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[PEN-L:1866] THE AGRIBUSINESS EXAMINER #15 (fwd)
Forwarded message:
Delivered-To: michael@xxxxxxxxxxxxxxxxxxxxxx
Date: Wed, 23 Dec 1998 21:44:50 -0800
From: "Albert V. Krebs" <avkrebs@xxxxxxxxxxxxx>
Reply-To: avkrebs@xxxxxxxxxxxxx
To: one@xxxxxxxxxxxxx
Subject: THE AGRIBUSINESS EXAMINER #15
X-UID: 753
--------------3F76AB072DBA01F513F4445E
The
AGRIBUSINESS
EXAMINER Issue # 15 December 24, 1998
Monitoring Corporate Agribusiness From a Public Interest Perspective
A.V. Krebs
Editor\Publisher
Editors Note
So we all may enjoy this time of year and celebrate properly the
holiday season with family and friends and bid out the old year and
appropriately ring in the new, the next edition of THE AGRIBUSINESS
EXAMINER will appear on January 7, 1999.
EBENEZER SCROOGE WAS A GRAIN TRADER
"If you want my corn gentlemen, you must meet my quote, plus 5% for the
delay!"
"That's outrageous Scrooge, you'll be left with a warehouse stuffed with
corn."
"Well, that's my affair, isn't it? Buy the corn someplace else, good day
sir"
"Scrooge, a moment. We'll take your corn at the price you quoted
yesterday."
"Too late! you wait until tomorrow and it will cost you another 5%!"
"Damn it Scrooge, it's not fair!"
"No, but it's business!"
A Christmas Carol by Charles Dickens, CBS-TV, December 22, 1985
COMMENTARY:
THE TIME HAS COME !
"The husbandman that laboreth must be the first partaker of the fruits"
is the inscription from St. Paul that appears over the portico of the
U.S. Department of Agriculture headquarters in Washington, D.C.
Unfortunately, however, the principal occupant of that building, USDA
Secretary Dan Glickman, has not only ignored St. Paul's charge but has
in the past five years repeatedly exhibited an inability to stand up to
the self-interest motivated policies of corporate agribusiness.
When one reviews Secretary Glickman's tenure in office it is clear that
his record is strewn with the "sins of omission," unlike those "sins of
commission" that have become the hallmark of the President who appointed
him to head the huge government agency. For example:
* CAPTIVE SUPPLIES IN THE CATTLE MARKET
Two years ago, the Western Organization of Resource Councils (WORC)
presented Glickman with a proposal to restore competition in the
livestock industry. Thousands of letters to the Secretary expressed
support for WORC's proposed rule to control "captive supplies" of
cattle.
A long-awaited 1996 USDA study of who controls the beef packing industry
revealed the following picture: Iowa Beef (38%); Cargill [Excel] (22%);
ConAgra (21%) and National Beef (6%). Applying the Department of
Justice's HHI formula that would show: Iowa Beef 1444, Cargill (Excel)
484, ConAgra 441, and National Beef 36 for a total of 2355. If one goes
back as recently as 1992 we see the Big Four in the meat packing
industry with a HHI of 2128, an increase in just the past three years
of 227!!! Both figures far exceed the Department's norm for indicating a
competitve market.
In 1921 when the Packers & Stockyards Act (P&SA) was passed it was
reacting to a slaughter market where four firms ---- Swift, Armour,
Cudahy and Wilson --- controlled nearly 40% of the market. A 1916
study, requested by President Woodrow Wilson, by the Federal Trade
Commission had found that there was no longer competition in the meat
packing industry and saw the need for severe industry restructuring.
Despite this history and the current state of the beef packing industry
Secretary Glickman after two years is still considering new rule-making
power based on the proposals submitted to it by WORC which would 1)
disallow formula or basis pricing on forward contracted slaughter
cattle; 2) require that forward contracts be offered in an open, public
manner, and 3) require that packer-fed cattle be sold on an open, public
market.
Currently, beef packing companies can take such cattle without ever
bidding in open markets, such as livestock sale barns. By keeping their
packing plants full for days and weeks at a time with such "captive
supplies" they can easily force open market prices (or "cash" market
prices) down by simply not buying for long periods. Glickman has yet to
act on the WORC proposals, rather he is, according to WORC's John
Smillee, "listening to USDA bureaucrats and lawyers who tell him he
can't act. USDA has been stalling, hoping we'll think `maybe' is better
than `no.' But it's been too long. We need an answer."
In January Secretary Glickman's National Commission on Small Farms
recommended adoption of WORC's proposal.. Several weeks ago, USDA
reported to the Commission on its progress in implementing the
Commission's recommendations, but indicated it hadn't made any progress
on WORC's "petition for rulemaking" to control captive supplies of
cattle. The Commission, is insisting on an answer to it and WORC's
proposal. It passed a resolution demanding a yet undelivered decision
on WORC's petition by November 1st. "The manner in which USDA has
failed to appropriately address the WORC petition has only led to a
perception by producers that USDA has no intention of any reasonable
pursuit of market corrections," the Commissioners said.
A recent analysis, prepared for WORC by agricultural economist Catherine
Durham
of Oregon State University, uses information in a study done for USDA to
estimate how much the use of captive supplies lowered prices paid to
cattle producers. The total impact of captive supplies on cattle prices
was between $51.9 million and $527 million, according to Professor
Durham's analysis. The difference in the numbers depends on which of
several models in the USDA study is used, and on other assumptions
needed to make the estimate.
"USDA officials have denied that there is evidence of harm to cattle
producers from captive supplies," said Tom Breitbach, a Circle, Montana,
farmer speaking for WORC. "This analysis by Dr. Durham shows there is
evidence of significant harm to producers. If USDA won't act with this
evidence, what on earth good is it?," Breitbach asked.
* FOOD LABELING
Meanwhile, back at the USDA corral Dan Glickman was meeting with a
bipartisan group of U.S. senators to discuss legislation (which Congress
ultimately failed to enact) that would require that meat be labeled as
domestic or imported. A memo circulating within the USDA's leadership
ranks had caught the attention of some agricultural groups. The memo
expressed some USDA officials' opposition to the meat-labeling
provision because it could cost the government $60 million a year to
enforce and could hurt U.S. exports. Glickman told reporters that he
was willing to work with lawmakers to reach a sensible plan for meat
labeling, as long as the plan would not distort trade.
In 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 their cattle,
asked some penetrating questions, questions the American consumer should
be asking every day; questions that the Secretary of Agriculture should
also be addressing.
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."
"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 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.
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 adds: "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."
Callicrate pointed to the BSE "Mad Cow" problem in Europe, resulting in
the destruction of 1.2 million cows and $800 million in losses, as 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, "? theyíre
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.
* BIOTECH: GENE MODIFICATION AND THE TERMINATOR
At the same time Secretary Glickman has shown his reluctance to act on
the meat-labeling issue he also recently voiced his opposition to a
Japanese plan to require farm producers to label genetically engineered
agricultural products."It could be a new trade barrier, so it's not
appropriate," Glickman was quoted as saying during a meeting with
Japan's Agriculture, Forestry and Fisheries Minister Shoichi Nakagawa.
Briefing Glickman on the labeling requirement under consideration by his
ministry, Nakagawa said it is not a safety issue, but an issue of
consumers' right to know and added he is waiting for the result of a
study on what kind of labeling is the best.
Last summer Cargill Inc., 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.
In Argentina last December, at a meeting of the American Chamber of
Commerce in Buenos Aires, Argentina, Glickman offered his unequivocal
support for the use of genetically altered agricultural products and
said he hopes the issue will be high on the agenda at the next round of
world trade talks in 1999. "Biotechnology holds out the greatest hope
for feeding the world's expanding population in a sustainable way," he
said.
Glickman's remarks came several months prior to the the Consultative
Group on International Agricultural Research (CGIAR) announcing that it
"will not incorporate into its breeding materials any genetic systems
designed to prevent seed germination. This is in recognition of (a)
concerns over potential risks of its inadvertent or unintended spread
through pollen; (b) the possibilities of sale or exchange of inviable
seed for planting; (c) the importance of farm-saved seed, particularly
to resource-poor farmers; (d) potential negative impacts on genetic
diversity and (e) the importance of farmer selection and breeding for
sustainable agriculture."
With that statement the Terminator - and related genetic seed
sterilization technology - has been banned from the crop breeding
programs of the world's largest international agricultural research
network. The strong and unambiguous policy was adopted by CGIAR at a
meeting at the World Bank in Washington on October 30th.
"It's a courageous decision. The CGIAR has done the right thing, for the
right reasons," said Pat Mooney, Executive Director of Rural Advancement
Foundation International (RAFI), "a ban on Terminator is a pro-farmer
policy in defense of world food security."
The CGIAR is a global network of 16 international agricultural research
centers, which collectively form the world's largest public plant
breeding effort for resource-poor farmers. The Terminator genetic
engineering technique renders farm-saved seed sterile, forcing farmers
to return to the commercial seed market every year. The technology is
aimed primarily at seed markets in Africa, Asia and Latin America, where
over 1.4 billion people depend on farm-saved seed and on-farm plant
breeding. If widely adopted, the Terminator would make it impossible for
farmers to save seed and breed their own crops.
Curiously, however it is Glickman's USDA working jointly with Delta &
Pine Land, a Monsanto subsidiary that has been developing the Terminator
technology. Mooney rightfully notes that CGIAR policy is "a slap in the
face to the US Government - a major CGIAR funder - and to Monsanto
because it soundly negates their claims that sterilizing seeds will
boost plant breeding in marginal areas and help feed the hungry."
Mooney adds, "The defenders of biotechnology's suicide seeds are
certainly powerful; but they must be feeling pretty lonely."
* BOVINE GROWTH HORMONE
Also in the area of biotechnology, despite evidence to the contrary,
despite the fact that the U.S. Food and Drug Administration's (FDA)
basis for approving Monsanto's rBGH (bovine growth hormone) has been
shown to be scientifically questionable Glickman has remained silent on
the issue of its use in the American milk supply.
rBGH is an artificial growth hormone that is estimated to increase milk
production in cows by 10 to 15 per cent. The drug has been widely used
in the United States since being approved by the FDA in 1993, but
remains unapproved in Canada and much of Europe.
Appearing before the Canadian's Senate Standing Committee on Agriculture
and Forestry on October 22, five scientists from that country's Health
Canada's Human Safety Division testified that they have been pressured
to sign off on a drug they felt had yet to be sufficiently tested.
They noted that in a 1990 Science magazine, FDA published its
justification for its conclusion that milk from rBGH-treated cows was
"safe for human consumption." The article offered seven tables of data
to support its conclusion that rBGH is safe. The first two tables of
data were taken from an unpublished Monsanto study of rats fed rBGH in
high doses for 90 days. FDA reported that the 90-day rat feeding study
showed that rBGH "is not orally active in rats" and concluded that, "no
oral activity was found when rBGH was administered to rats at
exaggerated doses."
One FDA official later told the Associated Press that FDA never examined
the raw data from Monsanto's rat feeding study but based its 1993 safety
conclusion only on a summary of the study provided by Monsanto. John
Scheid, of FDA's Center for Veterinary Medicine, told AP reporter
Frederick Bever, "We do not have the data from that study." Scheid said
FDA had relied on a summary of the study provided by Monsanto.
In addition, a recently-released Canadian government report indicates
that the findings of Monsanto's 90-day rat feeding study were
misreported by the FDA since 20% to 30% of the rats fed rBGH in high
doses developed primary antibody responses to rBGH, indicating that rBGH
was absorbed into their blood. In addition, cysts reportedly developed
on the thyroids of the male rats and some increased infiltration of the
prostate gland occurred.The Canadian government report concludes flatly
that "the 3-month rat study did show a physiological response."
* ANIMAL AND PLANT HEALTH SAFETY
Lost in the frenzy of 105th Congress's adjournment was the fact that
biotechnology funding for the USDA's animal and plant health agency was
reduced to $7.39 million for the fiscal year that began October. 1, down
from $8.13 million the year before.
The nine percent reduction "sends a misleading and potentially damaging
signal regarding a valuable technology that is currently under siege in
the international marketplace," Carl Feldbaum, president of the
Biotechnology Industry Organization, a Washington-based organization,
said in a letter to Secretary Glickman.
An estimated 60 million acres, or about 20 percent of all U.S. crop land
is currently planted with some type of genetically engineered seed this,
according to Alan Goldhammer, the Biotechnology Industry Organization's
executive director for regulatory affairs.
USDA's Animal and Plant Health Inspection Service is responsible for
issuing permits to such biotech seed firms as Pioneer Hi-Bred
International Inc., Monsanto Co., DeKalb Genetics Corp. and others that
conduct field tests on genetically engineered seeds. With less money,
Goldhammer said, there will be fewer people available to evaluate
requests and issue permits.
Not surprisingly a spokesman for Glickman said the agriculture secretary
had no immediate comment.
* ORGANIC STANDARDS
After seven years of negotiations and debate and eventually bowing to
pressure from the organic food industry and after receiving a record
200,000+ letters, faxes and e-mails from consumers Glickman, caught in
his and the USDA's customary bind between regulating the labeling of
food products and representing the interests of corporate agribusiness,
announced in May, 1998 proposed rules that will provide a uniform
national standard as to what may be considered "organic food."
Initially corporate agribusiness wanted the word "organic" to be defined
loosely enough so that the big companies could use it too despite
differences between their method and the competing ones. However, after
an overwhelming public protest USDA decided not to allow food to be
labeled "organic" if it was genetically engineered, irradiated or grown
in soil fertilized with sewage sludge. Yet, Glickman remained undaunted
for in announcing that the USDA would revise its proposals and invite
public comment again before issuing final rules with the force of law,
said that biotechnology, irradiation and sludge fertilizer were safe and
had "important roles to play in agriculture."
Not to be deterred corporate agribusiness, aided and abetted by Glickman
and his department, continues its relentless efforts to gut the National
Organic Standards Act.
In July 1998 Glickman announced that the USDA would accept the National
Organic Advisory Board's (NOSB) recommendation that only substances
currently approved for organic use will be used on organically grown
plants. Now the USDA has added three new issues to the proposed national
organic standard and is requesting comments on them.
The three new proposals would a) permit indoor animal confinement, b)
permit use of animal medications including antibiotics, and c) eliminate
the ability of organic certifiers to prevent the sale of mishandled or
fraudulent organic products.
These proposals would give the USDA a "legal monopoly" over the term
organic as only one organic label, "USDA Organic", would be allowed. In
addition USDA would have complete control over appointments to the NOSB;
suggesting, if history is any teacher, that once the board was appointed
USDA could and more than likely would weaken the NOSB by appointing
people sympathetic to corporate agribusiness, food irradiation and
genetic engineering.
While the new proposal would also make it illegal for private,
nongovernmental organic certifiers to uphold higher standards than the
standards set by the USDA it would also ban "Eco-Labels," making it
illegal to even imply through labeling or advertising that a product
exceeds USDA standards. By prohibiting stricter standards, this
provision would strip organic consumers of freedom of choice, and would
in all likelihood stop so-called "sustainable agriculture" dead in its
tracks. Farmers likewise would have no incentive to grow food in ways
that are more sustainable or safer than the USDA permits.
Finally, the new proposals, unless changed, could allow intensive
confinement, non-organic feed, antibiotics, additional synthetic
chemicals, etc.
* CHINA AND HUMAN RIGHTS
While human rights organizations throughout the world have been
denouncing conditions in China Glickman, speaking before the National
Cotton Council's board of directors meeting in Washington earlier this
year, declared that depriving China of Most Favored Nation trading
status would be "a catastrophe" for U.S. agriculture, while at the same
time noting that the cotton industry, of which China is its No. 1
market, would suffer.
"I can tell you that we have nothing to gain and everything to lose by
walking away from China right now," Glickman said. He protested that if
the U.S. doesn't maintain normal trade relations with China, it will
not only be hurt economically, but will be hurt by having no influence
over China's human rights policies. "If we're concerned about human
rights, if we're concerned about the pace of democratization, we have to
keep our leverage, and that is economic leverage. Without (trade), we've
got nothing to bargain with," he said.
* SUBSIDIZING CORPORATE AGRIBUSINESS
Speaking of cotton, the Washington Postís Sharon Walsh, in a revealing
and in-depth November 25, 1998 article has shown that that same Cotton
Board and Cotton Inc. collects a pot of $60 million from farmers and
importers each year --- which has nearly doubled since 1991 --- under
an act of Congress to promote the sale and use of cotton by Americans
and in foreign markets. However, those two quasi-public bodies have been
spending that money lavishly with little government oversight or
accountability.
Likewise the article reports that the USDA, which oversees the
cotton-promotion program and 11 similar programs for products such as
milk, pork and beef, has repeatedly failed to exercise its authority and
determine how the money is spent, even in the face of critical reports
from its own inspector general and the General Accounting Office.
Meanwhile, In the first lawsuit of its kind in the nation, the USDA was
bringing formal charges against Montana cattle producers Steve and
Jeanne Charter for failure to pay the federally-mandated $1 per head
Beef Checkoff. The government has proposed an $8500 civil penalty in
addition to a requirement to pay $250 in actual Checkoff assessments and
$25.77 in late charges to the Montana Beef Council for 2 cattle sales:
one involving 247 yearlings sold in October of l997 and the other for 3
cull cows sold in April of 1998.
The Charters contend that by approving a centralized arrangement that
greatly empowers and enriches the National Cattlemen's Beef Association
(NCBA) the USDA institutionalizes a critical conflict of interest in the
Checkoff program. "NCBA and their professional staff got the go ahead
from USDA to participate on both sides of almost every Checkoff deal:
first proposing, then deciding, then receiving multi-million dollar
grant contracts. We honestly believe these USDA actions wronged us and
deprived us of some of our most important civil rights as a
consequence."
"We are vehemently opposed to many of NCBA's economic policies," they
add. "Their support for captive supply contracts and giant agribusiness
agendas, GATT, NAFTA and Fast-Track trade authority all work directly
against our own business interests and personal political beliefs."
Glickman, the USDA, and corporate agribusiness have been the principal
ìcheerleadersî for GATT, NAFTA and Fast-Track trade authority.
"Under NCBA policies," the Charters continue,"there's no future for us.
It's wrong for such a controversial and undemocratic organization to be
able to maintain itself primarily on mandatory Checkoff assessments, and
it's wrong for us to be required to support the NCBA's general operation
and position of influence through the force of the federal Beef Checkoff
Order and Law. . . . We don't really blame USDA for seeking to make an
example of us in hopes of discouraging others from Checkoff protests and
maintaining orderly collection. We do blame them for taking an improper
role as `kingmaker' for the NCBA and are convinced they exceeded their
legal authority in approving the l996 Checkoff merger plan."
* REWARDING THE VIOLATORS
In two major cases brought into the courts in recent months by both the
Department of Justice and the Independent Counsel's Office USDA has
declined to take action on two major corporations who were charged with
violating the law.
In January the USDA notified Archer Daniel Midland (ADM) "Supermarkup to
the World" that it would permit the Company to continue participating
in federal food contracts despite ADM's guilty pleas to price-fixing
charges in the world-wide feed additive market. Wall Street analysts
estimate that the government annually buys about $85 million of
commodities from ADM, most of which are used in the government's foreign
food-aid program.
Grant Buntrock, administrator of the USDA's Farm Service Agency, said
ADM's admitted rigging of the world-wide prices of lysine and citric
acid didn't violate any USDA regulations. To stay in the USDA programs,
however, ADM had to agree to let the USDA's Inspector General scrutinize
company books and records for three years.
Previously, the USDA had barred the California cooperative Sun-Diamond
Growers from federal food contracts for three years after it was
convicted of making illegal gifts to former Agriculture Secretary Mike
Espy, who later was aquitted of accepting such gifts.
In another Washington, D.C. courtroom that same month U.S. District
Judge Ricardo M. Urbina federal judge doubled the length of probation
for Tyson Foods Inc. that the poultry giant and the independent counsel
had agreed to earlier in a plea bargain, placing the FOB ("Friends of
Bill" ) Arkansas-based firm on probation for four years instead of two.
Judge Ricardo M. Urbina also declared that he had the power to suspend
or bar the company from doing millions of dollars in business with the
federal government if it fails to do what it has promised.
The hearing was supposed to be pro forma, with Judge Urbina officially
signing off on the guilty plea that Tyson made in December, 1997 for
giving more than $12,000 in illegal gratuities to Secretary Espy.
Independent Counsel Donald Smaltz's office and Tyson's attorneys had
negotiated a deal that required the company to pay a $4 million fine,
plus $2 million toward the cost of the independent counsel's three and
one-half year investigation of Espy. Had it not been for the plea
bargain, Tyson could have lost $200 million in contracts with the USDA
alone.
At the time of the plea bargain many felt that Tyson Foods plea had
gotten too good a deal for under the terms of the plea agreement, it was
not be barred from doing business with the USDA or the Department of
Defense, the scope of that business making the $6 million Tyson Foods
did agree to pay seem like a pittance.
* INACTION IN THE MARKETPLACE
While National Farmers Union (NFU) President Leland Swenson was
expressing alarm for the future of rural America and calling for swift
and decisive action by President Clinton and Congressional leaders,
opposing the proposed purchase of Continental Grain Co's commodity
merchandising division by Cargill, Inc. Secretary Glickman was asking
the Justice Department to "analyze thoroughly any such merger, to learn
if this would lead to elimination of competition in the marketplace."
"The proposed acquisition of Continental Grain, Co., by Cargill, Inc.,"
Swenson wrote Clinton, "is troubling for several reasons. The first,
and most paramount concern is the
impact this action will have on net farm income. . . . Allowing the two
largest grain purchasers to merge into one giant company could prove to
be devastating, he stressed as a further reduction of competition would
likely result in even lower prices to producers."
"Second," he continued, "the proposed merger poses a threat to the
economic health of our nation's rural communities. If approved, the
sale will likely result in the closing and merging of many local
elevators where farmers deliver their grain.
"Third," Swenson added, "the proposed purchase may undermine trade
opportunities for our nation's already struggling producers. With this
merger, a single company stands to control a large portion of the
country's grain exports.
"Finally, this proposed deal raises larger concerns about the rapid pace
of consolidation in the agriculture industry. The growing trend of
concentration has pervaded most sectors of agriculture over the past
several years, including the seed, packing, pesticide, grain and
agricultural transportation industries. We believe this pattern of
concentration has serious implications for producers, consumers and the
nation's economy."
* TIME TO STOP DEALING IN ILLUSIONS
The passage of the so-called "Freedom to Farm" legislation in 1995,
which has led to a disastrous lowering of net farm income for the
nation's some 1.925 million farmers, the ruination of the cattle
industry, the collapse of the hog market, the ever-growing concerns over
food safety, the growing concentrated power of corporate agribusiness
and dubious trade agreements such as the recent one between the U.S. and
Canada (that U.S. Trade Representative Charlene Barshefsky has called an
important first step in resolving a long- standing problem with Canada)
have all taken place on the Glickman watch.
Regarding the recent latter agreement, Sen. Byron L. Dorgan,
(Dem.-N.D.), called it an "illusion" and urged the Clinton
administration to file a complaint against Canada at the World Trade
Organization. Imports of spring wheat from Canada, according to
Dorgan's staff, have risen 1,000 percent since the early 1980s. "There
has been no progress at all on the major issue of the sheer quantity of
Canadian grain and livestock being dumped into our marketplace," Dorgan
said.
Clearly the nation's farmers, consumers and taxpayers need a Secretary
of Agriculture who will serve their best interests and not one so
beholden, as has been Secretary Dan Glickman, to the corporate elites
who today shape much of our farm, food and agricultural trade policies.
Alma, Kansas farmer Stephen Anderson got it right recently in a
letter-to-the-edtitor to his local paper when he wrote that "Glickman
has clearly demonstrated incompetence to act decisively with positive
measures of relief for America's disastrous farm economy," his "refusal
to enforce federal law on monopolies has allowed the meat packing cartel
to virtually destroy the family-farm sector of the livestock industry"
and with Depression era buying power of grain prices,"the announced
further consolidation of the grain trade has only elicited more
perfidious pandering to the agri-giants and the elimination of
competitive markets by the Secretary of Agriculture."
"No amount of white washing or hyperbole," Anderson concludes, "can
conceal the disastrously dismal record of Glickman's tenure as Czar of
American Agriculture."
This editor agrees and echoing Anderson's call we say "It's Time To
Resign, Mr. Secretary."
"GLORY TO GOD IN THE HIGHEST HEAVEN
AND PEACE TO MEN AND WOMEN WHO ENJOY HIS FAVOR"
"When they saw the child they repeated what they had been told about him
and everyone who heard it was astonished at what the sheperds had to
say. As for Mary, she treasured all these things and pondered them in
her heart. And the sheperds went back glorifying God for all they had
heard and seen; it was exactly as they had been told." -
Luke 2: 17-20
--------------3F76AB072DBA01F513F4445E
<HTML>
<P><B><FONT SIZE=+1>The</FONT></B>
<BR><B><FONT SIZE=+2>AGRIBUSINESS</FONT></B>
<BR><B><FONT SIZE=+2>EXAMINER </FONT></B>
Issue # 15 December 24, 1998
<P><I>Monitoring Corporate Agribusiness From a Public Interest Perspective</I>
<BR>
<P>A.V. Krebs
<BR><I>Editor\Publisher</I>
<BR>
<P>
<B>Editors Note</B>
<BR>So we all may enjoy this time of year and celebrate properly
the holiday season with family and friends and bid out the old year and
appropriately ring in the new, the next edition of THE AGRIBUSINESS EXAMINER
will appear on January 7, 1999.
<BR>
<P><FONT SIZE=+1>EBENEZER SCROOGE WAS A GRAIN TRADER</FONT>
<P>"If you want my corn gentlemen, you must meet my quote, plus 5% for
the delay!"
<BR>"That's outrageous Scrooge, you'll be left with a warehouse stuffed
with corn."
<BR>"Well, that's my affair, isn't it? Buy the corn someplace else, good
day sir"
<BR>"Scrooge, a moment. We'll take your corn at the price you quoted yesterday."
<BR>"Too late! you wait until tomorrow and it will cost you another 5%!"
<BR>"Damn it Scrooge, it's not fair!"
<BR>"No, but it's business!"
<P><I>A Christmas Carol by Charles Dickens, CBS-TV, December 22, 1985</I>
<BR><I></I> <I></I>
<P><FONT SIZE=+1>COMMENTARY:</FONT>
<BR><FONT SIZE=+1>THE TIME HAS COME !</FONT>
<P> "The husbandman that laboreth must be the first partaker of the
fruits" is the inscription from St. Paul that appears over the portico
of the U.S. Department of Agriculture headquarters in Washington, D.C.
Unfortunately, however, the principal occupant of that building, USDA Secretary
Dan Glickman, has not only ignored St. Paul's charge but has in the past
five years repeatedly exhibited an inability to stand up to the self-interest
motivated policies of corporate agribusiness.
<P>When one reviews Secretary Glickman's tenure in office it is clear that
his record is strewn with the "sins of omission," unlike those "sins of
commission" that have become the hallmark of the President who appointed
him to head the huge government agency. For example:
<P>* CAPTIVE SUPPLIES IN THE CATTLE MARKET
<P>Two years ago, the Western Organization of Resource Councils (WORC)
presented Glickman with a proposal to restore competition in the
livestock industry. Thousands of letters to the Secretary expressed support
for WORC's proposed rule to control "captive supplies" of cattle.
<P>A long-awaited 1996 USDA study of who controls the beef packing industry
revealed the following picture: Iowa Beef (38%); Cargill [Excel] (22%);
ConAgra (21%) and National Beef (6%). Applying the Department of
Justice's HHI formula that would show: Iowa Beef 1444, Cargill (Excel)
484, ConAgra 441, and National Beef 36 for a total of 2355. If one
goes back as recently as 1992 we see the Big Four in the meat packing industry
with a HHI of 2128, an increase in just the past three years of 227!!!
Both figures far exceed the Department's norm for indicating a competitve
market.
<P>In 1921 when the Packers & Stockyards Act (P&SA) was passed
it was reacting to a slaughter market where four firms ---- Swift, Armour,
Cudahy and Wilson --- controlled nearly 40% of the market. A 1916
study, requested by President Woodrow Wilson, by the Federal Trade
Commission had found that there was no longer competition in the meat packing
industry and saw the need for severe industry restructuring.
<P>Despite this history and the current state of the beef packing
industry Secretary Glickman after two years is still considering new rule-making
power based on the proposals submitted to it by WORC which would
1) disallow formula or basis pricing on forward contracted slaughter cattle;
2) require that forward contracts be offered in an open, public manner,
and 3) require that packer-fed cattle be sold on an open, public market.
<BR>
<BR>Currently, beef packing companies can take such cattle without ever
bidding in open markets, such as livestock sale barns. By keeping
their packing plants full for days and weeks at a time with such "captive
supplies" they can easily force open market prices (or "cash" market prices)
down by simply not buying for long periods. Glickman has yet to act
on the WORC proposals, rather he is, according to WORC's John Smillee,
"listening to USDA bureaucrats and lawyers who tell him he can't act. USDA
has been stalling, hoping we'll think `maybe' is better than `no.' But
it's been too long. We need an answer."
<P>In January Secretary Glickman's National Commission on Small Farms recommended
adoption of WORC's proposal.. Several weeks ago, USDA reported to the Commission
on its progress in implementing the Commission's recommendations, but indicated
it hadn't made any progress on WORC's "petition for rulemaking" to control
captive supplies of cattle. The Commission, is insisting on an answer
to it and WORC's proposal. It passed a resolution demanding a yet
undelivered decision on WORC's petition by November 1st. "The manner
in which USDA has failed to appropriately address the WORC petition has
only led to a perception by producers that USDA has no intention of any
reasonable pursuit of market corrections," the Commissioners said.
<P>A recent analysis, prepared for WORC by agricultural economist Catherine
Durham
<BR>of Oregon State University, uses information in a study done for USDA
to estimate how much the use of captive supplies lowered prices paid to
cattle producers. The total impact of captive supplies on cattle prices
was between $51.9 million and $527 million, according to Professor Durham's
analysis. The difference in the numbers depends on which of several models
in the USDA study is used, and on other assumptions needed to make the
estimate.
<BR>
<BR>"USDA officials have denied that there is evidence of harm to cattle
producers from captive supplies," said Tom Breitbach, a Circle, Montana,
farmer speaking for WORC. "This analysis by Dr. Durham shows there is evidence
of significant harm to producers. If USDA won't act with this evidence,
what on earth good is it?," Breitbach asked.
<P>* FOOD LABELING
<BR>
<BR>Meanwhile, back at the USDA corral Dan Glickman was meeting with a
bipartisan group of U.S. senators to discuss legislation (which Congress
ultimately failed to enact) that would require that meat be labeled as
domestic or imported. A memo circulating within the USDA's leadership ranks
had caught the attention of some agricultural groups. The memo expressed
some USDA officials' opposition to the meat-labeling provision because
it could cost the government $60 million a year to enforce and could
hurt U.S. exports. Glickman told reporters that he was willing to
work with lawmakers to reach a sensible plan for meat labeling, as
long as the plan would not distort trade.
<P>In 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 their cattle, asked some penetrating
questions, questions the American consumer should be asking every day;
questions that the Secretary of Agriculture should also be addressing.
<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>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 adds: "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>Callicrate pointed to the BSE "Mad Cow" problem in Europe, resulting
in the destruction of 1.2 million cows and $800 million in losses, as a
recent reminder of the importance of knowing where our food comes from.
<P>"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?"
<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>U.S. News and World Report </U>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.
<P>* BIOTECH: GENE MODIFICATION AND THE TERMINATOR
<P>At the same time Secretary Glickman has shown his reluctance to act
on the meat-labeling issue he also recently voiced his opposition to a
Japanese plan to require farm producers to label genetically engineered
agricultural products."It could be a new trade barrier, so it's not appropriate,"
Glickman was quoted as saying during a meeting with Japan's Agriculture,
Forestry and Fisheries Minister Shoichi Nakagawa. Briefing
Glickman on the labeling requirement under consideration by his ministry,
Nakagawa said it is not a safety issue, but an issue of consumers' right
to know and added he is waiting for the result of a study on what kind
of labeling is the best.
<P>Last summer Cargill Inc., 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>In Argentina last December, at a meeting of the American Chamber of
Commerce in Buenos Aires, Argentina, Glickman offered his unequivocal support
for the use of genetically altered agricultural products and said
he hopes the issue will be high on the agenda at the next round of
world trade talks in 1999. "Biotechnology holds out the greatest hope for
feeding the world's expanding population in a sustainable way," he said.
<P>Glickman's remarks came several months prior to the the Consultative
Group on International Agricultural Research (CGIAR) announcing that it
"will not incorporate into its breeding materials any genetic systems designed
to prevent seed germination. This is in recognition of (a) concerns
over potential risks of its inadvertent or unintended spread through pollen;
(b) the possibilities of sale or exchange of inviable seed for planting;
(c) the importance of farm-saved seed, particularly to resource-poor farmers;
(d) potential negative impacts on genetic diversity and (e) the importance
of farmer selection and breeding for sustainable agriculture."
<P>With that statement the Terminator - and related genetic seed sterilization
technology - has been banned from the crop breeding programs of the world's
largest international agricultural research network. The strong and
unambiguous policy was adopted by CGIAR at a meeting at the World Bank
in Washington on October 30th.
<P>"It's a courageous decision. The CGIAR has done the right thing, for
the right reasons," said Pat Mooney, Executive Director of Rural Advancement
Foundation International (RAFI), "a ban on Terminator is a pro-farmer
policy in defense of world food security."
<P>The CGIAR is a global network of 16 international agricultural research
centers, which collectively form the world's largest public plant breeding
effort for resource-poor farmers. The Terminator genetic engineering technique
renders farm-saved seed sterile, forcing farmers to return to the commercial
seed market every year. The technology is aimed primarily at seed
markets in Africa, Asia and Latin America, where over 1.4 billion people
depend on farm-saved seed and on-farm plant breeding. If widely adopted,
the Terminator would make it impossible for farmers to save seed and breed
their own crops.
<BR>
<BR>Curiously, however it is Glickman's USDA working jointly with Delta
& Pine Land, a Monsanto subsidiary that has been developing the Terminator
technology. Mooney rightfully notes that CGIAR policy is "a slap in the
face to the US Government - a major CGIAR funder - and to Monsanto because
it soundly negates their claims that sterilizing seeds will boost plant
breeding in marginal areas and help feed the hungry." Mooney adds,
"The defenders of biotechnology's suicide seeds are certainly powerful;
but they must be feeling pretty lonely."
<P>* BOVINE GROWTH HORMONE
<P>Also in the area of biotechnology, despite evidence to the contrary,
despite the fact that the U.S. Food and Drug Administration's (FDA) basis
for approving Monsanto's rBGH (bovine growth hormone) has been shown to
be scientifically questionable Glickman has remained silent on the issue
of its use in the American milk supply.
<P>rBGH is an artificial growth hormone that is estimated to increase milk
production in cows by 10 to 15 per cent. The drug has been widely used
in the United States since being approved by the FDA in 1993, but remains
unapproved in Canada and much of Europe.
<P>Appearing before the Canadian's Senate Standing Committee on Agriculture
and Forestry on October 22, five scientists from that country's Health
Canada's Human Safety Division testified that they have been pressured
to sign off on a drug they felt had yet to be sufficiently tested.
<P>They noted that in a 1990 <U>Science</U> magazine, FDA published its
justification for its conclusion that milk from rBGH-treated cows was "safe
for human consumption." The article offered seven tables of data to support
its conclusion that rBGH is safe. The first two tables of data were
taken from an unpublished Monsanto study of rats fed rBGH in high doses
for 90 days. FDA reported that the 90-day rat feeding study showed that
rBGH "is not orally active in rats" and concluded that, "no oral activity
was found when rBGH was administered to rats at exaggerated doses."
<P>One FDA official later told the Associated Press that FDA never examined
the raw data from Monsanto's rat feeding study but based its 1993 safety
conclusion only on a summary of the study provided by Monsanto. John
Scheid, of FDA's Center for Veterinary Medicine, told AP reporter Frederick
Bever, "We do not have the data from that study." Scheid said FDA had relied
on a summary of the study provided by Monsanto.
<P>In addition, a recently-released Canadian government report indicates
that the findings of Monsanto's 90-day rat feeding study were misreported
by the FDA since 20% to 30% of the rats fed rBGH in high doses developed
primary antibody responses to rBGH, indicating that rBGH was absorbed into
their blood. In addition, cysts reportedly developed on the thyroids of
the male rats and some increased infiltration of the prostate gland occurred.The
Canadian government report concludes flatly that "the 3-month rat study
did show a physiological response."
<P>* ANIMAL AND PLANT HEALTH SAFETY
<P>Lost in the frenzy of 105th Congress's adjournment was the fact that
biotechnology funding for the USDA's animal and plant health agency was
reduced to $7.39 million for the fiscal year that began October. 1, down
from $8.13 million the year before.
<P>The nine percent reduction "sends a misleading and potentially damaging
signal regarding a valuable technology that is currently under siege in
the international marketplace," Carl Feldbaum, president of the Biotechnology
Industry Organization, a Washington-based organization, said in a letter
to Secretary Glickman.
<P>An estimated 60 million acres, or about 20 percent of all U.S. crop
land is currently planted with some type of genetically engineered seed
this, according to Alan Goldhammer, the Biotechnology Industry Organization's
executive director for regulatory affairs.
<P>USDA's Animal and Plant Health Inspection Service is responsible for
issuing permits to such biotech seed firms as Pioneer Hi-Bred International
Inc., Monsanto Co., DeKalb Genetics Corp. and others that conduct
field tests on genetically engineered seeds. With less money, Goldhammer
said, there will be fewer people available to evaluate requests and issue
permits.
<P>Not surprisingly a spokesman for Glickman said the agriculture secretary
had no immediate comment.
<P>* ORGANIC STANDARDS
<P>After seven years of negotiations and debate and eventually bowing to
pressure from the organic food industry and after receiving a record
200,000+ letters, faxes and e-mails from consumers Glickman, caught in
his and the USDA's customary bind between regulating the labeling of food
products and representing the interests of corporate agribusiness, announced
in May, 1998 proposed rules that will provide a uniform national
standard as to what may be considered "organic food."
<P>Initially corporate agribusiness wanted the word "organic" to be defined
loosely enough so that the big companies could use it too despite differences
between their method and the competing ones. However, after an overwhelming
public protest USDA decided not to allow food to be labeled "organic"
if it was genetically engineered, irradiated or grown in soil fertilized
with sewage sludge. Yet, Glickman remained undaunted for in announcing
that the USDA would revise its proposals and invite public comment again
before issuing final rules with the force of law, said that biotechnology,
irradiation and sludge fertilizer were safe and had "important roles to
play in agriculture."
<P>Not to be deterred corporate agribusiness, aided and abetted by Glickman
and his department, continues its relentless efforts to gut the National
Organic Standards Act.
<P>In July 1998 Glickman announced that the USDA would accept the National
Organic Advisory Board's (NOSB) recommendation that only substances currently
approved for organic use will be used on organically grown plants. Now
the USDA has added three new issues to the proposed national organic standard
and is requesting comments on them.
<P>The three new proposals would a) permit indoor animal confinement, b)
permit use of animal medications including antibiotics, and c) eliminate
the ability of organic certifiers to prevent the sale of mishandled or
fraudulent organic products.
<P>These proposals would give the USDA a "legal monopoly" over the term
organic as only one organic label, "USDA Organic", would be allowed. In
addition USDA would have complete control over appointments to the NOSB;
suggesting, if history is any teacher, that once the board was appointed
USDA could and more than likely would weaken the NOSB by appointing people
sympathetic to corporate agribusiness, food irradiation and genetic engineering.
<P>While the new proposal would also make it illegal for private, nongovernmental
organic certifiers to uphold higher standards than the standards set by
the USDA it would also ban "Eco-Labels," making it illegal to even imply
through labeling or advertising that a product exceeds USDA standards.
By prohibiting stricter standards, this provision would strip organic consumers
of freedom of choice, and would in all likelihood stop so-called "sustainable
agriculture" dead in its tracks. Farmers likewise would have no incentive
to grow food in ways that are more sustainable or safer than the USDA permits.
<P>Finally, the new proposals, unless changed, could allow intensive confinement,
non-organic feed, antibiotics, additional synthetic chemicals, etc.
<P>* CHINA AND HUMAN RIGHTS
<P>While human rights organizations throughout the world have been denouncing
conditions in China Glickman, speaking before the National Cotton Council's
board of directors meeting in Washington earlier this year, declared that
depriving China of Most Favored Nation trading status would be "a catastrophe"
for U.S. agriculture, while at the same time noting that the cotton industry,
of which China is its No. 1 market, would suffer.
<P>"I can tell you that we have nothing to gain and everything to lose
by walking away from China right now," Glickman said. He protested that
if the U.S. doesn't maintain normal trade relations with China, it
will not only be hurt economically, but will be hurt by having no
influence over China's human rights policies. "If we're concerned about
human rights, if we're concerned about the pace of democratization, we
have to keep our leverage, and that is economic leverage. Without (trade),
we've got nothing to bargain with," he said.
<P>* SUBSIDIZING CORPORATE AGRIBUSINESS
<P>Speaking of cotton, the <U>Washington Post?s</U> Sharon Walsh,
in a revealing and in-depth November 25, 1998 article has shown that that
same Cotton Board and Cotton Inc. collects a pot of $60 million from
farmers and importers each year --- which has nearly doubled since 1991
--- under an act of Congress to promote the sale and use of cotton
by Americans and in foreign markets. However, those two quasi-public bodies
have been spending that money lavishly with little government oversight
or accountability.
<P>Likewise the article reports that the USDA, which oversees the cotton-promotion
program and 11 similar programs for products such as milk, pork and
beef, has repeatedly failed to exercise its authority and determine how
the money is spent, even in the face of critical reports from its own inspector
general and the General Accounting Office.
<P>Meanwhile, In the first lawsuit of its kind in the nation, the USDA
was bringing formal charges against Montana cattle producers Steve and
Jeanne Charter for failure to pay the federally-mandated $1 per head Beef
Checkoff. The government has proposed an $8500 civil penalty in addition
to a requirement to pay $250 in actual Checkoff assessments and $25.77
in late charges to the Montana Beef Council for 2 cattle sales: one involving
247 yearlings sold in October of l997 and the other for 3 cull cows sold
in April of 1998.
<P>The Charters contend that by approving a centralized arrangement that
greatly empowers and enriches the National Cattlemen's Beef Association
(NCBA) the USDA institutionalizes a critical conflict of interest in the
Checkoff program. "NCBA and their professional staff got the go ahead
from USDA to participate on both sides of almost every Checkoff deal: first
proposing, then deciding, then receiving multi-million dollar grant contracts.
We honestly believe these USDA actions wronged us and deprived us of some
of our most important civil rights as a consequence."
<P>"We are vehemently opposed to many of NCBA's economic policies," they
add. "Their support for captive supply contracts and giant agribusiness
agendas, GATT, NAFTA and Fast-Track trade authority all work directly against
our own business interests and personal political beliefs." Glickman, the
USDA, and corporate agribusiness have been the principal ?cheerleaders?
for GATT, NAFTA and Fast-Track trade authority.
<P>"Under NCBA policies," the Charters continue,"there's no future for
us. It's wrong for such a controversial and undemocratic organization
to be able to maintain itself primarily on mandatory Checkoff assessments,
and it's wrong for us to be required to support the NCBA's general operation
and position of influence through the force of the federal Beef Checkoff
Order and Law. . . . We don't really blame USDA for seeking to make an
example of us in hopes of discouraging others from Checkoff protests and
maintaining orderly collection. We do blame them for taking an improper
role as `kingmaker' for the NCBA and are convinced they exceeded their
legal authority in approving the l996 Checkoff merger plan."
<P>* REWARDING THE VIOLATORS
<P>In two major cases brought into the courts in recent months by both
the Department of Justice and the Independent Counsel's Office USDA has
declined to take action on two major corporations who were charged with
violating the law.
<P>In January the USDA notified Archer Daniel Midland (ADM) "Supermarkup
to the World" that it would permit the Company to continue participating
in federal food contracts despite ADM's guilty pleas to price-fixing charges
in the world-wide feed additive market. Wall Street analysts estimate that
the government annually buys about $85 million of commodities from ADM,
most of which are used in the government's foreign food-aid program.
<P>Grant Buntrock, administrator of the USDA's Farm Service Agency, said
ADM's admitted rigging of the world-wide prices of lysine and citric acid
didn't violate any USDA regulations. To stay in the USDA programs, however,
ADM had to agree to let the USDA's Inspector General scrutinize company
books and records for three years.
<BR>
<BR>Previously, the USDA had barred the California cooperative Sun-Diamond
Growers from federal food contracts for three years after it was convicted
of making illegal gifts to former Agriculture Secretary Mike Espy, who
later was aquitted of accepting such gifts.
<P>In another Washington, D.C. courtroom that same month U.S. District
Judge Ricardo M. Urbina federal judge doubled the length of probation
for Tyson Foods Inc. that the poultry giant and the independent counsel
had agreed to earlier in a plea bargain, placing the FOB ("Friends of Bill"
) Arkansas-based firm on probation for four years instead of two.
Judge Ricardo M. Urbina also declared that he had the power to suspend
or bar the company from doing millions of dollars in business with the
federal government if it fails to do what it has promised.
<P>The hearing was supposed to be pro forma, with Judge Urbina officially
signing off on the guilty plea that Tyson made in December, 1997 for giving
more than $12,000 in illegal gratuities to Secretary Espy. Independent
Counsel Donald Smaltz's office and Tyson's attorneys had negotiated
a deal that required the company to pay a $4 million fine, plus $2 million
toward the cost of the independent counsel's three and one-half year investigation
of Espy. Had it not been for the plea bargain, Tyson could have lost $200
million in contracts with the USDA alone.
<P>At the time of the plea bargain many felt that Tyson Foods plea
had gotten too good a deal for under the terms of the plea agreement, it
was not be barred from doing business with the USDA or the Department of
Defense, the scope of that business making the $6 million Tyson Foods did
agree to pay seem like a pittance.
<P>* INACTION IN THE MARKETPLACE
<P>While National Farmers Union (NFU) President Leland Swenson was expressing
alarm for the future of rural America and calling for swift and decisive
action by President Clinton and Congressional leaders, opposing the proposed
purchase of Continental Grain Co's commodity merchandising division by
Cargill, Inc. Secretary Glickman was asking the Justice Department to "analyze
thoroughly any such merger, to learn if this would lead to elimination
of competition in the marketplace."
<P>"The proposed acquisition of Continental Grain, Co., by Cargill, Inc.,"
Swenson wrote Clinton, "is troubling for several reasons. The first,
and most paramount concern is the
<BR>impact this action will have on net farm income. . . . Allowing the
two largest grain purchasers to merge into one giant company could prove
to be devastating, he stressed as a further reduction of competition would
likely result in even lower prices to producers."
<P>"Second," he continued, "the proposed merger poses a threat to the economic
health of our nation's rural communities. If approved, the sale will
likely result in the closing and merging of many local elevators where
farmers deliver their grain.
<P>"Third," Swenson added, "the proposed purchase may undermine trade opportunities
for our nation's already struggling producers. With this merger,
a single company stands to control a large portion of the country's grain
exports.
<P>"Finally, this proposed deal raises larger concerns about the rapid
pace of consolidation in the agriculture industry. The growing trend
of concentration has pervaded most sectors of agriculture over the past
several years, including the seed, packing, pesticide, grain and agricultural
transportation industries. We believe this pattern of concentration
has serious implications for producers, consumers and the nation's economy."
<P>* TIME TO STOP DEALING IN ILLUSIONS
<P>The passage of the so-called "Freedom to Farm" legislation in 1995,
which has led to a disastrous lowering of net farm income for the nation's
some 1.925 million farmers, the ruination of the cattle industry, the collapse
of the hog market, the ever-growing concerns over food safety, the growing
concentrated power of corporate agribusiness and dubious trade agreements
such as the recent one between the U.S. and Canada (that U.S. Trade Representative
Charlene Barshefsky has called an important first step in resolving a long-
standing problem with Canada) have all taken place on the Glickman watch.
<P>Regarding the recent latter agreement, Sen. Byron L. Dorgan, (Dem.-N.D.),
called it an "illusion" and urged the Clinton administration to file a
complaint against Canada at the World Trade Organization. Imports of spring
wheat from Canada, according to Dorgan's staff, have risen 1,000
percent since the early 1980s. "There has been no progress at all
on the major issue of the sheer quantity of Canadian grain and livestock
being dumped into our marketplace," Dorgan said.
<P>Clearly the nation's farmers, consumers and taxpayers need a Secretary
of Agriculture who will serve their best interests and not one so beholden,
as has been Secretary Dan Glickman, to the corporate elites who today shape
much of our farm, food and agricultural trade policies.
<P>Alma, Kansas farmer Stephen Anderson got it right recently in a letter-to-the-edtitor
to his local paper when he wrote that "Glickman has clearly demonstrated
incompetence to act decisively with positive measures of relief for America's
disastrous farm economy," his "refusal to enforce federal law on monopolies
has allowed the meat packing cartel to virtually destroy the family-farm
sector of the livestock industry" and with Depression era buying power
of grain prices,"the announced further consolidation of the grain trade
has only elicited more perfidious pandering to the agri-giants and
the elimination of competitive markets by the Secretary of Agriculture."
<P>"No amount of white washing or hyperbole," Anderson concludes, "can
conceal the disastrously dismal record of Glickman's tenure as Czar of
American Agriculture."
<P>This editor agrees and echoing Anderson's call we say "It's Time
To Resign, Mr. Secretary."
<BR>
<P><FONT SIZE=+1>"GLORY TO GOD IN THE HIGHEST HEAVEN</FONT>
<BR><FONT SIZE=+1>AND PEACE TO MEN AND WOMEN WHO ENJOY HIS FAVOR"</FONT>
<P>"When they saw the child they repeated what they had been told about
him and everyone who heard it was astonished at what the sheperds had to
say. As for Mary, she treasured all these things and pondered them in her
heart. And the sheperds went back glorifying God for all they had heard
and seen; it was exactly as they had been told."
- <I>Luke 2: 17-20</I></HTML>
--------------3F76AB072DBA01F513F4445E--
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx
- Thread context:
- [PEN-L:1870] Re: Re: marginalism uber alles,
William S. Lear Fri 25 Dec 1998, 16:05 GMT
- [PEN-L:1869] Re: marginalism uber alles,
Rob Schaap Fri 25 Dec 1998, 15:55 GMT
- [PEN-L:1868] To count our blessings,
valis Fri 25 Dec 1998, 12:05 GMT
- [PEN-L:1867] Re: Black Radical Congress,
Art McGee Fri 25 Dec 1998, 09:13 GMT
- [PEN-L:1866] THE AGRIBUSINESS EXAMINER #15 (fwd),
michael Fri 25 Dec 1998, 06:15 GMT
- [PEN-L:1864] US and British bombs killed hundreds,
Frank Durgin Thu 24 Dec 1998, 16:56 GMT
- [PEN-L:1863] Re: Worker managed firms and n-c theory,
William S. Lear Thu 24 Dec 1998, 14:32 GMT
- [PEN-L:1862] Re: Black Radical Congress Mailing List,
William S. Lear Thu 24 Dec 1998, 14:29 GMT
- [PEN-L:1865] Re: Re: Re: Environmental Quality in Developing Countries,
Brad De Long Thu 24 Dec 1998, 14:08 GMT
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