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[PEN-L:1344] THE AGRIBUSINESS EXAMINER - Premiere Edition (fwd)
Forwarded message:
>From avkrebs@xxxxxxxxxxxxx Mon Aug 31 12:24:51 1998
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Date: Mon, 31 Aug 1998 04:50:39 -0700
From: "Albert V. Krebs" <avkrebs@xxxxxxxxxxxxx>
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Subject: THE AGRIBUSINESS EXAMINER - Premiere Edition
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The
AGRIBUSINESS
EXAMINER Premiere Edition
Monitoring corporate agribusiness from a public interest perspective
Editor\Publisher: A.V. Krebs
avkrebs@xxxxxxxxxxxxx
WHEN WILL THE CHICKENS COME HOME TO ROOST?
Much has been made recently in the media about President Bill Clinton's
efforts to bolster the Federal Government's efforts to insure the safety
of the nation's food supply. He has even asked Congress to provide
$101million to deploy more food safety inspectors and new technology,
expand research into the causes of and solutions to food-related
illness, and educate consumers and retail food outlets on the safest
food handling practices.
Nice try Mr. President, but once again the facts of the matter suggest
still more "inappropriate behavior" by the nation's chief executive and
his Arkansas cohorts. For behind those recent headlines still lurks a
scandal that has been conveniently obscured by Monica Lewinsky, Paula
Jones, Ken Starr, Janet Reno et. al., a scandal concerning violating the
public's trust in government relative to the health and safety of the
food supply.
For while the Starr "investigation" has been the headline grabber for
many months now it is the investigation by the "other" independent
counsel, Donald Smaltz, that many believe has the White House more
concerned than a 21-year old intern pleasuring the President of the
United States in the Oval Office.
Pleading guilty to giving former USDA Secretary Mike Espy $12,000 in
illegal gratuities, Tyson Foods, the nation's largest poultry producer,
previously has plead guilt to paying Espy $12,000 in illegal gratuities
and consented to pay the federal government $4 million in fines and $2
million in costs. Tyson chairman Don Tyson and his son John Tyson were
also granted immunity from further prosecution.
While the media was reporting simply that Smaltz's investigation
centered on "favors from large companies with important interests before
the government," court papers stated that at the same time it was
bestowing gifts on Espy, Tyson Foods was urging USDA to go slow on
imposing new meat and poultry handling instructions.
Smaltz's office said prompt imposition of the new rule would have cost
Tyson Foods $30 million, although ultimately a court order blocked
enforcement of the rule. It was also believed that Espy's coziness with
Tyson was the reason he hesitated to remove holdover appointees who
were helping to block stricter regulation of meat and poultry.
Although the White House at the time had no comment on the Tyson plea
many of the Arkansas company's officials have long-standing financial
ties to Bill and Hillary Clinton. When the Tyson family appeared in
court they were accompanied by James Blair, Tyson's corporate counsel
and a close friend of the Clintons who "advised" Hillary Clinton in 1978
on commodities trades that earned her $100,000.
THE DEPARTMENT OF JUSTICE????
In a 1995 meeting with U.S. Attorney General Reno and her top aides
Smaltz sought to expand his probe of Mike Espy to include an allegation
that officials of Tyson Foods, the nation's leading poultry producer,
had delivered cash to then-Arkansas Gov. Bill Clinton. Smaltz, however,
claims he was blocked from doing so by the Attorney General.
Smaltz implied in an interview broadcast on a PBS "Frontline"
documentary dealing with the role of the Independent Counsel that Reno
had succumbed to political pressure in the matter. "My sense was that
Tyson was putting a lot of pressure on the Justice Department," he said.
He claimed that the Arkansas poultry company got Rep. Jay Dickey
(R-Ark.) to go to the department to block his probe.
Smaltz first testified about his dispute with the Justice Department at
a congressional hearing last December. While attributing his problems
not to politics, but to the department's desire to "rein in" the
independence of the outside prosecutors he declined to discuss the Tyson
matter. A few weeks after the hearing, however, Tyson pleaded guilty to
giving $12,000 in gifts to Espy and agreed to pay a $4 million fine and
$2 million to cover investigative expenses.
Smaltz's investigation of Espy has generated controversy ever since his
appointment in September 1994. Yet, he has won 15 convictions and
millions of dollars in fines. Espy was indicted last August on charges
of soliciting gifts worth more than $35,000 from companies he was
supposed to be regulating, including Tyson.
For PBS's interview with Smaltz:
http://www.pbs.org/wgbh/pages/frontline/shows/counsel/smaltz/henrickson.html
Independent Counsel Donald Smaltz's web site can be found at:
http://www.oic.gov/
WORTH REPEATING
Sam Smith, who is living testimony to the fact that muckraking can be an
honorable profession publishes the weekly e-mail PROGRESSIVE REVIEW. In
his July 31, 1998 edition he reflects:
"The White House lawn party -- `sources here have told me' -- is over.
The worst-covered story in modern American history is about to become
unraveled as the White House and the media are forced to confront the
other side of the tale: the evidence.
"The notion that the president is, at worst, guilty of sexual
peccadilloes and little white lies never fit the known facts, but with
the special prosecutor saying so little, we have been treated to weeks
of aggressive codependency between a culpable White House and a gullible
press.
"Were the central character not a president but rather, say, a governor
or organized crime figure, what has happened would fit easily under the
purview of the anti-racketeering RICO statutes -- a criminal conspiracy
to violate the laws of the United States. Consider, for example, crimes
amongst the Clinton organization and those close to it for which
convictions have already been obtained: Drug trafficking (3),
racketeering, extortion, bribery(4), tax evasion, kickbacks,
embezzlement (2), fraud (12), conspiracy (5), fraudulent loans, illegal
gifts(2), illegal campaign contributions(5), money laundering (6),
perjury, and obstruction of justice.
"In addition, possible crimes and issues investigated or raised by
special prosecutors, members of Congress and/or investigative reporters:
bank and mail fraud, violations of campaign finance laws, illegal
foreign campaign funding, improper exports of sensitive technology,
physical violence and threats of violence, solicitation of perjury,
intimidation of witnesses, bribery of witnesses, attempted intimidation
of prosecutors, perjury before congressional committees, lying in
statements to federal investigators and regulatory officials, flight of
witnesses, obstruction of justice, bribery of cabinet members, real
estate fraud, tax fraud, drug trafficking, failure to investigate drug
trafficking, bribery of state officials, use of state police for
personal purposes, exchange of promotions or benefits for sexual favors,
using state police to provide false court testimony, laundering of drug
money through a state agency, false reports by medical examiners and
others investigating suspicious deaths, the firing of the RTC and FBI
director when these agencies were investigating Clinton and his
associates, failure to conduct autopsies in suspicious deaths, providing
jobs in return for silence by witnesses, drug abuse, illegal acquisition
and use of 1000 FBI files, illegal futures trading, murder, sexual abuse
of employees, false testimony before a federal judge, shredding of
documents, withholding and concealment of subpoenaed documents,
fabricated charges against (and improper firing of) White House
employees, as well as providing access to the White House to drug
traffickers, foreign agents and participants in organized crime.
"Now, Kenneth Starr has clearly shown that he does not want to deal with
all of this. He has, for example, turned his back on the Arkansas drug
connection and on the numerous anomalies in the Foster death. He does
not -- and neither do the Republicans in Congress -- wish to open up
areas which might lead to bipartisan involvement, such as the drug
trade, BCCI, and organized crime. Instead, he appears to be attempting
keyhole surgery: making a minor incision that will have a big effect.
Concentrating on crimes such as obstruction of justice and perjury allow
the prosecutor to nail Clinton while not opening up the Pandora's box of
America's endemic political corruption."
The PROGRESSIVE REVIEW, "Washingtonís Most Unofficial Source," is a
service of the Progressive Review: 1739 Conn. Ave. NW Washington DC
20009 202-232-5544 Fax: 202-234-6222 E-mail: ssmith@xxxxxxx Editor:
Sam Smith. The Progressive Review On-Line and its archives are found on
the Web at:
http://emporium.turnpike.net/P/ProRev/
AFTA NAFTA!
A recent General Accounting Office (GAO) study stopped short of
concluding that imported foods are more dangerous than those produced
domestically, but noted that with the increase in food imports from
around the world increasing by 50% in less than a decade, inspectors are
failing to keep pace.
Investigators were particularly harsh on the Food and Drug
Administration (FDA), which the study found was able to inspect only 1.7
percent of 2.7 million shipments of fruit, vegetables, seafood and
processed foods under its jurisdiction. Of the shipments that were
inspected by the FDA, only 16,000 samples underwent a laboratory
analysis for disease-causing organisms or other problems. Meanwhile,
thousands have been sickened in high-profile incidents involving
imported foods, including Guatemalan raspberries, Mexican cantaloupes
and alfalfa sprouts from the Netherlands.
The study by Congress's investigative and auditing agency showed that
more than half of the fish and shellfish eaten by Americans is now
imported. At least one-third of fresh fruit and 12% of vegetables also
are from overseas.
For additional documents and studies of food and agriculture issues see:
Government Accounting Office (GAO)
http://www.gao.gov/
THE PATCHWORK KEEPS GETTING MESSIER
Meanwhile, a recent National Academy of Sciences report shows that while
food safety inspection in the U.S. has always been a patchwork of
programs and agencies as our food supply now becomes more global, as new
bacteria emerge and as American eating habits get more varied, the
patchwork keeps getting messier.
The report on the food safety system counts 35 major statutes and 12
"primary" agencies involved in keeping food safe, including the Food and
Drug Administration, the Centers for Disease Control and parts of the
Agriculture, Commerce and Health and Human Services departments.
As the WASHINGTON POST reports partly in response to this confusion, the
president has just issued an executive order creating a President's
Council on Food Safety -- chaired by Health and Human Services Secretary
Donna Shalala, Agriculture Secretary Dan Glickman and science adviser
Neal Lane -- that will try to pull all these threads together and maybe
even reallocate their famously lopsided and overlapping budgets.
"But the president has another reason for pushing ahead on food safety
issues," the POST rightfully points out, "they have repeatedly proved to
be a political winner, one of those areas where virtually no public
sentiment can be detected for weakening or dismantling government
protections."
One long-standing complaint is the built-in conflict between promoting
and regulating the meat and poultry issues at USDA, which has by far the
most resources for inspection; the FDA, with a more varied industry to
police, has fewer.
In its budget this year, the POST adds, the administration asked for a
chunk of new money that the FDA and others could use for food safety
research and modernization. House and Senate appropriations committees
rebuffed the proposal, but the Senate, in another surprise showing of
the issue's appeal, added $66 million of a requested $100 million in
floor debate. Whether or not new money comes through, the presidential
council could offer some guideposts for the more scientifically based
system the science academy's report calls for.
For more information on food safety see:
National Academy of Sciences
http://www.nas.edu
Food and Drug Administration
http://www.fda.gov/
SPEAKING OF FOOD IMPORTS AND NAFTA
As each day passes it seems that the North American Free Trade Agreement
(NAFTA) is not becoming the great "free trade" panacea that its early
supporters touted.
For example, the actual mechanics of trade between the three signatories
to NAFTA is becoming more costly precisely because there aren't enough
bridges, rails and docks to handle the goods, and existing structures
are often in the wrong places, mired in the traffic of busy downtowns.
The result is hours-long delays for billions of dollars of goods
crossing North American borders.
"This infrastructure was built for a different era," James Giermanski, a
professor at Texas A&M International University in Laredo, told the WALL
STREET JOURNAL. "It's ham stringing the trade."
In 1997 the U.S. had $477 billion in trade with Mexico and Canada, up
13%from 1997 as a flood of goods sough to squeeze through border
bottlenecks spreads of all three nations -- as much as $2.5 billion a
year. Originally NAFTA's much-vaunted potential as a truly open-trading
milieu, was the main selling point for the controversial 1994 pact as
its supporters once advertised, it would become a powerhouse trade bloc
of three closely knit economies.
But "if we're really going to have free trade, you just can't have a
truck waiting in line for five miles," says Bernard LaLonde, professor
emeritus at Ohio State University. "From day to day, you don't know
what's going to happen. It's contrary to the logic of NAFTA."
For U.S. auto companies alone, the JOURNAL reports, one study put the
price of delays at Laredo at almost $3 million annually in wasted time,
higher labor costs and extra storage expenses. "There's not a
flow-through process at the border," says Stephen Harley, a logistics
manager for Ford Motor Co. Ultimately, of course, those extra costs
trickle down to consumers; transportation accounts for 5% to 10% of
retail prices.
Additional information on NAFTA, trade and pending "fast track"
legislation see:
NAFTA & Inter-American Trade Monitor produced by the Institute for
Agriculture and Trade Policy, Mark Ritchie, President. Edited by Mary C.
Turck. Electronic mail versions are available free of charge for
subscribers. For information about fax subscriptions contact: IATP,
2105 1st Ave. S., Minneapolis, MN 55404. Phone: 612-870-0453; fax:
612-870-4846; e-mail: iatp@xxxxxxxxx
http://www.iatp.org
In addition if you want to find out what jobs have been destroyed by
NAFTA check out the NAFTA-TAA page on the Global Trade Watch web site
http://www.tradewatch.org/nafta/naftapg.html
To join the Global Trade Watch list server and keep up to date on trade
policy and politics subscribe to and send this message: "SUBSCRIBE
TW-LIST" [followed by your name, your organizational affiliation and the
state in which you live] to LISTPROC@xxxxxxxxxxxxx
NAFTA: "A DEAL MADE IN NARCO-HEAVEN"
"For Mexico's drug gangs, the NAFTA was a deal made in narco-heaven,"
says Phil Jordan, a former high-level official with the Drug Enforcement
Administration (DEA). "But since both the United States and Mexico are
so committed to free trade, no one wants to admit it has helped the drug
lords. It's a taboo subject. While I was at DEA, I was under strict
orders not to say anything negative about free trade. Now it's come back
to haunt us."
Tracey Eaton of the DALLAS MORNING NEWS reports that sophisticated drug
gangs are investing in everything from trucking companies and rail lines
to warehouses and shipping firms to shield their trafficking activities,
according to a confidential report by Operation Alliance, a task force
led by the U.S. Customs Service.Drug traffickers are using "commercial
trade-related businesses . . . to exploit the rising tide of
cross-border commerce," said the 63-page report, "Drug Trafficking,
Commercial Trade and NAFTA on the Southwest Border."
NAFTA was aimed at wiping out all tariffs among the United States,
Mexico and Canada by 2008. Its supporters say it has been a great
success, doubling to $168 billion trade between Mexico and the United
States.
But, Eaton points out "although many U.S. officials avoid even talking
about potential free-trade/trafficking ties, Mexican smugglers have been
busy hiring consultants to learn how to take advantage of NAFTA, some
former drug agents say." The Operation Alliance report says traffickers
were so enthusiastic about free trade that they began studying its
intricacies even before NAFTA was approved on Jan. 1, 1994.
"If you believe NAFTA has not adversely affected the fight against drug
traffickers, then you must believe in the tooth fairy," said Tom Cash, a
former high-level DEA official.
CONSUMERS RIGHT TO KNOW
In recent Congressional testimony Mike Callicrate, who owns and operates
a cattle feeding operation in Northwest Kansas and is a member of the
Cattleman's Legal Fund, representing cattle producers fighting to
restore free, open and competitive markets in the sale of our cattle,
asked some penetrating questions, questions the American consumer should
be asking each day.
How can we say this food was safe? Do we really know where the food came
from? Do we know under what conditions it was produced? "The answer"
Callicrate concluded, "is NO to all these questions, Iím sorry to
report."
"Shouldn't the consumer have the right to know where his food comes
from, what exactly he is eating, how it is produced and under what
conditions it is grown and processed? I believe consumers do have that
right.
"There has never been a time in our history that labeling and source
verification is more important than today because of this fact. With
problems ranging from illness to death, from Jack in the Box to Hudson
Foods, U.S. beef shipments to Korea, Canadian beef shipments to
Louisiana and most recently the E. coli outbreaks in Georgia and New
York City, consumers and government officials have been continually
reminded of the expanded health risks in todayís new "global" food
economy. Months later, government officials have yet to determine the
source of many of the food-borne illness outbreaks, yet producers and
consumers continue to pay the price of these extremely emotional and
volatile market-breaking news releases.
"When visiting south of the border," Callicrate observes, "we are told
not to drink the water and to peel the fruits and vegetables prior to
eating, while at home we unknowingly feed our children these same
imported foods, potentially contaminated in human waste water, from
areas of poverty and worker exploitation. U.S. producers are banned from
using slave-like labor, non-sustainable practices and unsafe chemicals,
while U.S. consumers unknowingly eat imported meats, fruits and
vegetables grown under these same illegal practices and conditions."
Professor of Sociology at the University of Missouri, Dr. William
Heffernan says, "Powerful multi-national corporations search the globe
for the hungriest people who will work the cheapest and sell the
production in the highest consuming markets." Labeling, inspection,
source verification, safe and sustainable practices are considered
unnecessary costs and barriers to corporate `free' trade. These
companies don't care about people; they only care about profits."
Callicrate adds, "Global corporations, cooperating with food
distributors, blend and grind unsafe, low quality imported product with
domestically produced beef. They will fight to continue this highly
profitable fraud on the consumer. A recent `Dateline' investigation
exposed the practice of blending and hiding other species of meat in
ground beef. This is not only another example of food fraud but also a
serious potential heath hazard, and reminds us of the urgent need for
proper labeling in domestic markets."
He concludes: "The power and influence of these powerful corporations
extends beyond control of production agriculture, processing and
distribution to politics, government law enforcement and regulation.
Government must work to benefit the people instead of the huge
multi-national corporations which have usurped our health and freedoms
with their influence and power.
"Many of the needed laws, like border inspection that could help insure
safe food, are in place but are not being enforced. Mandatory labeling
at the final point of sale must be adopted to give consumers the
information they need to make their own choices. U.S. producers have
invested heavily in and are committed to producing the safest, highest
quality, most consistent supply of food in the world. There will be
problems of course. That's why the ability to identify the source is
critical."
WHAT A SPECTRE WE FACE
The BSE "Mad Cow" problem in Europe, resulting in the destruction of 1.2
million cows and $800 million in losses, is a recent reminder of the
importance of knowing where our food comes from. When IBP meatpackers
shipped E. coli tainted beef to Korea during the last year, thanks to
Korea's labeling law, the problem, when identified, was quickly isolated
and resolved. Otherwise Korean producers and
producers from other sources could have been seriously affected. U.S
farmers and ranchers are denied the same protection at home, thanks to
our government's open border policy. Without labeling, how would U.S.
producers fare if faced with a similar "Mad Cow" crisis?
Callicrate noted that IBP, the nation's largest meat packing company
packer, has the fastest chain speed, the most inexperienced workforce
with the highest worker injury and turnover rate in the business
according to a recent U.S. News and World Report article. "Thus
contaminants and bacteria don't just sneak in," he adds, "? they're
built in. Is it any wonder why E. coli has nearly become synonymous with
IBP? Labeling and source verification is important domestically as well
as globally!
"USDA is failing in its current responsibilities. Inspection practices
are flawed. New programs like HACCP (self-inspection) are irresponsible.
Practices like irradiation are the wrong solution, essentially covering
up problems while being cost-prohibitive to most small processors,
further reducing competition and empowering the already too powerful big
packers. One Texas farmer commenting about irradiation explained,
`Whole Hog (literally) sausage is now a real possibility.' What a
spectre we face!"
For information on the Cattleman's Legal Fund Headlines see:
http://www.nobull.net/legal/right.htm
"IT'S A FLU; IT'S CATCHING; IT'S DOMINOES"
Writing in the August 28, 1998 edition of the NEW YORK TIMES business
reporter Jonathan Fuerbringer notes that while global stock markets
recently have been plunging, a major index of commodity prices, on
products from oil to cotton have fallen to their lowest level in 21
years which he concludes may be more worrisome for investors in the long
run than the dramatic decline in the Dow Jones industrial average.
Already, he reports commodity prices have fallen 20% in the last year
and heightened concern about the economies and markets of developing
nations that began with Asian currency selloffs in the second half of
1997. "It's a flu, it's catching; it's dominoes,"said William Byers,
director of futures research at Bear, Stearns & Co. "Not only is the
psychology spreading, but the economic weakness is spreading."
But, he notes, "for the American investor worried about the strength of
the economy, which by all current signs is still strong, and corporate
earnings, which have been weakening, so far the fall in commodity prices
and the drop in interest rates have been good news. The lower prices for
commodities, while tough on emerging-market and other producing nations,
have lowered corporate costs here and spurred consumer
spending. And the damage that had been done to commodity producers in
the United States has not had a big impact on the economy."
Two forces, Fuerbringer reasons, have been pushing commodity prices
lower and will continue to do so. "One is the falling demand
from Asian nations, which, for example, were major consumers of copper
for new construction. The other is that countries in deep trouble, like
Russia, are expected to sell what they can to raise money, adding to the
supply in an already weak market. . . . This all means that commodity
prices -- and the pain that they are bringing to already troubled
economies -- still have a way to go before they hit bottom. `I don't
think we are there yet,' Richard Berner, chief economist of Mellon Bank
in Pittsburgh, said."
A NEVER ENDING SCANDAL IN THE FIELDS
A federal Commission on Agricultural Workers estimates that there are
2.5 million farm workers in the U.S., up from 1.8 million in 1960. About
800,000 of the current workers lack adequate shelter, according to the
Housing Assistance Council, a Washington-based consulting group that
studies rural housing.
Because the nation's agricultural work force in recent years has changed
so dramatically it now makes it more difficult for the government to
improve the workers' living conditions, whether by providing housing
itself or pressuring growers to improve the housing they provide. Once
composed mainly of U.S. citizens, the work force is now largely composed
of immigrants from Mexico and Central America, 40% of them here
illegally. Many of these workers leave their families behind, coming
with the goal of returning home as much of their earnings as possible.
Because it is possible for them to earn up to ten times what they can at
home, these workers are willing to tolerate living conditions and wages
that few American workers would accept. Such an economic imperative is
so powerful that it has assured a plentiful supply of migrants even as
real farm wages have fallen by more than ten percent in the last 20
years.
"The root of the problem is there is an oversupply of farm workers,"said
Bruce Goldstein, executive director of the Farmworker Justice Fund, a
Washington-based advocacy group, told the NEW YORK TIMES.
In the past decade, the TIMES reports, the federal and state
governments, working with growers, have built tens of thousands of
housing units for migrants. But those units usually go to families,
citizens and legal immigrants, rarely benefiting several large groups
facing the worst circumstances: single men and women, illegal immigrants
and workers who move from harvest to harvest.
For more information on the plight of the nation's farmworkers see:
Farmworker Justice Fund, Inc.
1111 19th Street N.W., Suite 1000
Washington, DC 20036
(202) 776-1757 voice / (202) 776-1792 fax
Shelly Davis and Bruce Goldstein, Co-Directors
A national farmworker advocacy organization which provides policy
analysis and technical assistance to migrant health centers, policy
makers, researchers, and attorneys on farmworker occupational health
issues.
BILL'S BILLS
Speaking of housing for the poor as of August 30, 1998 Microsoft's Bill
Gates wealth was at $58.06 billion, that billion with a "B." Habitat for
Humanity estimates that it costs them $30,000 to build a four-person
home (labor being volunteered). With Bill's bills they could construct
some 1,935,314 homes housing 8,708,914 persons.
If you want to track Bill Gates' wealth on an hour-by-hour basis go to:
http://www.quuxuum.org/~evan/bgnw.html
"THAT'S THE WAY TO GET THERE IN ONE BITE!"
"Every indication we have is that it is very, very close," said one
stock trader. "We are 1,000% sure. Smart people do believe it a lot - a
lot."
Judging from such comments of stock traders, options strategists and
securities analysts strength in recent trading sessions indicates that a
major merger is eminent in which the Pleasanton, Calif. headquartered
Safeway Stores, Inc. would buy the larger Cincinnati-based Kroger Co.
"The market's telling us this is a done deal," says Jonathan H.
Ziegler, an analyst who follows the supermarket sector for Salomon
Smith Barney. "I'm thinking that any day there could be an
announcement."
Safeway's buying up of Kroger would be the latest - and largest - in a
string of supermarket mergers which has recently seen Albertson's Inc.
announced plans to
buy the bigger but weaker American Stores Co. for $11.7 billion which
pushes the Salt Lake City, Utah market chain ahead of Kroger in terms of
sales.
That merger immediately prompted other major grocery chains, including
Safeway, to take a harder, closer look at their long-term plans, some
observers said. Such wide-spread consolidation comes at a time when
supermarket chains are seeking to increase their buying power. A
Safeway-Kroger merger would also enable the slightly smaller Safeway to
build a national brand, which it has long sought to do.
With more than 2,100 grocery and convenience stores, Kroger, the
nation's second-largest food retailer, has expected sales of $28
billion this year. Compare that with Safeway, which arguably is the No.
3 player, with $23.8 billion in estimated sales from almost 1,400
supermarkets in the U.S. and Canada. Kroger would offer Safeway market
leadership in areas like the Southeast, Dallas, Houston and Michigan.
There would be severe overlap in markets such as Colorado and Phoenix,
but together they would cover about 70% of those markets.
"If it does want to be the biggest supermarket in the country, Safeway
would have to buy Kroger," said Ziegler, the Salmon Smith Barney
analyst."That's the way to get there in one bite."
Additional corporation information on Safeway Inc. and Kroger Inc. can
be seen at:
Safeway Inc.
http://www.sec.gov/Archives/edgar/data/86144/0000950149-98-000481.txt
Kroger Inc.
http://www.sec.gov/Archives/edgar/data/56873/0000950131-98-001893.txt
PERSISTENT RUMOR
Recently Cargill Inc., the nation's largest private corporation and the
world's leading grain trader, and Monsanto Co. announced the signing of
a letter of intent to form a worldwide joint venture to create and
market new products enhanced through biotechnology for the grain
processing and animal feed markets. The 50-50 joint venture would draw
from Monsanto's capabilities in genomics, biotechnology and seeds and
from Cargill's global agricultural input, processing and marketing
infrastructure to develop and market new products. Subsequently, Cargill
would announce that it was selling its foreign seed operations to
Monsanto for $1.4 billion.
Even more stunning news, however, came soon after the Cargill-Monsanto
agreement when it was announced on June 1 that American Home Products,
the East Coast-based drugs and pharmaceutical group, will, in effect,
take over Monsanto in a $34 billion merger thereby creating a
broad-based "life sciences" megacomplex encompassing pharmaceuticals,
agricultural products and food ingredients. The combined stock market
valuation of the two companies is $96 billion.
Hope Shand of Rural Advancement Find International in Pittsboro, N.C.,
has been relentlessly tracking developments in the biotech industry for
several years. She observes that when Monsanto's other seed company
acquisitions are added up - the
"Monster" may now occupy the number two position in the sale of all crop
seed worldwide. The merger with AHP in June also instantly created the
world's largest crop chemicals company. "Put this together with the
`Monster's' number two post in seeds, its number seven rank in
pharmaceuticals, and its fifth position in veterinary medicines, and the
Life industry will never be the same. It is only a matter of time
before DuPont, Novartis, or Glaxo-Wellcome strike back."
Well, Shand's prediction may soon come true for since the announcement
of the Monsanto-Cargill joint marketing agreement rumors persist among
investors that DuPont, Monsanto's arch-rival, is seeking a possible
merger-acquisiton with Cargill's chief competitor, ADM, corporate
agribusiness's "Supermarkup to the World." Meanwhile ADM has recently
increased its stock holdings in IBP, the nation's largest meatpacker to
13.33%.
"Seed Industry Consolidation: Who Owns Whom ?" the Rural Advancement
Foundation International's (RAFI) RAFI Communique July/August 1998
which includes a gigantic new industry consolidation chart, listing
over 275 companies and their subsidiaries, showing who owns whom and
features new industry rankings based on the latest wave of mergers and
acquisitions can be viewed at:
http://www.rafi.ca/communique/
"AGRICULTURE IS ABOUT TO GET VERY SMALL"
Systemically still suffering the consequences of the 1980ís "farm debt
crisis," victimized once again by the devious and hollow promises of a
"get rich" export policy, unpredictable weather, below cost of
production commodity prices, a corporate-engineered federal farm policy
that enslaves family farmers rather than frees them to farm, all have
effectively conspired to dim if not totally darken farm yard lights
throughout our land.
But, if we are to believe Steve Baker, Vice-President of Marketing,
Research and Development for Agribank, a large Midwestern co-op bank
consortium with multibillions in farm credit assets, things within the
next three to five years are going to get a lot worse for the majority
of America's family farms and a whole lot better for a small , very
small, number of corporate agribusinesses.
In a May teleconference before extension agents attached to Clemson
University in South Carolina, Baker outlined in an 60 minute
presentation, "Agribusiness Is About to Get Very Small," how in a very
few years three giant megacomplexes will totally dominate corporate
agribusiness and agriculture and those involved in agriculture will fall
into three distinct categories:
1. Reinventors - those who will "reinvent" their businesses to keep up
with the changes or start new enterprises based on "new opportunities."
2. Disllusionists - those who will make cosmetic changes, but continue
to do business as usual.
3. Hospice care group - the walking dead, those denying that "change" is
happening, who will linger on in some niche group or else just give up
and get out of agriculture.
The new model of farming --- contracting with large megacomplexes to
produce crops with a specific design for a specific purpose --- by the
year 2000, Baker notes, will see from 50% to 60% of all crops in the
Midwest under contract; 88% of hogs, 65% of dairies, and 44% of all
beef.
Baker also sees, based on interviews his bank conducted with some 60,000
farmers and over 300 CEO's from agribusinesses up and down the food
chain, the current 400,000 agribusinesses which supply the farmer (feed,
seeds, chemical poisons, consultants, etc.) being eliminated or coming
under the umbrella of three megacomplexes --- Monsanto, DuPont and
Novartis. He believes that the domination of these three in research,
while spending billions each year, means that no one else will be able
to keep pace. In 1990, he notes, there were 30 biotech companies, today
there are seven --- "primary intellectual capital" --- ones.
Baker believes the key implications of what he sees as something "far
more exciting" than agriculture --- "life sciences" or "prescription
agriculture" --- are:
1. Massive flows of capital coming into play; currently $80 billion is
being annually spent on food and life sciences research in the U.S.
alone.
2. Food chain consolidation will continue to happen rapidly.
3. The key players will have to get their solutions to market and get a
return on those "solutions" as quickly as possible to satisfy their
stockholders.
4. There will be "the blood of `middle men' in the streets in all
sectors."
Video tape copies of "Agriculture Is About to Get Very Small" are
available through Telemedia, 153 Grace Drive, Easley, S.C. 29640; phone:
(864) 269-7744 or 1-800-76VIDEO; fax: (864-269-7618.
Bon appetit !!!
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<FONT SIZE=+1>The</FONT>
<BR><FONT SIZE=+2>AGRIBUSINESS</FONT>
<BR><FONT SIZE=+2>EXAMINER
</FONT>Premiere Edition<FONT SIZE=+2></FONT>
<P><I>Monitoring corporate agribusiness from a public interest perspective</I><I></I>
<P>Editor\Publisher: A.V. Krebs
<BR>avkrebs@xxxxxxxxxxxxx
<BR> <FONT SIZE=+1></FONT>
<P><FONT SIZE=+1>WHEN WILL THE CHICKENS COME HOME TO ROOST?</FONT>
<P>Much has been made recently in the media about President Bill Clinton's
efforts to bolster the Federal Government's efforts to insure the safety
of the nation's food supply. He has even asked Congress to provide
$101million to deploy more food safety inspectors and new technology, expand
research into the causes of and solutions to food-related illness, and
educate consumers and retail food outlets on the safest food handling practices.
<P>Nice try Mr. President, but once again the facts of the matter suggest
still more "inappropriate behavior" by the nation's chief executive and
his Arkansas cohorts. For behind those recent headlines still lurks a scandal
that has been conveniently obscured by Monica Lewinsky, Paula Jones, Ken
Starr, Janet Reno et. al., a scandal concerning violating the public's
trust in government relative to the health and safety of the food supply.
<P>For while the Starr "investigation" has been the headline grabber for
many months now it is the investigation by the "other" independent
counsel, Donald Smaltz, that many believe has the White House more concerned
than a 21-year old intern pleasuring the President of the United States
in the Oval Office.
<P>Pleading guilty to giving former USDA Secretary Mike Espy $12,000 in
illegal gratuities, Tyson Foods, the nation's largest poultry producer,
previously has plead guilt to paying Espy $12,000 in illegal gratuities
and consented to pay the federal government $4 million in fines and $2
million in costs. Tyson chairman Don Tyson and his son John Tyson were
also granted immunity from further prosecution.
<P>While the media was reporting simply that Smaltz's investigation centered
on "favors from large companies with important interests before the government,"
court papers stated that at the same time it was bestowing gifts on Espy,
Tyson Foods was urging USDA to go slow on imposing new meat and poultry
handling instructions.
<P>Smaltz's office said prompt imposition of the new rule would have cost
Tyson Foods $30 million, although ultimately a court order blocked enforcementdrug connection and on the numerous anomalies in the Foster death. He does
not -- and neither do the Republicans in Congress -- wish to open up areas
which might lead to bipartisan involvement, such as the drug trade, BCCI,
and organized crime. Instead, he appears to be attempting keyhole surgery:
making a minor incision that will have a big effect. Concentrating on crimes
such as obstruction of justice and perjury allow the prosecutor to nail
Clinton while not opening up the Pandora's box of America's endemic political
corruption."
<P>The PROGRESSIVE REVIEW, "Washington?s Most Unofficial Source," is a
service of the Progressive Review: 1739 Conn. Ave. NW Washington DC 20009
202-232-5544 Fax: 202-234-6222 E-mail: ssmith@xxxxxxx Editor:
Sam Smith. The Progressive Review On-Line and its archives are found on
the Web at:
<BR><A HREF="http://emporium.turnpike.net/P/ProRev/";>http://emporium.turnpike.net/P/ProRev/</A>
<P><FONT SIZE=+1>AFTA NAFTA!</FONT>
<P>A recent General Accounting Office (GAO) study stopped short of concluding
that imported foods are more dangerous than those produced domestically,
but noted that with the increase in food imports from around the
world increasing by 50% in less than a decade, inspectors are failing to
keep pace.
<P>Investigators were particularly harsh on the Food and Drug Administration
(FDA), which the study found was able to inspect only 1.7 percent of 2.7
million shipments of fruit, vegetables, seafood and processed foods under
its jurisdiction. Of the shipments that were inspected by the FDA, only
16,000 samples underwent a laboratory analysis for disease-causing organisms
or other problems. Meanwhile, thousands have been sickened in high-profile
incidents involving imported foods, including Guatemalan raspberries, Mexican
cantaloupes and alfalfa sprouts from the Netherlands.
<P>The study by Congress's investigative and auditing agency showed that
more than half of the fish and shellfish eaten by Americans is now imported.
At least one-third of fresh fruit and 12% of vegetables also are from overseas.
<P>For additional documents and studies of food and agriculture issues
see:
<BR>Government Accounting Office (GAO)
<BR><A HREF="http://www.gao.gov/";>http://www.gao.gov/</A><FONT SIZE=+1></FONT>
<P><FONT SIZE=+1>THE PATCHWORK KEEPS GETTING MESSIER</FONT>
<P>Meanwhile, a recent National Academy of Sciences report shows that while
food safety inspection in the U.S. has always been a patchwork of
programs and agencies as our food supply now becomes more global, as new
bacteria emerge and as American eating habits get more varied, the patchwork
keeps getting messier.
<P>The report on the food safety system counts 35 major statutes and 12
"primary" agencies involved in keeping food safe, including the Food and
Drug Administration, the Centers for Disease Control and parts of the Agriculture,
Commerce and Health and Human Services departments.
<P>As the WASHINGTON POST reports partly in response to this confusion,
the president has just issued an executive order creating a President's
Council on Food Safety -- chaired by Health and Human Services Secretary
Donna Shalala, Agriculture Secretary Dan Glickman and science adviser Neal
Lane -- that will try to pull all these threads together and maybe even
reallocate their famously lopsided and overlapping budgets.
<P>"But the president has another reason for pushing ahead on food safety
issues," the POST rightfully points out, "they have repeatedly proved to
be a political winner, one of those areas where virtually no public sentiment
can be detected for weakening or dismantling government protections."
<BR>
<BR>One long-standing complaint is the built-in conflict between promoting
and regulating the meat and poultry issues at USDA, which has by far the
most resources for inspection; the FDA, with a more varied industry to
police, has fewer.
<P>In its budget this year, the POST adds, the administration asked
for a chunk of new money that the FDA and others could use for food safety
research and modernization. House and Senate appropriations committees
rebuffed the proposal, but the Senate, in another surprise showing of the
issue's appeal, added $66 million of a requested $100 million in
floor debate. Whether or not new money comes through, the presidential
council could offer some guideposts for the more scientifically based system
the science academy's report calls for.
<P>For more information on food safety see:
<BR>National Academy of Sciences
<BR><A HREF="http://www.nas.edu";>http://www.nas.edu</A>
<BR>Food and Drug Administration
<BR><A HREF="http://www.fda.gov/";>http://www.fda.gov/</A>
<P><FONT SIZE=+1>SPEAKING OF FOOD IMPORTS AND NAFTA</FONT>
<P>As each day passes it seems that the North American Free Trade Agreement
(NAFTA) is not becoming the great "free trade" panacea that its early supporters
touted.
<P>For example, the actual mechanics of trade between the three signatories
to NAFTA is becoming more costly precisely because there aren't enough
bridges, rails and docks to handle the goods, and existing structures are
often in the wrong places, mired in the traffic of busy downtowns. The
result is hours-long delays for billions of dollars of goods crossing North
American borders.
<P>"This infrastructure was built for a different era," James Giermanski,
a professor at Texas A&M International University in Laredo, told the
WALL STREET JOURNAL. "It's ham stringing the trade."
<P>In 1997 the U.S. had $477 billion in trade with Mexico and Canada, up
13%from 1997 as a flood of goods sough to squeeze through border bottlenecks
spreads of all three nations -- as much as $2.5 billion a year. Originally
NAFTA's much-vaunted potential as a truly open-trading milieu, was the
main selling point for the controversial 1994 pact as its supporters once
advertised, it would become a powerhouse trade bloc of three closely knit
economies.
<BR>
<BR>But "if we're really going to have free trade, you just can't have
a truck waiting in line for five miles," says Bernard LaLonde, professor
emeritus at Ohio State University. "From day to day, you don't know what's
going to happen. It's contrary to the logic of NAFTA."
<BR>
<BR>For U.S. auto companies alone, the JOURNAL reports, one study put the
price of delays at Laredo at almost $3 million annually in wasted time,
higher labor costs and extra storage expenses. "There's not a flow-through
process at the border," says Stephen Harley, a logistics manager for Ford
Motor Co. Ultimately, of course, those extra costs trickle down to consumers;
transportation accounts for 5% to 10% of retail prices.
<P>Additional information on NAFTA, trade and pending "fast track" legislation
see:
<BR>NAFTA & Inter-American Trade Monitor produced by the
Institute for Agriculture and Trade Policy, Mark Ritchie, President.
Edited by Mary C. Turck. Electronic mail versions are available
free of charge for subscribers. For information about fax subscriptions
contact: IATP, 2105 1st Ave. S., Minneapolis, MN 55404.
Phone: 612-870-0453; fax: 612-870-4846; e-mail: iatp@xxxxxxxxx
<BR><A HREF="http://www.iatp.org";>http://www.iatp.org</A>
<P>In addition if you want to find out what jobs have been destroyed by
NAFTA check out the NAFTA-TAA page on the Global Trade Watch web site
<BR><A HREF="http://www.tradewatch.org/nafta/naftapg.html";>http://www.tradewatch.org/nafta/naftapg.html</A>
<P>To join the Global Trade Watch list server and keep up to date on trade
policy and politics subscribe to and send this message: "SUBSCRIBE TW-LIST"
[followed by your name, your organizational affiliation and the state in
which you live] to LISTPROC@xxxxxxxxxxxxx
<P><FONT SIZE=+1>NAFTA: "A DEAL MADE IN NARCO-HEAVEN"</FONT>
<P>"For Mexico's drug gangs, the NAFTA was a deal made in narco-heaven,"
says Phil Jordan, a former high-level official with the Drug Enforcement
Administration (DEA). "But since both the United States and Mexico are
so committed to free trade, no one wants to admit it has helped the drug
lords. It's a taboo subject. While I was at DEA, I was under strict orders
not to say anything negative about free trade. Now it's come back to haunt
us."
<P>Tracey Eaton of the DALLAS MORNING NEWS reports that sophisticated drug
gangs are investing in everything from trucking companies and rail lines
to warehouses and shipping firms to shield their trafficking activities,
according to a confidential report by Operation Alliance, a task force
led by the U.S. Customs Service.Drug traffickers are using "commercial
trade-related businesses . . . to exploit the rising tide of cross-border
commerce," said the 63-page report, "Drug Trafficking, Commercial Trade
and NAFTA on the Southwest Border."
<P>NAFTA was aimed at wiping out all tariffs among the United States, Mexico
and Canada by 2008. Its supporters say it has been a great success, doubling
to $168 billion trade between Mexico and the United States.
<P>But, Eaton points out "although many U.S. officials avoid even talking
about potential free-trade/trafficking ties, Mexican smugglers have been
busy hiring consultants to learn how to take advantage of NAFTA, some former
drug agents say." The Operation Alliance report says traffickers were so
enthusiastic about free trade that they began studying its intricacies
even before NAFTA was approved on Jan. 1, 1994.
<P>"If you believe NAFTA has not adversely affected the fight against drug
traffickers, then you must believe in the tooth fairy," said Tom Cash,
a former high-level DEA official.
<P><FONT SIZE=+1>CONSUMERS RIGHT TO KNOW</FONT>
<P>In recent Congressional testimony Mike Callicrate, who owns and operates
a cattle feeding operation in Northwest Kansas and is a member of the Cattleman's
Legal Fund, representing cattle producers fighting to restore free, open
and competitive markets in the sale of our cattle, asked some penetrating
questions, questions the American consumer should be asking each day.
<P>How can we say this food was safe? Do we really know where the food
came from? Do we know under what conditions it was produced? "The
answer" Callicrate concluded, "is NO to all these questions, I?m sorry
to report."
<P>"Shouldn't the consumer have the right to know where his food comes
from, what exactly he is eating, how it is produced and under what conditions
it is grown and processed? I believe consumers do have that right.
<P>"There has never been a time in our history that labeling and source
verification is more important than today because of this fact. With problems
ranging from illness to death, from Jack in the Box to Hudson Foods, U.S.
beef shipments to Korea, Canadian beef shipments to Louisiana and most
recently the E. coli outbreaks in Georgia and New York City, consumers
and government officials have been continually reminded of the expanded
health risks in today?s new "global" food economy. Months later,
government officials have yet to determine the source of many of the food-borne
illness outbreaks, yet producers and consumers continue to pay the price
of these extremely emotional and volatile market-breaking news releases.
<P>"When visiting south of the border," Callicrate observes, "we are told
not to drink the water and to peel the fruits and vegetables prior to eating,
while at home we unknowingly feed our children these same imported foods,
potentially contaminated in human waste water, from areas of poverty and
worker exploitation. U.S. producers are banned from using slave-like labor,
non-sustainable practices and unsafe chemicals,
<BR>while U.S. consumers unknowingly eat imported meats, fruits and vegetables
grown under these same illegal practices and conditions."
<P>Professor of Sociology at the University of Missouri, Dr. William Heffernan
says, "Powerful multi-national corporations search the globe for the hungriest
people who will work the cheapest and sell the production in the highest
consuming markets." Labeling, inspection, source verification, safe and
sustainable practices are considered unnecessary costs and barriers to
corporate `free' trade. These companies don't care about people;
they only care about profits."
<P>Callicrate adds, "Global corporations, cooperating with food distributors,
blend and grind unsafe, low quality imported product with domestically
produced beef. They will fight to continue this highly profitable fraud
on the consumer. A recent `Dateline' investigation exposed
the practice of blending and hiding other species of meat in ground beef.
This is not only another example of food fraud but also a serious potential
heath hazard, and reminds us of the urgent need for proper labeling in
domestic markets."
<P>He concludes: "The power and influence of these powerful corporations
extends beyond control of production agriculture, processing and distribution
to politics, government law enforcement and regulation. Government must
work to benefit the people instead of the huge multi-national corporations
which have usurped our health and freedoms with their influence and power.
<P>"Many of the needed laws, like border inspection that could help insure
safe food, are in place but are not being enforced. Mandatory
labeling at the final point of sale must be adopted to give consumers the
information they need to make their own choices. U.S. producers have invested
heavily in and are committed to producing the safest, highest quality,
most consistent supply of food in the world. There will be problems of
course. That's why the ability to identify the source is critical."
<P><FONT SIZE=+1>WHAT A SPECTRE WE FACE</FONT>
<P>The BSE "Mad Cow" problem in Europe, resulting in the destruction of
1.2 million cows and $800 million in losses, is a recent reminder of the
importance of knowing where our food comes from. When IBP meatpackers
shipped E. coli tainted beef to Korea during the last year, thanks to Korea's
labeling law, the problem, when identified, was quickly isolated and resolved.
Otherwise Korean producers and
<BR>producers from other sources could have been seriously affected. U.S
farmers and ranchers are denied the same protection at home, thanks to
our government's open border policy. Without labeling, how would
U.S. producers fare if faced with a similar "Mad Cow" crisis?
<P>Callicrate noted that IBP, the nation's largest meat packing company
packer, has the fastest chain speed, the most inexperienced workforce with
the highest worker injury and turnover rate in the business according to
a recent U.S. News and World Report article. "Thus contaminants and bacteria
don't just sneak in," he adds, "­ they're built in. Is it any wonder
why E. coli has nearly become synonymous with IBP? Labeling and source
verification is important domestically as well as globally!
<P>"USDA is failing in its current responsibilities. Inspection practices
are flawed. New programs like HACCP (self-inspection) are irresponsible.
Practices like irradiation are the wrong solution, essentially covering
up problems while being cost-prohibitive to most small processors, further
reducing competition and empowering the already too powerful big packers.
One Texas farmer commenting about irradiation explained,
<BR>`Whole Hog (literally) sausage is now a real possibility.' What
a spectre we face!"
<P>For information on the Cattleman's Legal Fund Headlines see:
<BR><A HREF="http://www.nobull.net/legal/right.htm";>http://www.nobull.net/legal/right.htm</A>
<P><FONT SIZE=+1>"IT'S A FLU; IT'S CATCHING; IT'S DOMINOES"</FONT>
<P>Writing in the August 28, 1998 edition of the NEW YORK TIMES business
reporter Jonathan Fuerbringer notes that while global stock markets recently
have been plunging, a major index of commodity prices, on products from
oil to cotton have fallen to their lowest level in 21 years which
he concludes may be more worrisome for investors in the long run than the
dramatic decline in the Dow Jones industrial average.
<P>Already, he reports commodity prices have fallen 20% in the last year
and heightened concern about the economies and markets of developing nations
that began with Asian currency selloffs in the second half of 1997. "It's
a flu, it's catching; it's dominoes,"said William Byers, director of futures
research at Bear, Stearns & Co. "Not only is the psychology spreading,
but the economic weakness is spreading."
<P>But, he notes, "for the American investor worried about the strength
of the economy, which by all current signs is still strong, and corporate
earnings, which have been weakening, so far the fall in commodity prices
and the drop in interest rates have been good news. The lower prices for
commodities, while tough on emerging-market and other producing nations,
have lowered corporate costs here and spurred consumer
spending. And the damage that had been done to commodity producers in the
United States has not had a big impact on the economy."
<P>Two forces, Fuerbringer reasons, have been pushing commodity prices
lower and will
continue to do so. "One is the falling demand from Asian nations, which,
for example, were major consumers of copper for new construction. The other
is that countries in deep trouble, like Russia, are expected to sell what
they can to raise money, adding to the supply in an already weak market.
.. . . This all means that commodity prices -- and the pain
that they are bringing to already troubled economies -- still have a way
to go before they hit bottom. `I don't think we are there yet,' Richard
Berner, chief economist of Mellon Bank in Pittsburgh, said."
<P><FONT SIZE=+1>A NEVER ENDING SCANDAL IN THE FIELDS</FONT>
<P>A federal Commission on Agricultural Workers estimates that there are
2.5 million farm workers in the U.S., up from 1.8 million in 1960. About
800,000 of the current workers lack adequate shelter, according to the
Housing Assistance Council, a Washington-based consulting group that studies
rural housing.
<P>Because the nation's agricultural work force in recent years has changed
so dramatically it now makes it more difficult for the government to improve
the workers' living conditions, whether by providing housing itself or
pressuring growers to improve the housing they provide. Once composed mainly
of U.S. citizens, the work force is now largely composed of immigrants
from Mexico and Central America, 40% of them here illegally. Many of these
workers leave their families behind, coming with the goal of returning
home as much of their earnings as possible.
<P>Because it is possible for them to earn up to ten times what they can
at home, these workers are willing to tolerate living conditions and wages
that few American workers would accept. Such an economic imperative is
so powerful that it has assured a plentiful supply of migrants even as
real farm wages have fallen by more than ten percent in the last 20 years.
<P>"The root of the problem is there is an oversupply of farm workers,"said
Bruce Goldstein, executive director of the Farmworker Justice Fund, a Washington-based
advocacy group, told the NEW YORK TIMES.
<P>In the past decade, the TIMES reports, the federal and state governments,
working with growers, have built tens of thousands of housing units for
migrants. But those units usually go to families, citizens and legal immigrants,
rarely benefiting several large groups facing the worst circumstances:
single men and women, illegal immigrants and workers who move from harvest
to harvest.
<P>For more information on the plight of the nation's farmworkers see:
<BR>Farmworker Justice Fund, Inc.
<BR>1111 19th Street N.W., Suite 1000
<BR>Washington, DC 20036
<BR>(202) 776-1757 voice / (202) 776-1792 fax
<BR>Shelly Davis and Bruce Goldstein, Co-Directors
<BR>A national farmworker advocacy organization which provides policy analysis
and technical assistance to migrant health centers, policy makers, researchers,
and attorneys on farmworker occupational health issues.
<P><FONT SIZE=+1>BILL'S BILLS</FONT>
<P>Speaking of housing for the poor as of August 30, 1998 Microsoft's Bill
Gates wealth was at $58.06 billion, that billion with a "B." Habitat for
Humanity estimates that it costs them $30,000 to build a four-person home
(labor being volunteered). With Bill's bills they could construct some
1,935,314 homes housing 8,708,914 persons.
<P>If you want to track Bill Gates' wealth on an hour-by-hour basis go
to:
<BR><A HREF="http://www.quuxuum.org/~evan/bgnw.html";>http://www.quuxuum.org/~evan/bgnw.html</A>
<P><FONT SIZE=+1>"THAT'S THE WAY TO GET THERE IN ONE BITE!"</FONT>
<P>"Every indication we have is that it is very, very close," said
one stock trader. "We are 1,000% sure. Smart people do believe it
a lot - a lot."
<P>Judging from such comments of stock traders, options strategists and
securities analysts strength in recent trading sessions indicates that
a major merger is eminent in which the Pleasanton, Calif. headquartered
Safeway Stores, Inc. would buy the larger Cincinnati-based Kroger Co.
<P>"The market's telling us this is a done deal," says Jonathan H.
Ziegler, an analyst who follows the supermarket sector for Salomon
Smith Barney. "I'm thinking that any day there could be an announcement."
<P>Safeway's buying up of Kroger would be the latest - and largest - in
a string of supermarket mergers which has recently seen Albertson's
Inc. announced plans to
<BR>buy the bigger but weaker American Stores Co. for $11.7 billion which
pushes the Salt Lake City, Utah market chain ahead of Kroger in terms of
sales.
<P>That merger immediately prompted other major grocery chains, including
Safeway, to take a harder, closer look at their long-term plans,
some observers said. Such wide-spread consolidation comes at a time when
supermarket chains are seeking to increase their buying power. A
Safeway-Kroger merger would also enable the slightly smaller Safeway to
build a national brand, which it has long sought to do.
<P>With more than 2,100 grocery and convenience stores, Kroger, the
nation's second-largest food retailer, has expected sales of $28
billion this year. Compare that with Safeway, which arguably is the
No. 3 player, with $23.8 billion in estimated sales from almost 1,400
supermarkets in the U.S. and Canada. Kroger would offer Safeway market
leadership in areas like the Southeast, Dallas, Houston and Michigan. There
would be severe overlap in markets such as Colorado and Phoenix,
but together they would cover about 70% of those markets.
<P>"If it does want to be the biggest supermarket in the country, Safeway
would have to buy Kroger," said Ziegler, the Salmon Smith Barney analyst."That's
the way to get there in one bite."
<P>Additional corporation information on Safeway Inc. and Kroger Inc. can
be seen at:
<BR>Safeway Inc.
<BR><A HREF="http://www.sec.gov/Archives/edgar/data/86144/0000950149-98-000481.txt";>http://www.sec.gov/Archives/edgar/data/86144/0000950149-98-000481.txt</A>
<BR>Kroger Inc.
<BR><A HREF="http://www.sec.gov/Archives/edgar/data/56873/0000950131-98-001893.txt";>http://www.sec.gov/Archives/edgar/data/56873/0000950131-98-001893.txt</A>
<P><FONT SIZE=+1>PERSISTENT RUMOR</FONT>
<P>Recently Cargill Inc., the nation's largest private corporation and
the world's leading grain trader, and Monsanto Co. announced the
signing of a letter of intent to form a worldwide joint venture to create
and market new products enhanced through biotechnology for the grain processing
and animal feed markets. The 50-50 joint venture would draw from Monsanto's
capabilities in genomics, biotechnology and seeds and from Cargill's global
agricultural input, processing and marketing infrastructure to develop
and market new products. Subsequently, Cargill would announce that it was
selling its foreign seed operations to Monsanto for $1.4 billion.
<P>Even more stunning news, however, came soon after the Cargill-Monsanto
agreement when it was announced on June 1 that American Home Products,
the East Coast-based drugs and pharmaceutical group, will, in effect,
take over Monsanto in a $34 billion merger thereby creating
a broad-based "life sciences" megacomplex encompassing pharmaceuticals,
agricultural products and food ingredients. The combined stock market valuation
of the two companies is $96 billion.
<P>Hope Shand of Rural Advancement Find International in Pittsboro, N.C.,
has been relentlessly tracking developments in the biotech industry for
several years. She observes that when Monsanto's other seed company acquisitions
are added up - the
<BR>"Monster" may now occupy the number two position in the sale of all
crop seed worldwide. The merger with AHP in June also instantly created
the world's largest crop chemicals company. "Put this together with the
`Monster's' number two post in seeds, its number seven rank in pharmaceuticals,
and its fifth position in veterinary medicines, and the Life industry will
never be the same. It is only a matter of time before DuPont, Novartis,
or Glaxo-Wellcome strike back."
<P>Well, Shand's prediction may soon come true for since the announcement
of the Monsanto-Cargill joint marketing agreement rumors persist
among investors that DuPont, Monsanto's arch-rival, is seeking a possible
merger-acquisiton with Cargill's chief competitor, ADM, corporate agribusiness's
"Supermarkup to the World." Meanwhile ADM has recently increased its stock
holdings in IBP, the nation's largest meatpacker to 13.33%.
<P>"Seed Industry Consolidation: Who Owns Whom ?" the Rural Advancement
Foundation International's (RAFI) RAFI Communique July/August 1998
which includes a gigantic new industry consolidation chart, listing
over 275 companies and their subsidiaries, showing who owns whom
and features new industry rankings based on the latest wave of mergers
and acquisitions can be viewed at:
<BR><A HREF="http://www.rafi.ca/communique/";>http://www.rafi.ca/communique/</A>
<P><FONT SIZE=+1>"AGRICULTURE IS ABOUT TO GET VERY SMALL"</FONT>
<P>Systemically still suffering the consequences of the 1980?s "farm debt
crisis," victimized once again by the devious and hollow promises of a
"get rich" export policy, unpredictable weather, below cost of production
commodity prices, a corporate-engineered federal farm policy that enslaves
family farmers rather than frees them to farm, all have effectively conspired
to dim if not totally darken farm yard lights throughout our land.
<P>But, if we are to believe Steve Baker, Vice-President of Marketing,
Research and Development for Agribank, a large Midwestern co-op bank consortium
with multibillions in farm credit assets, things within the next three
to five years are going to get a lot worse for the majority of America's
family farms and a whole lot better for a small , very small, number of
corporate agribusinesses.
<P>In a May teleconference before extension agents attached to Clemson
University in South Carolina, Baker outlined in an 60 minute presentation,
"Agribusiness Is About to Get Very Small," how in a very few years
three giant megacomplexes will totally dominate corporate agribusiness
and agriculture and those involved in agriculture will fall into three
distinct categories:
<P>1. Reinventors - those who will "reinvent" their businesses to keep
up with the changes or start new enterprises based on "new opportunities."
<BR>2. Disllusionists - those who will make cosmetic changes, but continue
to do business as usual.
<BR>3. Hospice care group - the walking dead, those denying that "change"
is happening, who will linger on in some niche group or else just give
up and get out of agriculture.
<P>The new model of farming --- contracting with large megacomplexes to
produce crops with a specific design for a specific purpose --- by the
year 2000, Baker notes, will see from 50% to 60% of all crops in the Midwest
under contract; 88% of hogs, 65% of dairies, and 44% of all beef.
<P>Baker also sees, based on interviews his bank conducted with some 60,000
farmers and over 300 CEO's from agribusinesses up and down the food chain,
the current 400,000 agribusinesses which supply the farmer (feed, seeds,
chemical poisons, consultants, etc.) being eliminated or coming under the
umbrella of three megacomplexes --- Monsanto, DuPont and Novartis. He believes
that the domination of these three in research, while spending billions
each year, means that no one else will be able to keep pace. In 1990, he
notes, there were 30 biotech companies, today there are seven --- "primary
intellectual capital" --- ones.
<P>Baker believes the key implications of what he sees as something
"far more exciting" than agriculture --- "life sciences" or "prescription
agriculture" --- are:
<BR>1. Massive flows of capital coming into play; currently $80 billion
is being annually spent on food and life sciences research in the U.S.
alone.
<BR>2. Food chain consolidation will continue to happen rapidly.
<BR>3. The key players will have to get their solutions to market and get
a return on those "solutions" as quickly as possible to satisfy their stockholders.
<BR>4. There will be "the blood of `middle men' in the streets in
all sectors."
<P>Video tape copies of "Agriculture Is About to Get Very Small" are available
through Telemedia, 153 Grace Drive, Easley, S.C. 29640; phone: (864) 269-7744
or 1-800-76VIDEO; fax: (864-269-7618.
<P><I>Bon appetit !!!</I></HTML>
--------------BD4B771221034F918F275C38--
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx
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