The
AGRIBUSINESS EXAMINER
Monitoring Corporate Agribusiness From a Public Interest Perspective
A.V. Krebs  Editor\Publisher
 
Issue #126                                                                      Sepetmber 28, 2001
 
 

COMMENTARY:
FAMILY FARM LEGISLATION
WHEN ALL IS SAID AND DONE
IT COMES DOWN TO ONE WORD --- PRICE !!!!!

It should come as no surprise when we learn from the New York Times' Elizabeth Becker that the Bush Administration "is uncertain whether there was enough money to pay for the $171 billion House farm bill, raising the possibility that farm subsidies may be the first major program to feel the pinch of the new war-time budget."

Such news only underscores a fact that increasing numbers of the nation's family farmers are coming to recognize that as the world's greatest food producers they are thought of by many in government and by growing numbers of citizens as second-class citizens.

For all too long this country has been deifying farming and the rural life while denigrating the farmer. Few if any in our consuming society make the effort to understand or make the connection between the food they eat and the men, women and children who plant, grow and harvest that very same food.

How U.S. agriculture went from a major sector of the nation's economy to the dependence of family farmers in large measure on the federal governmentís largess can be deduced from federal policy decisions during the Twentieth Century.

Fundamental to that evolution are the issues of income and price; issues inextricably bound together in determining not only class status in rural America, but also the widening gap between rich and poor in our present-day society. Were it not for off-farm income, the vast majority of our 1.9 million farmers today would resemble the majority of the Third World's farmers who are impoverished and enslaved to a globalized transnationally-owned-and-controlled food manufacturing system.

For nearly a century now, the inability of farmers to receive a consistently fair and equitable return for their work and investment has left them with basically three options: selling their land and quitting farming, borrowing money, or seeking income from off the farm to survive economically and maintain ownership of their farms. Their inability to receive a fair and equitable income (to say nothing of simply being able to meet their production expenses) has little to do with their efficiency and much to do with what they are being paid for what they produce.

In 1984, former Texas Agricultural Commissioner Jim Hightower, as Chairman of the Democratic National Committee's Agricultural Council, said in his řnal report on eight nationwide farm policy forums on agriculture: "When all was said and done, it came down to one word: Price . . . The overwhelming consensus among participating farmers was that the other concerns --- overproduction, soil and water conservation, high interest rates, lack of credit, entry by young farmers, the depressed farm service industry, and the farm programís high cost, to name a few --- could and would be solved when farmers received a fair price for their products." "A fair price for their products." That is what is at the root of the family farm depression in America.

Throughout the 20th century we have witnessed a wholesale exploitation of our agricultural system by corporate agribusiness and its "communities of economic interests" determined not only to drive farmers, workers and consumers apart, but also to divert the taxpayers' attention away from the root causes of the crisis. It has done this by preaching about farming practices, "excessive" government regulations, and by replacing a fair price in the marketplace with an unfair and ever-escalating burden of debt.

Many nations in recent years have turned to the United States ó "the world's breadbasket" --- for an exemplary model for food stability and abundance. What they řnd, though, is rapacious corporate agribusiness in place of our nation's once-vital rural economy and its "family farm system." What they hear is self-serving, contorted explanations of that reality by various policy planners and implementers who represent our ever-narrowing "communities of economic interests."

Unfortunately, most farmers and consumers have failed to fully recognize or understand the success of all this corporate/government/land-grant-college planning in destroying farmers' economic and political power through forced liquidations caused, in turn, by low commodity prices that have been forced on farming by the corporations and the banks.

Much is made in recent years since the implementation of the 1995 so-called Freedom to Farm Act of "subsidies" and the fact that a small number of farms have received the largest share of such "subsidies."

In 1999, according to the USDA's Economic Research Service (ERS) farms with sales of $250,000 plus received 45% of such "subsidies," while farms with sales between $50,000 and $250,000 received 41% of such "subsidies," and farms with sales below $50,000 received a meager 14% of such "subsidies." However, for those farms below $250,000 (approximately 1.7 million farmers) such payments were not "subsidies" in the popular sense at all, but rather desperately needed farm income.

Traditionally, the USDA's subsidy programs have been skewed in favor of the large corporate-type farms. Recognizing that fact family farm groups have for many years sought to target government payments to those farmers most in need, but have been singularly unsuccessful in such efforts due to a lack of support from those very politicians and johnny-come-lately groups who now are screaming the loudest over such expensive "subsidies."

In the past week Senator Tom Harkin (Dem.-Iowa) who now heads the Senate Agriculture Committee, joined Richard Lugar (Rep.-Indiana), the ranking minority member, in releasing the committee's new farm bill objectives, many of which were similar to the ideas from the administration.

They said they wanted "a significant change from past policies" and advocated federal help for smaller farmers through conservation programs, new rural aid programs, and greater promotion of trade, which, as Becker reports "would put even more doubt on many of the subsidy programs which  economists say endanger trade agreements."

But, as long as legislation is based upon farmer income, rather than farm price and farm income we are going to continue to see not only ill-conceived and misdirected farm legislation, but the accelerated demise of family farm agriculture in the United States.

Basing farm legislation upon fair prices for farmers rightfully addresses the fundamental problem facing agriculture today, basing such legislation upon income simply relegates it to a societal problem whereby the farmer becomes an indentured servant, the taxpayer pays the bills and their corporate masters reaps the profits.

The Congress has been presented, the Food From Family Farms Act,  a broad-based consensus proposal to restore and maintain profitability on America's family farms and ranches which seeks to provide farmers with fair prices paid by those giant corporate agribusinesses that purchase their raw materials. (See Issue #124)

As they state in their "Prologue":

"Restoring farm income from the marketplace must be the primary focus of any new farm program. Fair prices to farmers don't exist because previous price discovery tools, including production and inventory adjustments, have been eliminated in current farm policy. Powerful lobbying activities of corporate agribusiness giants and their allies caused that to happen. Competition in the grain buying and processing sector has been lacking for some time and grows steadily worse through unrestrained consolidation.

"The growth of corporate factory livestock operations is an example of industrialized food production with gross disregard for human, animal, or environmental resources. Under-priced feed grains, gives an unfair competitive advantage to hog factories, to the detriment of independent farmers. Contract growers no longer make management decisions, but are serfs on their own land. It is in the best interest of farmers, taxpayers, consumers and the environment that the trend toward corporate control of the food system be reversed.

"Farming is a unique and honorable profession, worthy of justice and equity for all participants in the system. Congress must now ensure the economic, environmental and social sustainability of the food production system by enacting a farm program that includes price supports for those agricultural products that are basic to food security for ourselves and for humanitarian efforts when the need arises.

"The provisions crafted in the `Food from Family Farms Act' are predicated on the belief that all countries, including the United States, retain the right to develop farm programs that respond to the needs of their farmers and consumers. Trade agreements should respect a country's needs and traditions for food security, conservation of natural resources, and distribution of economic opportunity."
 

BLACK FARMERS TO BOYCOTT
FIRST UNION CORP. AND WACHOVIA CORP. BANKS

ASSOCIATED PRESS: A group representing more than 60,000 black farmers launched a boycott  . . .  against First Union Corp. and Wachovia Corp., saying the $14.6 billion merger of the two North Carolina banks doesn't add up to more loans for minorities. "We've been out here for four months, and absolutely nothing has happened," John Boyd Jr., president of the Virginia-based National Black Farmers Association, said at a news conference outside First Union's headquarters. The group, which claims 66,000 members, has already written to the Federal Reserve asking it to review the merger. The Fed's board of governors approved the deal Aug. 13. Now the farmers group wants its members to pull their deposits from all First Union and Wachovia branches. The association wants the banks to establish an $81 million Community Development Financial Institutions (CDFI) fund over five years for loans to minority and needy customers in the Southeast.
 

USDA SAYS YES TO TERMINATOR TECHNOLOGY
WILL LICENSE DELTA & PINE LAND

RURAL ADVANCEMENT FUND INTERNATIONAL:  It's official. The US Department of Agriculture [has] announced  . . .  that it has concluded negotiations to license the notorious Terminator technology to its seed industry partner, Delta & Pine Land (D&PL). As a result of joint research, the USDA and D&PL are co-owners of three patents on the controversial technology that genetically modifies plants to produce sterile seeds, preventing farmers from re-using harvested seed. A licensing agreement establishes the terms and conditions under which a party can use a patented technology. Although many of the Gene Giants hold patents on Terminator technology, D&PL is the only company that has publicly declared its intention to commercialize Terminator seeds.

"USDA's decision to license Terminator flies in the face of international public opinion and betrays the public trust," said Hope Shand, Research Director of RAFI. "Terminator technology has been universally condemned by civil society; banned by international agricultural research institutes, censured by United Nations bodies, even shunned by Monsanto, and yet the US government has officially sanctioned commercialization of the technology by licensing it to one of the world's largest seed companies," explains Shand.

"USDA's role in developing Terminator seeds is a disgraceful example of corporate welfare involving a technology that is bad for farmers, dangerous for the environment and disastrous for world food security," adds Silvia Ribeiro of RAFI. Terminator has been universally opposed as an immoral technology because over 1.4 billion people, primarily poor farmers, depend on farm-saved seeds as their primary seed source.

For details, see "2001: A Seed Odyssey" RAFI Communique, January/February 2001, http://www.rafi.org
 

SENATOR FEINGOLD RELEASES REPORT
SHOWING DAIRY FARMERS'
DECLINING SHARE OF RETAIL DOLLAR

U.S. Senator Russ Feingold released the results of a General Accounting Office report that shows dairy farmers receive less than 50% of the retail dollar of a gallon of two percent milk. Feingold also wrote Senators Tom Harkin (Dem.-Iowa) and Richard Lugar (Rep.-Indiana), chairman and ranking member of the Agriculture Committee, respectively, informing them of the report. In the letter, Feingold announced his intention to introduce legislation that responds to GAO's troubling findings by helping dairy farmers improve their management and production practices.

"I write to bring your attention to a recent General Accounting Office report on the dairy farmers' share of the retail dollar, and urge you to include provisions in the upcoming farm bill that will help dairy farmers get a larger share of the retail milk dollar," Feingold wrote. "We must actively support programs to improve viability of diary operations through improved research, development, on-farm extension and education concerning low-cost production facilities and best management practices."

According to the 1997 Census of Agriculture, between 1987 and 1998, the number of dairy farms declined from 202,068 to 165,874. Wisconsin alone has lost more than 13,000 since 1980, more than half of its dairy farms. Much of this loss is due to the dairy farmer's declining share of the retail milk dollar. For the period of time GAO reviewed, the price spread between farm level and retail level milk prices increased in 9 of the 15 markets. GAO's report outlining dairy farmer's small share of the retail milk dollar supports the troubling trend also detailed in the Commission on Small Farms, that in 1981 dairy farmers were receiving a national average of $13.76 per hundredweight. In August of 1997, dairy farmers were receiving a national average of $12,70 per hundredweight and retail prices were at $2.76 per gallon, about 90 cents higher than the retail price in 1981.
 

CACTUS FEEDERS PLANS
TO IMPORT AUSTRALIAN FEEDER CATTLE

RANCHERS & CATTLEMEN ACTION LEGAL FUND UNITED STOCKGROWERS OF AMERICA (R-CALF USA): According to a report from Cattle Buyers Weekly (Report), Cactus Feeders, the world's largest cattle feeding operation, plans to import Australian feeder cattle into the U.S.  R-CALF USA Trade Committee Chairman Dennis McDonald said, "It was U.S. Commerce Secretary Donald Evans who predicted, `the global market belongs to the low-cost producer.' Cactus Feeders is seeking the low-cost producer and we're not it," said McDonald.

The Report claims the first shipment of 5000 head of feeder cattle from Australia could take place in December.  It could be the first of regular shipments of up to 20,000 head at a time.

Cactus Feeders President Paul Engler reportedly said the shortage of good feeder cattle in the U.S. is driving Cactus's decision to import cattle.  According to the USDA Economic Research Service, the U.S. imported 1,025,342,000 pounds (carcass weight equivalent) of Australian beef in 2000, which translates into over a million and a quarter head of live cattle, and 865,595,000 pounds in 1999.  Engler was quoted as saying that Cactus would not attempt to import Australian cattle if U.S. cow-calf producers were losing money.  "It [Cactus Feeders] would never use such imports to leverage domestic feeder cattle prices," he said.

However, the Report says total landed costs for a 660-pound steer from Australia, including quarantine, could cost only 83 - 88 cents per pound.  Current prices for a 600 - 700 pound U.S. steer were recently reported at 92 - 97 with some at $1.02 per pound.  "Just how will that not have a negative impact on U.S. feeder cattle prices?" asked McDonald from Melville, Montana. "Importing cheap foreign feeder cattle will undoubtedly have a negative impact on feeder cattle prices across the U.S.  This year Mexico will likely beat last year's 1.2 million head of live imports and Canada is likely to beat its 960,000 head level of last year.  A million here and a million there and soon you have a sizeable bunch of cattle," he said.

R-CALF USA believes that burgeoning imports have disrupted the U.S. cattle cycle. Historically, periods of high supplies led to lower prices.  Lower prices in turn led to nationwide herd reductions.  Once supplies become re-balanced with demand, prices would strengthen and ranchers would begin recovering from the previous lows.  However, the significant increases in imported cattle and beef act as an artificial replacement for reduced domestic supplies. "Over the past 15 years, imports have grown by over 1.3 billion pounds, the U.S. herd has steadily declined, and prices for finished domestic cattle have remained flat.  In fact, prices have been falling over the past few months and are now below breakeven prices.  The family feeder is being squeezed and we may be witnessing a major consolidation of our feeding industry.  We've already lost 14,000 family feeding operations over the last 10 years," explained McDonald.

For additional details on Cactus Feeders see:
HILLARY RODHAM CLINTON'S $99,537 MIRACLE: IT'S THE PITS!!!
http://www.ea1.com/CARP/tiller/index.html
 

FOOD BROKERS INCREASING CONSOLIDATION
LEAVES CONSUMERS WITH REDUCED CHOICES

KATE MURPHY, NEW YORK TIMES:   . . . Food brokers are responsible for the majority of products, edible or not, that end up on grocers' shelves. They push the products, negotiate  purchasing agreements and ensure that everything is in stock, properly displayed and accurately priced. "You're dead in the water without a  broker," said Burt P. Flickinger III of Reach Marketing, a consulting firm  in Westport, Connecticut

The business is consolidating rapidly, though, a trend that may be reducing consumer choice by killing off both new and familiar brands. That consolidation, much of it since 1997, and the failure in June of one of the largest companies, Marketing Specialists  Inc. of Dallas, has narrowed the field of national companies to three. All are private:  Advantage Sales and Marketing of Irvine, Caliornia.; Acosta, based in Jacksonville, Florida.; and Crossmark of Plano, Texas.

With so few brokers to choose from, a manufacturer is left in a bind, because it is hard to find an agent who does not already represent a competing brand. "We can't take on direct competitors" because of potential conflicts of interest, said Sonny King, chairman and chief  executive of Advantage. John M. McMillin, a food industry analyst at Prudential Securities, added, "That means big trouble if you're the No. 4-and-beyond brand." Examples might include Libby's canned vegetables, from Seneca Foods, or La Martinique salad dressing, from Reily Foods, which lead in certain markets but lag behind nationwide. .  . The consolidation also ties the hands of manufacturers of the three top-selling brands in any category because they have nowhere else to go. "It's not like you can drop your broker if you don't like the service," said a manufacturer of a top-selling snack food, who did not want his name used for fear of antagonizing his broker. "The other two are working for your competitor."
 

"THE FOOD POLICE?":
CENTER FOR SCIENCE IN THE PUBLIC INTEREST
GOT BIG BUCKS TO FLACK FOR GE FOODS

PRWATCH: Last year Michael Jacobson's Center for Science in the Public Interest (CSPI, also known as "the food police") received $200,000 from the pro-biotechnology Rockefeller Foundation to be a moderate voice in the raging debate over genetically engineered (GE) foods. CSPI has since made many statements very favorable to GE foods and recently called for government action against companies marketing non-GE foods. Ironically, CSPI's Integrity in Science Project criticizes and reveals the special interest funding and agendas of other nonprofit organizations. Apparently the food police don't see accepting a $200,000 grant to flack for GE food as a "competing interest" to their own objectivity and scientific integrity.

This is an excerpt from the CSPI press release targeting organic food companies:

"The Center for Science in the Public Interest (CSPI) today asked the U.S. Food and Drug Administration (FDA) to take enforcement action against seven food manufacturers whose product labels deceive consumers with false or misleading claims about the absence of genetically engineered (GE) ingredients.

"CSPI's complaint concerns Polaner's All Fruit Spreads, Earth's Best Baby Foods, Healthy Times Oatmeal with Banana Cereal, Van's Organic Waffles, Spectrum Canola Oil, Bearitos Tortilla Chips, and Erewhon Wheat Flakes. CSPI is not concerned about the quality or safety of the products, but charges that their labels violate the Federal Food, Drug, and Cosmetic Act and FDA's guidance about labeling foods for GE content. .  .

"`Consumers want information about GE ingredients in their foods, but that information should be presented in an accurate and non-disparaging manner,' said Gregory Jaffe, co-director of CSPI's Biotechnology Project. `These labels bear false or misleading statements such as "No GMO's" that take unfair advantage of consumer concerns and
lack of knowledge about GE crops. The labels imply that the absence of GE ingredients makes the products superior, when that is not the case.' FDA, the American Medical Association, and many other health organizations have determined that GE crops are as safe to eat as traditionally bred crops. In fact, traditionally bred crops may be treated with more pesticides, or more dangerous pesticides than their bioengineered counterparts.

 ". . . Given many consumers' innate skepticism of any new technology, CSPI said that manufacturers must be careful not to mislead consumers. `FDA needs to send a clear message to manufacturers that label statements need to be both accurate and not imply superiority,' added Jaffe. Anticipating the day when biotechnology is used to provide consumer benefits, CSPI's letter also urged the FDA to guard against deceptive
claims about such benefits. `The FDA should nip this growing problem in the bud.'"

For additional details see:
http://www.prwatch.org/cgi/spin.cgi
 

DOLE COMPANY'S LABOR HISTORY
DEMANDS CLOSE SCRUTINY

ANDY FURILLO, SACRAMENTO BEE: The Dole Food Co.'s unexpected layoffs of 1,900 workers in the southern San Joaquin Valley again has put a focus on the firm's labor relations record. In the past decade, it has paid out more than $1 million in two lawsuits filed by workers in California who accused the company of gender discrimination and of not paying them for their mandatory travel time. Dole also is the last remaining corporate defendant in a lawsuit filed on behalf of 26,000 banana workers around the world who claimed they were sterilized through exposure to a pesticide. The other defendants paid $52 million to settle the accusations against them.

In addition, the company has acknowledged locking out 120 union workers for more than a decade when their contract ran out at a vegetable cooling plant [Dole-owned Bud Antle of California] in Salinas, and it successfully fought off another lawsuit filed in 1994 by 400 Ventura County strawberry workers who charged that they were let go after voting to unionize. Dole is headed by David H. Murdock, a longtime Republican Party financier who has been chairman and chief executive officer of the company since his Flexi-Van Corp. acquired the company in 1985.  . . . Company officials declined to discuss in detail the two lawsuits that resulted in payouts of $530,000 and $550,000 with company employees, according to court records and plaintiffs' attorneys.

The first was filed in Los Angeles federal court in 1993 by female citrus packers at Dole subsidiaries in Tulare and Ventura counties. The company settled the case in which the employees charged they were denied more stable general labor jobs because of their gender. The second suit was filed in Monterey County in the mid-1990s by employees of Royal Packing Inc., another Dole subsidiary. The company did not pay field laborers at their Salinas job site for the time it took them to get to work, even though the terms of their employment required them to ride to work in company vehicles. The workers won on a state Supreme Court appeal last year. The sterilization of 26,000 banana workers through the use of 1,2-dibromo-3-chloropropane (DBCP) gained international attention in the 1980s. Attorneys in the Texas class-action suit charged that Dole continued to use the pesticide for seven years after it was banned in the United States. . . .
 

"BETTER LIVING THROUGH CHEMISTRY" ????

MAUREEN DOWD, NY TIMES: After all these finicky years of fighting everyday germs and inevitable mortality with fancy products, Americans are now confronted with the specter of terrorists in crop dusters and hazardous-waste trucks spreading really terrifying, deadly toxins like plague, smallpox, blister agents, nerve gas and botulism. Women I know in New York and Washington debate whether to order Israeli vs. Marine Corps gas masks, and half-hour lightweight gas masks vs. $400 eight-hour gas masks, baby gas masks and pet gas masks, with the same meticulous attention they gave to ordering no-foam-no-fat-no-whip lattes in more innocent days. They share information on which pharmacies still have Cipro, Zithromax and Doxycycline, all antibiotics that can be used for anthrax, the way they once traded tips on designer shoe bargains. They talk more now about real botulism than its trendy cosmetic derivative Botox. They are toting around flats and sneakers in case they have to run, and stocking up on canned tuna, salmon and oysters, batteries and bottled water . . . My friend Sally Quinn, a Washington writer, has been trying to order gas masks for her family for several days, only to find sold-out stores, with new orders not expected until late October. "We had such a lapse of imagination before this happened," she said, "that now we have an overstimulation of imagination."

http://www.nytimes.com/2001/09/26/opinion/26DOWD.html
 

WALL STREET "OUT TO LUNCH"
DECLINING "TO JOIN THE PATRIOTIC PARADE"

MARY MCGRORY, WASHINGTON POST: Many Americans wept this week when the New York Stock Exchange ceremoniously reopened. The mere fact that the heart of U.S. commerce was beating again just six days after two jetliners-turned-missiles had blasted its neighborhood to kingdom come was a victory. But Wall Street declined to join the patriotic parade.

The country had rallied around the flag, and there had been an explosion of niceness in our national life, but the street said no. It rejected Vice President Cheney's "Meet the Press" invitation to "stick their thumb in the eye of the terrorists." Investors cast a cold eye on the bottom line.

They ignored Treasury Secretary Paul H. O'Neill's prophecy that if they did the right thing now, and bought stocks, they would be glad next year. They focused on the airline CEOs heading for the Oval Office to beg for a bailout. If an economic slump is added to a stricken country's woes, that's the way the cookie crumbles at the tycoon tables. When it came Wall Street's turn to be wonderful, it was out to lunch. . .
 

RECOMMENDED WEB SITE:
CORPORATE AGRIBUSINESS RESEARCH PROJECT

Readers of THE AGRIBUSINESS EXAMINER are reminded that past issues of the
newsletter can be found at the Corporate Agribusiness Research Projectís web site on
the Internet. The CARP web site features: THE AGBIZ  TILLER, THE
AGRIBUSINESS EXAMINER and "Between the Furrows."

THE AGBIZ TILLER, the progeny of the one-time printed newsletter, now becomes an
on-line news feature of the Project. In-depth essays dealing with corporate agribusiness
activities are posted here periodically.

In "Between the Furrows," besides a modern search engine, there is a wide range of
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agribusiness. In addition to CARP's "Mission Statement," "Overview" and the Project
director's "Publication Background," the viewer will find a helpful "Fact Miners" page
which is an effort to assist the reader in the necessary art of researching corporations; a
page of  "Quotable Quotes" pertaining to agribusiness and corporate power; a  "Links"
page which allow the  reader to survey various useful public interest, government and
corporate web sites; a "Feedback" page for reader input, and  a page where readers can
order directly the editor's The Corporate Reapers: The Book of Agribusiness.

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