Monitoring Corporate Agribusiness From a Public Interest Perspective
A.V. Krebs Editor\Publisher
June 21, 2001
A MEMORIAL: JOSEPH PETULLA
"He whom you love and lose
is no longer where he was before.
He is now wherever you are."
--- St. John Chrysostom
On June 9, 2001 Joseph Petulla, your editor's best friend and long-time professional and personal confidant, died of cancer. As a tireless community activist, environmentalist, author, teacher, progressive populist friend and valued colleague to so many his presence will sorely be missed, but not his legacy as one can read for themselves below.
Joe Petulla taught at six colleges and universities, including the University of California, Berkeley. A Fullbright scholar, he founded the graduate program in environmental management at the University of San Francisco where he taught and counseled until his retirement. Among the many books he wrote and published were his classic American Environmental History: The Exploitation and Conservation of Natural Resources, American Environmentalism: Values, Tactics and Priorities, Environmental Protection in the United States: Industry, Agencies, Environmentalists, The Tao Te Ching and the Christian Way, From Crisis to Wellness, Christian Political Theology: A Marxian Guide and his his most recent pride and joy Edgar Beaver's Destiny: An Environmental Fable. (See Issue #106)
A native of Oil City, Pennsylvania he has lived in Berkeley, California for some 34 years with his companion and wife Maggie. In addition to teaching courses in religion on both the high school and college levels, writing extensively on environmental issues, he served in recent years as volunteer reader to small school children in the Berkeley community.
A memorial service will be held for Joe Petulla at 6 PM on Saturday, June 23, 2001 at St. Joseph the Worker Church in Berkeley, California (1640 Addison at Jefferson (one block off University between Sacramento and M.L.King).
Good friend, R.I. P. !!!!
ECONOMIC RATIONALITY OF AMERICAN DEMOCRACY
HAS LEAD TO ECONOMIC CONCENTRATION,
WASTE OF NATURAL RESOURCES,
". . . It is almost an understatement to assertthat Americanhave been all too willing to exploit natural resources to their limits for personal gain. But to decry America's materialism and greedy profit-seeking, its collective attitudes of waste, would be an oversimplified moralization. Attitudes --- materialistic or otherwise --- are born in history. Economic , political and social institutions create a culture and a mentality which in turn live long after those institutions have given way to new structures. With them technologies are developed to meet new needs and engender habits, even new cultures of their own. Economic and politics, attitudes and beliefs, technologies and habits --- these variables interact in a complex web of relationships in the creation of a culture.
Different periods of time will necessarily be characterized by a different mix of the variables, and as one era builds upon the preceding one, social change proceeds from the possibilities inherent in the former society. If environmental change is to occur, an understanding of American history with a special view of the way natural resources have been exploited or conserved is important. Awareness of past and present institutional structures is needed before the first step toward environmental and social change can be taken . . . . .
First, I suggest that the economic rationality of American democracy has tended to lead to economic concentration; a waste of natural resources; and environmental degradation (also an inequitable distribution of wealth, but this subject is scarcely touched upon).
Second, business imperatives rather than environmental or social concerns, and technological development have increased the exploitation and processing of natural resources.
Third, at the same time, the nation has become increasingly tied together through cheap transportation, and regional specialization of resource extraction or processing,
Fourth, American political policy and legal institutions have generally supported the logic of private enterprise development, promoting and defending individual private property rights over social and environmental concerns, eschewing control of private lands even for purposes of conservation; and also providing abundant government assistance for the profitable purposes of agriculture, lumber, oil, and mining interests. The government has increasingly underwritten the needs of the large companies representing the more “rationalized,” efficient sector of their respective industries.
Nonetheless, sharp criticism of both the economic rationality and the corresponding political policy has surfaced in every age of American social life . . . Very often voices of conservation have been muffled in the roar of industrial progress, or have been so rare as to be insignificant forces; sometimes the entire conservation movement has been coopted and defanged by corporate interests. But the critical voices and collective environmental protest have returned, just as the great social movements continually come back after seemingly irreparable setbacks. Without the confidence that this kind of realization brings, the reading of history, social and environmental, could prove very depressing indeed.
---- American Environmental History: The Exploitation and Conservation of
Natural Resources by Joseph M. Petulla (Boyd & Fraser: 1977)
ENVIRONMENTAL HISTORIAN JOSEPH PETULLA:
VERTICAL INTEGRATION AND MONOPOLY
"MANIFEST DESTINY OF CAPITALISM"
From 1900 to 1920 has been called the "Golden Age of Agriculture." an age
old-timers often have referred to as the "good ol' days," The period, however,
was not without its problems; some of which would persist and fester to this
The dawn of a new century brought relative prosperity and abundance to American agriculture after the recurring depressions of the late 19th century. By 1910 the purchasing power of farmers would at last equal that of urban, industrial workers, resulting in a four year period that would soon become in the decades following the basis for calculating "parity" prices for agriculture.
What happened in these first twenty years of the new century, therefore, is crucially important to any study of the chronic agricultural depression of most of the 20th century. While these decades would alter the character of American agriculture the social transformations that took place proved to be so rapid and profound for farmers and their communities they never be able to adjust adequately.
Farm prices moved upward, in some cases more rapidly than the increase in the
general price level. Steam power and broader-based education by the State
Experiment Stations and USDA would also come to play important roles in
increasing farm production.
Following the panic of 1893, a severe drought triggered a marked decline both in the number and quality of livestock and a dramatic increase in the price of two essential winter feed crops --- corn and hay. These unfavorable weather conditions in turn accelerated the acreage devoted to grain production in 1895 and early 1896, leading to exceedingly low prices for both farm products. Prices would remain low for the next year or so while the nation struggled with the currency question.
Several countries abroad, however, began to have short crops of grain and feed in 1896, so by the end of 1897 commodity prices began to rise. Soon thereafter the U.S., still a debtor nation, resolved that the best method of meeting its foreign obligations was through exporting its agricultural products.
The influential Iowa farm editor, Henry C. Wallace, described this period, writing in 1900:
"The farmer is the main element in national prosperity because there are so many of him. When the farmers prosper, have money to pay their debts, provide for their families, and make improvements, good times are clearly in sight, as they were in 1897. The farmer's money started the mills and factories all over the land. For two or three years they had been running on short time, the country was bare of manufactured products, the farmers had great need of them, and this farm prosperity started a wave of prosperity among all classes, which has continued to the present hour."
Some believed that a "surplus" of farmers created this new "wave of prosperity." "In very truth," one observed, "when enough [farmers] have been driven into manufacturing . . . they would be numerous enough to manufacture two or three times as much as this country could consume and the surplus would have to find a foreign market."
Economists like Michael Perelman, author of Farming For Profit in A Hungry
World: Capital and the Crisis in Agriculture, have even suggested that this
surplus and its "wave of prosperity" contributed directly to World War I.
"Once the farm surplus turned into a surplus of goods in general, the momentum generated in the drive for agricultural exports continued as a policy to expand manufacturing exports as well. The U.S. was eventually drawn into conflict with the other great industrial nations in a world struggle over markets which culminated in World War I."
It was at this time farmers were also accelerating their struggle against the trusts and tariffs, believing that protectionism, while benefitting the trusts, raised farmers' costs and reduced their overseas markets on the other.
During the Progressive era, which reached full flower in the early 1900's in the first Theodore Roosevelt administration, it was widely acknowledged that the U.S.'s "new wave of prosperity" was creating enormous social and economic problems. However, it was believed that that same system that created them could solve them. Consequently, progressives argued, if officeholders and businessmen were honest, upright, good and efficient, and applied the principles of science with the public good in mind, all the apparent evils of the time would disappear.
They also believed that scientific management and monopoly integration and
power, if used wisely, could assuredly benefit all of society. To progressives,
therefore, trusts were a fact of life; it was simply a matter of "good" and
The key to the monopoly question became one of motive rather than the fact that monopolies. When Edward Harriman and J.P. Morgan's fight for control of the railroads in the Midwest went to the Supreme Court and the Court ordered Morgan's Northern Securities Company dissolved because of its intent to restrain trade in interstate commerce, the "rule of reason" in anti-trust judicial opinion was introduced.
"Rule of reason" considered only motives, good or bad, behind monopoly, not the de facto economic effects of the combination. In dissenting from the majority opinion Justice Oliver Wendell Holmes wrote that precedents should be sought in common law to distinguish between "reasonable" and "unreasonable" intent in restraint of trade. In writing for the majority Justice John Marshall Harlan expressed the idea that every such combination restrains trade by its very size and is to the public's detriment.
To the scientists, professional people, businessmen and politicians --- the American elites --- bigness and vertical integration was the assured means for a more efficient, stable and prosperous society as a whole. Further, they sincerely believed that vertical integration and/or monopoly was, in Professor Joseph Petulla's words, "the manifest destiny of capitalism."
Ironically, however, while the Morgans and the Rockefellers were preaching this gospel from their Wall Street cathedrals many small businesses were rapidly growing in number and often proving themselves more efficient than the corporate giants. For that reason the elites began looking to the Federal government for relief and for the maintenance of their control in industry. As Petulla, author of American Environmental History observes:
"They became convinced that business and government could cooperate in `rationalizing' the nation's economy for everyone's benefit. By the end of the first decade of the century, businessmen were actually initiating social reforms or at least suggesting national regulations when the demands of individual states and their laws regarding rates, competition or income taxes became oppressive."
By way of example, U.S. Attorney General Olney, as early as 1892, wrote to a close friend of a Burlington Northern rail lines executive that it would be wise for the railroads to use the Interstate Commerce Commission for their own purposes since, "the older the Commission gets to be, the more inclined it will be found to take the business and railroad view of things. It thus becomes a sort of barrier between the railroad corporations and the people and sort of protection against hasty and crude legislation hostile to railroad interests . . . The part of wisdom is not to destroy the Commission, but to utilize it."
A resolution of sorts to the trust and anti-trust arguments in the "Progressive Era" came in 1914 with the passage of the Clayton Act which sought to remove the ambiguities of the older Sherman Anti-Trust Act by more carefully defining what specific acts constituted an unfair competition.
The Clayton Act also attempted to stress the value of competition even though
it provided little ammunition against the huge monopoly conglomerates that by
their very size kept competition out of the market. Curiously enough, labor and
agricultural organizations were exempt from its provisions. To establish a means
of enforcement the Federal Trade Commission Act was passed within the year.
The dawn of the new century found prices for farm products becoming increasingly attractive, although the agricultural community was still faced with its share of problems.
Tobacco and cotton prices were at a level that caused producers to engage in several, and on occasion violent, withholding operations. The Farmers Union and American Society of Equity were founded in 1902 in an attempt to improve and stabilize the economic position of farmers. While the Equity society, a strictly business organization, mainly emphasized buying, rather than selling and soon drifted toward cooperative marketing activities, the Farmers Union began in Raines County, Texas as the Farmers Educational and Co-operative Union of America.
Although it would later turn to the political process, the Farmers Union,
known today as the National Farmers Union, originally stressed the importance of
the "family farm system" to the social and economic health of the country. It
also began attacking farmers' unfair price and market problems systematically.
In its first year, the NFU successfully negotiated cooperative contracts with cotton ginners to acquire a network of cotton warehouses. By 1904 it was withholding cotton from the market in an attempt to fix the price. Later it conducted a series of cotton acreage reduction campaigns. While it succeeded in building warehouses it failed to become a decisive force in the marketplace through control of crop production.
Meanwhile, the farm population continued to decline as the siren call of urban opportunity beckoned the young. In 1909 more than 10 million people were engaged in agriculture on some six million farms which produced one-fifth of the world's wheat crop, three-fifths of its cotton crop, and four-fifths of its corn crop. All these commodities and the rest of the nation's agricultural harvest was being grown on less than one-half of the nation's farmland.
Even though the land was bountiful and productive, the Progressives and Teddy Roosevelt saw a need to "reclaim" arid lands in the west through irrigation. Although midwestern and eastern farmers were alarmed by the possible competition from new farmlands, eastern labor groups and many of the American elite and members of Congress from Western states applauded the idea.
Prior to Roosevelt's call for "reclamation," the Carey Act of 1894 had made a similar attempt to encourage irrigation, but no one devised a method to raise the capital needed to develop new irrigation systems. When the Reclamation Act of 1902 was passed it contained some important provisions designed by Roosevelt to stimulate the "family farm system" of agriculture.
Landowners could apply for federally subsidized water on only 160 acres of their land and absentee landowners were not eligible for such water. While local water laws were to govern water distribution, the receipts from the land sales covered by the Act were supposed to be applied to the construction of reservoirs and irrigation works.
In 1907 the new Reclamation Service was established as an independent Bureau
under the Secretary of the Interior. It was soon apparent, however, that
speculators, knowing the location of proposed irrigation sites, successfully
bought such land from their existing owners even before the Service itself had
approved of the projects for the region. By the time they resold this land the
price was so inflated that only highly capitalized farmers (and in many cases
individuals who owned well beyond the allowed 160 acres) could afford to make
the payments to the speculators or the Federal government.
When public officials objected to this trend, Reclamation Director Frederick H. Newell pointed out that the law intended only the reclamation of arid or semi-arid lands and made no distinction between private or public irrigable lands. By 1910 24 projects were under construction, but only a minute portion of the public was being benefited by the federal water.
The Progressive's attitude and handling of the "reclamation" water issue is also illustrative of what Petulla describes as the "ambiguities" of the Progressive program itself.
"Although Progressives attacked monopolists as engrossers of the public
domain, they allied themselves with monopolists who agreed on the necessity of a
`wise use' philosophy of scientific management and of economic growth and
expansion. And although Progressives were committed to the fight for political
and economic justice and to the idea of grassroots democracy, they did not
hesitate to force the preservation of forest and mineral lands on smaller
political units --- the states and local governments --- in the interests of a
rational `wise use' policy (`socialization of management') and in the name of
all the people.
"In the final analysis they, rightly or wrongly, preferred their own (`scientific') counsel to that of the people, perhaps because they were convinced that powerful corporations would win out if these matters were put in the hands of the `people'."
The government's "scientific counsel" not only took the matter of federal water and reclamation out of "the hands of the people" but placed it part and parcel in the hands of the same "powerful corporations" which would soon come to dominate corporate agribusiness.
Probably no single federal law remained so flagrantly abused, violated and
disregarded by both individuals and Federal government as the reclamation Act of
1902, until both its letter and spirit were drastically altered in 1982.
PETULLA: FAMILY FARMERS
STRANGE MIXTURE OF ENVIRONMENTAL TRADITIONS
BIOCENTRIC, ECOLOGIC AND ECONOMIC
For almost two centuries we have witnessed the evolving industrialization, urbanization and commercialism of our nation's family farm system of agriculture (as Thomas Jefferson forecast). During that time we have also witnessed many attempts to return to the "good ol' days" and the pastoral life of Jefferson's day.
Jefferson saw four basic qualities inherent within the agrarian life as vital to any community or society: namely, retaining control of one's life while nurturing the principle of self-sufficiency, maintaining a homogeneity of interests, a love of naturalism, and the prizing of creativity.
No element in modern society has traditionally projected a more pronounced image of people with fundamental control over their own lives than our nation's farm families. Such control is reflected in many ways, especially the degree of self-sufficiency so often exhibited by farmers and rural people.
Because they have the means to produce their own food and the security provided by the land, farmers have frequently seen themselves as relatively independent of the industrial\commercial world. This degree of genuine and\or imagined independence has not only curious economic, political and psychological overtones, but has also fueled the notion among many that farming is uniquely "a way of life."
This independence has also forced the farm community repeatedly to face the question of freedom and equality. Addressing this very question in a brilliant Gregory Foundation Memorial Lecture on "The Rural Foundation of American Culture" at the University of Missouri on January 26, 1976, Dr. Walter Goldschmidt observed:
"I said earlier that one aspect of the Protestant ethic . . . is a belief that each individual's value is established by his accomplishment, and that for that reason each person should be allowed to grow as wealthy and powerful as he can. But this unfettered growth of wealth and power threatens the very social framework out of which it has emerged. It is not an easy dilemma to solve, for it confronts freedom with equality --- an age-old issue . . .
"How much freedom? How much equality? Very much is at stake, not only for the farm communities, but for the whole of the American polity. If, as I have suggested, the growth of corporate control of agriculture is not a product of efficiency, intelligence and hard work --- of virtue according to the Protestant Ethic--- but a consequence of policies and manipulations, the matter takes on a different character. The task, is to reformulate policies respecting agriculture so that the competitive advantage of large scale operations are removed, so that the ordinary working farmer has an equal chance. If this is done, it may not be necessary to resolve the dilemma between freedom and equality."
Aside from the hoped-for wealth from the goods produced each year on their land, the earth itself has always given farmers a sense of oneness. They see themselves as truly sharing in nature's abundance, yet blessed with the rewarding task of taming nature for a common purpose. This shared pursuit of common interests among farmers often involves cooperative efforts (such as participating in the legendary barn buildings) where each individual in the community seeks to complement ideally, rather than compete with one another.
There is a paradox, however, here for while farmers espouse this ideal of solidarity, believing because farming is their community’s major economic activity, they are the ones who must maintain a large measure of control over their own lives, it is, in fact, the large and often absentee owners and corporate agribusiness interests who now wield the real economic and political power in so many of our rural communities.
Jefferson believed that farmers were more attuned to the rhythms of nature that their urban neighbors. While they have historically had a more acute sense of what Jefferson characterized as "naturalness," their attitude toward nature has, nevertheless, been a strange mixture of environmental traditions.
In American Environmentalism: Values, Tactics, Priorities, Joseph Petulla suggests that part of the reason for these "duel and occasionally paradoxical values of environmentalism," found in people like farmers, lies in the origin and history of their expression.
"Those traditions," he writes, "that have inspired such expressions are called biocentric, ecologic and economic.
"The biocentric tradition stems from the primitive feelings that led the ancients to both fear and to respect nature and the power of mana --- the unknown creator and destroyer of life --- within nature. Although this extraphysical force which gave plants, animals and other objects of nature their unique powers has changed its expression throughout the millennia, it can be seen today in both its progressive and conservative forms.
"The ecologic tradition, has evolved from ancient Greco-Roman theories of natural law which have come to us through the Christian interpretations of teleology (investigation of the purposes and final ends of nature) of the medieval Scholastics, and from them through the natural philosophies of the eighteenth-century Enlightenment, ending finally in what we know as modern science.
"The pursuit of knowledge from the early natural-law philosophers to contemporary scientists has been characterized mostly by the desire to uncover predictable `laws of nature' and to use those laws according to the prevailing religion, ideology or dominant class interests.
"Finally, the economic tradition or our third environmental expression is a modern one and grew out of an attempt to make efficiency a virtue in early capitalistic societies. Max Weber in Protestant Ethics and H.R. Tawney in Religion and Capitalism illustrated the connections between the principles of Calvinism, Puritanism and other religions on the one hand and the development of the middle class in early capitalism on the other.
"Individualistic religions --- that is, religions that focused on the individual rather than the particular church --- appeared to offer both the mark of holiness and eternal rewards as well as those who, with strict self-discipline, lived up to their societal duties. The individualistic virtues replaced social solidarity, fraternity and sympathy when `economic man' was born in the grand alliance between the bourgeoisie and organized religion.
"It then took just one short step for moral and political leaders to support economic theories of `the invisible hand' in which the common good of all could be reached by individual competition. Finally, goodness became identified with efficiency (that is, economic efficiency) and elimination of waste so that even monopoly consolidations and `economic planning' could be touted as more efficient and therefore morally superior.
"Both," Petulla concludes, "the progressive and conservative interpretation of these three environmental traditions --- biocentric, ecologic and economic --- has thus enable various and frequently conflicting special interests within agriculture to gain added sustenance from a variety of history's religious and\or ideological convictions."
For Jefferson, creativity as he exemplified in his own personal life, was a basic quality of agrarian life that was desirable in the pursuit of both liberty and human progress. Again, in this regard farmers have been unique in our society in that they have had the opportunity on an almost daily basis to be part of --- as well as a witness to --- creation, growth, realization, and the enjoyment of the fruits of one’s own labor.
As William B. Wheeler notes in his perceptive 1976 essay on "Jeffersonian Thought In An Urban Society:"
"How could it be possible . . . that anyone else beside the farmer could establish such an indelible link in the great chain of being, the continuous act of creation? If the creations themselves are not grand (as those of a Carnegie or a Rockefeller or a Morgan), they are not accomplished by an army of laborers or a well oiled mass human machine, but rather by one person who can plan, execute and bask in his successes, however modest."
These four qualities --- retaining control, homogeneity of interests, naturalness and creativity --- often overlap in Jeffersonian thought. They are ideals. Whether such qualities were or are actual components possessed by all or even a majority of farmers in Jeffrerson’s day or since, as Wheeler notes, is almost beside the point.
" . . .the repetition of them by Jeffersonians and farmers alike made them
real in the minds of Americans from that day to this. Indeed, they have become
real and have been seen as the components indispensable to any realization of
the Jeffersonian creed."
A BIT OF PHILOSOPHY
A philosophy professor stood before his class and had some items in front of him. When the class began, wordlessly he picked up a large empty mayonnaise jar and proceeded to fill it with rocks, rocks about 2" in diameter. He then asked the students if the jar was full?
They agreed that it was. So the professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles, of course, rolled into the open areas between the rocks. He then asked the students again if the jar was full.
They agreed it was. The students laughed. The professor picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. "Now," said the professor, "I want you to recognize that this is how your life is put together.
"The rocks are the important things --- your family, your partner, your health, your children --- things that if everything else was lost and only they remained, your life would still be full, and go on. The pebbles are the other things that matter like your job, your house, your car, your pets. The sand is everything else. The small stuff.
"If you put the sand into the jar first, there is no room for the pebbles or the rocks. The same goes for your life. If you spend all your time and energy on the small stuff, you will never have room for the things that are important to you.
"Pay attention to the things that are critical to your happiness. Play with your children. Take time to get medical checkups. Take your partner out now and then as when you first met. There will always be time to go to work, clean the house, give a dinner party and fix the disposal.
"Take care of the rocks first --- the things that really matter. Set your priorities. The rest is just sand."
But then a student took the jar which the other students and the professor agreed was full, and proceeded to pour in a glass of beer. Of course the beer filled the remaining spaces within the jar making the jar truly full.
The moral of this tale is: that no matter how full your life is, there is always room for beer
[The editor thanks a loyal reader Barbara Ross for sharing this timely and
ROLL YOUR OWN BLACKOUT
THE FIRST DAY OF SUMMER
THE LONGEST DAY OF THE YEAR
A TIME THAT CELEBRATES THE POWER OF THE SUN
In protest of George W. Bush's energy policies and lack of support for
efficiency, conservation and alternative fuels, there will be a voluntary
rolling blackout on the first day of summer, June 21 at 7PM-10PM in any time
zone (this will roll it across the planet). Its a simple protest and a symbolic
act. Turn out your lights from 7PM-10PM on June 21. Unplug whatever you can
unplug in your house. Light a candle to the sun god, put a candle in your
window, kiss and tell, make love, tell ghost stories, do something instead of
watching television, or why not go out in the streets and watch the sunlit day
turn to night.
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The next edition of THE AGRIBUSINESS EXAMINER will appear the week of July 2-9, 2001
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AGRIBUSINESS EXAMINER and "Between the Furrows."
THE AGBIZ TILLER, the progeny of the one-time printed newsletter, now becomes
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In "Between the Furrows," besides a modern search engine, there is a wide
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