010   CARGILL NEWS   21
AMAZON REPORT: A CONSERVATION SUCCESS
Pio Stefanelo explained
soybean maturity to his
sons Alexandre, 12, and
Gabriel, 14. Both boys plan
to study agronomy in the
United States. The second-
ary forest that rings this
field will be preserved in
accordance with Cargill’s
Sustainable Soy project.

22   CARGILL NEWS   July-August 2010
“THE WORLD IS WATCHING US, AND WE
CANNOT SELL OUR CROP UNLESS WE
RESPECT THE ENVIRONMENT. IF EXPORT
MARKETS BELIEVE WE ARE DESTROYING
THE RAINFOREST, THEY WILL NOT BUY
OUR CROP. THESE ARE OUR CUSTOMERS.”
                                   PIO STEFANELO
                                           Farmer

                         July-August 2010   CARGILL NEWS   23
TOWARD A MORE SUSTAINABLE FUTURE

              Good
             Neighbors
                                                                                                                Officers of the
                Making the effort to communicate                                                                Santarém neighborhood
                     and get involved in the local                                                              association, Joana Maria
                                                                                                                Marinho, Prof. Anesio
                    community has made a huge                                                                   de Oliveira and Maria da
                         difference in Santarém.                                                                Conceicão, are starting
                                                                                                                to get a different view
                                                                                                                of the Cargill terminal in
                                                                                                                the background.

SANTARÉM, BRAZIL
                          nesio de Oliveira, a geography professor         At the neighborhood club house, a plaque next to the door ac-
                          at the local college, used to write poetry    knowledges Cargill, which has helped the association restore the
                          protesting the presence of Cargill in his     murals of Santarém life that line the walls of the clubhouse. Fold-
                          home town. Today, as a director of San-       ing tables and chairs have the Cargill® logo—another donation
                          tarém’s neighborhood association, he          from the company.
                          warmly greets José Francisco, the local          Called the Veterano Esporte Clube, the association is non-
                          Cargill manager. Francisco is paying a vis-   profit and charges only 1 real ($0.56) per month for membership.
                          it to the neighborhood’s 50-year-old club-    Even so, in this poor neighborhood, many members are unable
house, which features a beautiful wood floor for samba dancing.          to pay their dues.
   What produced the smiles, joking and back-clapping? Com-                “It is important for Cargill to show people how their tax rev-
munication. Cargill is talking to community groups in Santarém          enue is supporting the city and the environment,” Marinho says.
that previously had no contact with the company.                        “In the past, Cargill never bothered to show the benefits it was
   “When Cargill first arrived, the members of our association were      bringing here.”
against any contact,” says Joana Marinho, another director. “We
were afraid. And the few times we tried, we got no response.            ‘GOOD FRUIT’
   “Then community organizers arrived in Santarém and told us           Francisco makes his way between tables piled with watermelon,
that Cargill was a bad company. They urged us to join protests.         corn, peppers, pineapple, mango, papaya, jack fruit, Brazil nuts and
We thought, ‘Maybe the protestors are right.’”                          manioc flour. He stops to show a bottle of tucupi, a staple of local
   In its early years in Santarém, Cargill concentrated on starting     cooking that consists of manioc juice with peppers floating in it.
and running its terminal. Since about 95 percent of the soybeans            The farmers market of Santarém is a bustling, colorful place that
in the terminal come by barge from growing areas outside the            runs seven days a week. You can see Cargill’s terminal from its en-
Amazon, hundreds of kilometers away, local farmers didn’t get           trance, but until recently Cargill had no connection with the small
to know Cargill.                                                        farmers in the area who grow fruits and vegetables instead of soy.
   “When we opened the terminal seven years ago, we thought a               Arriving at a small trailer, Francisco greets Francinon Ferias,
relationship with the neighbors wasn’t necessary,” Francisco says.      president of the Rural Producers Association of Santarém. Most
   When Francisco was named manager in October 2008, it was             members farm between 1 to 200 hectares on land long-since
with the understanding that community relations would be a ma-          cleared of forest. Cargill is helping the association improve sani-
jor emphasis. He soon hired Katiane Jesus, a native of Santarém,        tation at the market, supplying uniforms to the vendors and pro-
to help him with community connections.                                 viding training on agronomic practices. The terminal is making

26   CARGILL NEWS   July-August 2010
ABOVE: Francinon Farias (left),                                                                      dents toured the facility last year.
head of the Rural Producers                                                                              Residents on tour can ask ques-
Association of Santarem, was
                                                                                                     tions, sometimes revealing some as-
pleasantly surprised when
Cargill manager José Francisco                                                                       tounding misperceptions. For example,
(right) reached out to the small                                                                     it was commonly believed that Cargill
farmers. Association members                                                                         was clear-cutting rainforest to grow
hold a farmers market seven                                                                          soybeans. The terminal staff explained
days a week in Santarém.
                                                                                                     that Cargill is not a farmer and that it
RIGHT: Cargill’s donations to                                                                        refuses to buy soybeans from farmers
the neighborhood association
                                                                                                     who cut protected forest reserve.
allowed for restoration of the
murals that surround the samba                                                                           “We were able to clear up some
dance floor of its social club.                                                                       misunderstandings,” Francisco says.
                                                                                                     “It is interesting that it only took a little
 the residue from soybean cleaning available for free for farmers       effort to connect with the community and some humbleness to
 to use as low-grade fertilizer.                                        address the people’s concerns.”
    “There is a lot in Santarém that can be improved,” Francisco            Francisco emphasizes that the history of Santarém is a his-
 explains. “The city has 300,000 inhabitants, and 45 percent of         tory of exploitation. The boom-and-bust cycles have included
 them live in the surrounding rural area. We look at this associa-      gold, rubber and black pepper. “People here have grown to ex-
 tion as representing almost half of the population.”                   pect to get nothing back from giving up their wealth of natural
    Ferias admits that, until Cargill made the connection in 2009,      resources,” Francisco says. “Originally, Cargill was perceived as
 he heard only bad things about the company. “Through José, I have      just another exploiter.”
 gotten to know Cargill, and my opinion is positive,” Ferias says. “I       While distrust still exists, the community of Santarém is more
 believe that Cargill wants to help the farmers—big and small. In the   open to discussion and hearing Cargill’s side of the situation.
 future, we will harvest some good fruit from this relationship.”           “Today, I and some of the other professors are starting to re-
                                                                        verse our thinking about Cargill,” says Prof. Oliveira back at the
 OPEN DOORS                                                             neighborhood club. “I’m not saying that everybody is completely
 The hallmark of the community efforts is a program called “The         in favor of the company, but we are starting to see that the issues
 Terminal with Open Doors.” Everybody from the community                might be more complex. And the No. 1 thing,” he adds, holding
 is invited to regularly scheduled open houses. Some 1,700 resi-        up a finger, “is communication.”

                                                                                                                 July-August 2010   CARGILL NEWS   27
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