Monitoring Corporate Agribusiness From a Public Interest Perspective
A.V. Krebs  Editor\Publisher
Issue #128                                                                      October 13, 2001


Ironies abound !!

We read a flag-waving self-aggrandizing national media praise our government for its 37,000 meals a day food-from-the-sky Afghanistan, while voices like the Nobel-winning French organization Doctors Without Borders are barely heard as they charge that the effort is "virtually useless and may even be dangerous. Furthermore, the confusion between military and humanitarian operations only increases the danger for already complicated humanitarian action, limiting even further the possibilities of intervention," the aid group said.

One aid group after another echoes such an assessment, where several million Afghans face the imminent threat of starvation, as some of the food, inevitably, is landing in what has been termed "the world's largest minefield."

We learn that packages, which bear the words in English and Spanish (!!!) "Food gift from the people of the United States of America," are being dropped from two C-17 cargo planes, packed in crates designed to break open on hitting the ground, with each package having its own paper wing attached to help it survive the high-altitude drop.

We are being told that these "humanitarian daily rations," each packet containing 2,300 calories, barely enough to sustain one person for one day, are as important for their "psychological value" (read propaganda) as their nutritional effect, because the packages often get into the wrong hands.

Each package contains:
* Beans and lentils in tomato sauce;
* Peanut butter;
* Strawberry jam;
* Fruit bar;
* Beans and tomato vinaigrette;
* Biscuit, shortbread and fruit pastry;
* Utensil package of salt, pepper, napkin and a match.

We read that United Nations estimates that there are 7.5 million hungry people in Afghanistan. If every ration pack reached a starving person, then one two hundredth of the vulnerable can be fed by the humanitarian effort in one day. The U.S. Department of Defense has announced that it possesses a further two million of these packs, which it might be prepared to drop. If so, they could feed 27% of the starving for one day. Four weeks remain before winter envelops Afghanistan, during which enough food must be delivered to last until March. Yet we are prepared to drop barely one quarter of one day's needs.

We are hear Defense Secretary Donald H. Rumsfeld defend these air drops stating "it is quite true that 37,000 rations in a day do not feed millions of human beings . . . on the other hand, if you were one of the starving people who got one of the rations, you'd be appreciative," while Peter Bell, president of CARE USA, points out that the packets “can fall on people, they can cause hungry people to trample over one another when they land, and they can fall into the wrong hands.”

Against such a cacophony of hypocrisy and contradictions, we listen to President-Select George W. Bush appeal to the children of America to send dollar bills for Afghanistan humanitarian relief as we continue a bombing campaign that is likely only accelerating the momentum of mass starvation in the country.

At the same time, Bush's fellow party member Sen. Richard Lugar (Rep.-Ind.), ranking minority member on the Senate Agriculture committee is deploring the rush to pass a farm bill as "irresponsible," adding, "Let's come off of it . . . we have gone to desperate means to curtail (grain) supplies in this country. To imply somehow we need a farm bill in order to feed our troops and feed our nation is ridiculous. The facts of life are we've got it coming out of our ears."

Meanwhile, we watch nightly on our television sets humanitarian aid trucks located in Pakistan being loaded with grain hopefully destined for the starving millions in Afghanistan in bags emblazoned with "USA" across their front, while many of the producers of that very same grain are becoming increasingly dependent on food stamps for their own daily bread.

Judging from some of the news stories we have seen and e-mail we have received (see below) in the past month one might easily get the impression that the causes of the many ills that affect us as a nation at home and abroad can be placed at the farm gate. A careful reading, however, of such invective reveals that for the most part the general public, along with social commentators, academics, and politicians have not a clue when it comes to distinguishing between family farmers and corporate agribusiness men and women.

One, for example, need only look at the current debate about the current farm bill wending its way through the Congress and the battle over who gets farm payments and what amounts they receive to see the general ignorance of farm economics and the current state of American agriculture.

To lump Maurice Wilder, a Clearwater, Florida., developer who controls 130,000 acres of farm and ranch land in eight states who has collected $1.2 million farm "subsidies;" King Ranch Inc., a Houston-based, Texas company that owns 825,000 acres, which got more  than $638,000 under the USDA program; John R. Simplot, a retired tycoon worth $4.7 billion by Forbes magazine's last tally, received $167,000 in aid through the family's Idaho farming empire while a trust in Simplot's name got another $92,000; former Chase Manhattan Bank chairman David Rockefeller, grandson of famed oil tycoon John D. Rockefeller, received $146,000 in subsidies;  IBP, Chevron of California ($100,770), Archer Daniels Midland ($17,793) and Caterpillar ($59,184); California's J.G. Boswell Co. (See Issue #22), or Tyson Foods, or a host of other large agribusiness corporations, with the likes of those farms below $250,000 in yearly sales (approximately 1.7 million farmers), where such payments were not "subsidies" in the popular sense at all, but rather desperately needed farm income, is grossly unfair.

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."

At least 20 Fortune 500 companies and more than 1,200 universities and government farms, including state prisons, received checks from federal programs touted by politicians as a way to prop up needy farmers. Subsidies also went to real estate developers and absentee landowners in big cities from Chicago to New York. Sen. Tom Harkin  (Dem.-Iowa), chairman of the Senate Agriculture Committee, called such examples an "embarrassment, a black eye that can only undermine public and taxpayer support for the programs."

The American Farm Bureau Federation (AFBF), the nation's largest self proclaimed "farm" group and who unquestioningly does more than any other organization in the agribusiness community to give family farmers a "black eye," supports such corporate welfare.

Mary Kay Thatcher, a lobbyist for the AFBF, argues against limits, saying big farms take bigger risks, log higher expenses and produce more of the crop. "It's not like these guys are getting rich from government payments," Thatcher said. "They've had to have them in order to survive."

Until, however, family farmers educate one another, organize and unite in common cause, putting aside their commodity and regional fetishes, begin to think long-term in trade and domestic policy matters, expose the uses and abuses of the undemocratic and self-serving AFBF leadership in its attempt to portray itself as the "voice of American agriculture," and persevere in informing and educating a food consuming public why the nation and the world's economy, health and environment are better served through family farming agriculture than corporate agribusiness, they will continue to see themselves pilloried and depreciated.


LAWRENCE SOLOMON, EXECUTIVE DIRECTOR, URBAN RENAISSANCE INSTITUTE, DIVISION OF ENERGY PROBE RESEARCH FOUNDATION, THE NATIONAL POST (FORMERLY THE FINANCIAL POST): The war has begun and the profiteers are at work, parlaying the tragedy of September 11 into lucre for their pocketbooks. The penny-ante profiteers, like the gas station operators that preyed on public fears and jacked up pump prices to $5 a gallon, have already been shamed into repaying their ill-gotten gains. The big-time profiteers don't shame so easily.

In past wars, the big winners were the arms dealers and other suppliers to the military. This time around, the big-time profiteers don't supply the government. They sponge off the government. At the head of the sponge line are the United States' farmers. Prior to September 11, farmers expected slim pickings from the public purse. Because Americans didn't want to raid their Medicare or Social Security funds to provide pork to farmers, the Agriculture Committee's ranking member in the House of Representatives, Charles Stenholm, reluctantly conceded that hopes for a big farm-subsidy package were "dead."

A few days later, terrorists struck the World Trade Center and the Pentagon, and a savvy Mr. Stenholm decided the time was right for him to strike, too. The "need for a new agriculture policy may have been enhanced," he decided, setting to work to convince his fellow legislators that September 11 makes agriculture funding a priority. The farm lobbies smell victory, too. "We're just going all out trying to line up votes," said Bob Stallman, president of the largest farm lobby, the American Farm Bureau Federation. In the wake of the tragedy, Mr. Stallman and his farm friends in Congress are seeking a 75% increase in farm subsidies.

Mr. Stallman and other lobbyists claim that their resuscitated bill --- the Farm Security Act --- will enhance the United States' food self-sufficiency. They were making this claim prior to September 11, too. "This is going to be an issue for all Americans," Senator Blanche Lincoln of Arkansas had told The New York Times. "Do we want to support American agriculture and ensure our food security and independence, or do we want to lose control eventually to the global marketplace as we have with our energy policy?"

After September11, her words seemed to take on new significance. But they are a fraud. The United States has no food security concerns --- it is an immense food exporter.

The subsidies, which mostly go to wheat and other low-value export crops, do affect global food security, but for the worse. By flooding world markets with subsidized grain, U.S. farmers wreck international food markets and help put farmers in poor countries, who can't compete against the United States' cheap exports, out of business. Instead of feeding themselves, many of these countries instead become food importers or rely on food aid. With their economies undermined, local democracy is stunted and the poor countries' often despotic rulers --- who control aid distribution --- become strengthened. Higher subsidies for U.S. farmers would only increase the size of U.S. exports and undermine poor countries further. . . .

Aircraft manufacturers such as Boeing, which in past wars profited by selling bombers and other military aircraft to the armed forces, saw no silver lining to the clouds of Sept. 11. Because it stands to lose far more business in civilian aircraft than it can ever hope to earn in military aircraft, Boeing's stock plummeted, as did that of most other manufacturers in the aircraft industry. Boeing also announced it would need to lay off
between 20,000 and 30,000 workers. The economic carnage in New York and throughout the country is immense, and although some industries, and some workers, will be receiving federal aid, that aid will not leave them whole. Many Americans are coming together at this time to relieve the suffering, and making sacrifices of their own to help victims of terrorism. Only one large group seeks to turn September 11 into a windfall: flag-waving American farmers.


At a videotaped debate two weeks ago held on the campus of Iowa State University, Dr. Luther Tweeten, Professor Emeritus of Agricultural Economics, made a series of comments about a farm group that deserve public condemnation by the OSU community and all Ohioans.

Dr. Tweeten called the Organization for Competitive Markets (OCM) "a left wing hate group." I am a professor of agricultural economics at Purdue University who has been loosely affiliated with OCM for a few years, and I can attest that this is a totally inaccurate characterization of the OCM, which is a serious middle-of-the-road think tank.  However, what is so reprehensible about Dr. Tweeten's talk was that he compared the OCM to the terrorist groups responsible for the horrible events of September 11th and further suggested that the OCM was encouraging farmers to assassinate agribusiness persons.

Hasn't this country got enough on its mind already?  Do we really need daft professors abusing their academic freedom and stirring up hatreds with defamatory fantasies?

Dr. John M. Connor
Purdue University
Agricultural Economics


Comments by Dr. Luther Tweeten which are at issue:

"Finally, I want to say one element. A very sobering element. A friend of mine, John Tomasek, is here. He is a great friend . . . of agriculture and agribusiness and, best of all, Ohio State football. John told me, and he gave me a book, Lone Tree. Has anyone here read it? It is a poignant account of John's cousin, John Hughes . . . he was killed by a farmer. It reminded me of the events of September 11. Because the guy who killed him was a basically very decent guy. Maybe you think this is inappropriate, but I have a feeling those bombers, those suicide folks of September 11, probably grew up without a crime record in many cases and a lot of people would view them as very decent people even though they ended up as terrorists. What happened along the way to the guy who killed John Hughes and the bombers? Somebody got to them with some highly irresponsible rhetoric. And when we pass around innuendo, as the Organization for Competitive Markets does, for example, as to agribusiness, for people who are on the edge, that is enough to throw them over the edge. In a bunch of cases, bankers were killed by farmers because of that atmosphere of innuendo and fear and hate and so we're
creating left wing hate groups such as the Organization for Competitive Markets, that I think is very damaging to the country. We should wait before we get our facts before we speculate about the mortal dangers of perceptions of some of the mergers or alliances or whatever and not use innuendo."

Tweeten, Professor Emeritus of Agricultural Economics, Ohio State University, September 24, 2001 made these comments at an event billed as a "Debate on the Structure of Agriculture" sponsored by Gamma Sigma Delta, the Agriculture Honorary, and the Leopold Center for Sustainable Agriculture.


"I've been waiting for one of the leftist loonies to respond to my several posts on the terrorist attacks of September 11 in New York and Washington that killed some 7,000 innocent Americans.  The first has now come in: I've just been accused by one A.V. Krebs --- who's been cluttering my in-box for years with plaints about monopolies in U.S. agriculture --- of the dastardly sin of `theoratic racism.'

"`Theocratic racism'?  I confess that this is the first time I've seen the two terms combined.  We all know what `theocracy' is about (rule of the clerics) and, similarly, about `racism' (superiority of one race over others).  I could of sworn (before I heard from Krebs) that `theocratic racism' --- if it means what the two terms imply --- was what I was criticizing, not embracing.

"Does anyone doubt that EVERY Muslim on the planet--including ALL of its roughly 1 billion members (just under 20% of the world's 6.3 billion population) --- considers himself `superior' to those 5 billion (80%) `infidels'?  In the case of some, this delusion of `superiority' is not just theocratic but racial as well, e.g., in the Arabic countries.  Arab Muslims are, in this cosmology, at the very least `more equal' than non-Arab Muslims, not to mention the hated infidels.

The world has a lot of religions and it's a fair inference that the faithful of each consider themselves both theologically and morally superior to the rest of the planet's inhabitants.  But only ONE of them, so far as I know, has produced even a splinter group that insists on the KILLING of non-believers.  Most religions are, of necessity, tolerant --- unable to muster a voting majority in any democratic society, they're powerless to impose their own `theocratic' government on their fellow citizens.  Islam is different.

"Islam now hates.  Back in some of its mists of history, it was supposed to have been a religion of peace and love for all, for BOTH the faithful and the infidels.  The Prophet (hegira, 622 A.D.) unfortunately left behind some less tolerant words that now seem to be swallowing the rest. Fanatical hatred of the infidel --- of the 80% population of the non-Muslim world --- is rapidly becoming the central feature of modern Islam, fanned by
an army of Arab `mullahs' preaching hatred of the `decadent' West and, alas, offering heavenly rewards for suicidal `martyrdom' in the killing of, especially, Americans.

"Allah has not been kind to the 57 Muslim nations of the world.  They are
wretchedly poor --- on average, they have about 1/10th the per-capita income of the Western democracies.  Their people are uneducated, their women are frightfully abused.  They kill each other with terrible regularity. The Muslim world, then, is one of awful ignorance, tyranny, religious fanaticism, and violence.

"So how should the Western democracies respond to this new Muslim savagery, its thirst for Western blood?  The same way they responded to Fascism in the `30s and Communism in the late `40s --- with overwhelming force.  One doesn't sensibly try to REASON with the drivers of, say, Rommel's tanks, nor with those commanded by Stalin.  Similarly, there's nothing we can SAY that will stop those 100,000 or more militant Muslim `mullahs' who're today training still more suicidal crazies to kill Americans.

"The Muslim mullahs have discovered a great route to global power:  Strap bombs on young males who've had their weak brains inculcated with the priestly notion that, after suicidally killing 7,000 American `infidels,' they'll be instantaneously transported to Muslim `heaven,' where they'll be greeted by no less than 70 `black-eyed virgins' who'll serve them through all eternity.

"So what's the remedy?  We're making a beginning in Afghanistan --- smash the Taliban regime that's harboring this modern Hitler, Osama bin Laden. Replace the Taliban with a democratic government and turn the killer and his supporters over to, say, Saudi justice --- which, for all capital crimes, is beheading.  Their bodies could be returned to their families wrapped in pig fat --- thus assuring (per Muslim theology) their enternity in hell, NOT with the 70 black-eyed virgins!

"For EACH future terrorist attack in the U.S. or in any other Western democracy, another Muslim GOVERNMENT that sponsors terrorism should FALL. Soon, the word will get around:  Terrorism against the West doesn't pay. If it takes a while, so much the better: If killing international terrorism should require the overthrowing of 57 Muslim dictatorships, who would mourn?

"In the meantime, I'll assume that Krebs doesn't wear a turban and sport a heavy beard.  But if he does, I hope the airport authorities will let him on board only in his skivvies!

Charles Mueller, Editor

(Editors Note: My use of "theocratic racism," was in response to an earlier Mueller essay e-mailed to me which stated in part: "Today the bombs began to fall in Afghanistan, as well they should.  Is it the start of a long, drawn-out war between the modern, civilized 80% of the planet and a savagely theocratic Muslim world, an impoverished and ignorant 20% of the world's 6.3 billion people?  A war launched by the barbaric 20% to take over the civilized 80%?  Ah, remember Hitler?  But THIS time the drive for world conquest is under God's personal direction, right! " I used the phrase "theocratic racism" as a term of opprobrium in that I believed Mr. Mueller was flagarently generalizing that all Muslims and all Muslim clerics were savages, impoverished and ignorant.)


Christian: One who believes that the New Testament is a divinely inspired book admirably suited to the spiritual needs of his neighbor.

Commerce; A kind transaction in which A plunders from B the goods of C, and for compensation B picks the pocket of D of money belonging to E

Peace: In international affairs, a period of cheating between two periods of fighting.

Prejudice: A vagrant opinion without visible means of support.

Vote: The instrument and symbol of a freeman’s power to make a fool of himself and a wreck of his country.

War: God's way of teaching Americans geography.

--- Ambrose Bierce, The Devil's Dictionary


GEORGE NAYLOR, CHURDAN, IOWA FAMILY FARMER AND BOARD MEMBER, NATIONAL FAMILY FARM COALITION: Gross income doesn't say much.   I see where they are saying that the average household income of these 170,000 farmers with gross sales over $250,000 (that they say produce something like 70-90% of the food) is something like $130,000.   I'd like to see who they are including in this "big farmer" category --- the Boswell cotton outfit, and King Ranch, and some huge fruit and vegetable growers, maybe even Tyson, etc.

I'd like to see the net farm income of farmers who gross between $250,000 and $500,000.  When Successful Farming used to publish their "400 Largest Farms" I would go down the list checking to see what they raised. There were fewer than 20 that raised corn or wheat or soybeans.  Most of them were huge livestock feeding outfits or giant vegetable growers (maybe even vineyards).

I figure that if a person raised 135 bushel/acre (bu/A) corn (about the national average) at the national average loan rate of 1.89/bu that would be only 392 acres of corn to make $100,000.   For soybeans 40 bu/A at the national average loan rate of 5.24/bu that would be only 477 acres to make $100,000.

If you were feeding out pigs, a thousand 260 pound fat pigs at $40/ hwt grosses $104,000.  This used to be a typical number.  Now it would be much higher numbers, but most would not own the pigs anymore.  Fat cattle, 1200 lbs at $70/ hwt gross, it would take about 120 head to make $100,800.  I'm sure most people who bother to feed cattle have that many feeder calves don't add up very fast:  500 lb at $90/hwt equals only $450 so it takes something like 220 feeder calves to equal $100,000.

The loan rates for both corn and soybeans are about two-thirds of the estimated cost of production according to Iowa State University figures.  They include no cost for management and figure labor rates at a little over $7.00/hr.  so that the labor cost for a 800 acre corn and soybean farm turns out to be about $13,000.

I think that people feeding pigs feel lucky if they make $10 per pig.  Some years they loose thousands of dollars.  Around here, very few people have cattle anymore.   Some people have a creek pasture in their family farm so they keep some cows --- usually not many more than 50.  So they have to keep 50 cows fed, housed, and in good health (vet bills) to get maybe 48 calves and gross $21,600.

When you figure their time, ownership costs, vet bills, etc. what's left?   It's amazing.  The big agribusinesses arrange captive supplies because they know any sane person would not take the risk and put in the hard work for such a pittance so they pay their big suppliers higher bucks and pay family farmers and ranchers the spot price because they know that the family producer has no other options.  Scrape by or leave the
family farm and join the unemployed.

Around here now, most farmers are farming 800 to 2000 acres.  Sometimes that is actually shared with other member of the family like brothers or inlaws. Much of the land is cash rented at $125-$175/ acre.  So if you gross $255/ acre and pay $150 cash rent, $30 for seed, $30 for herbicide, $60 for fertilizer, you lose $20 per acre straight away before you pay machinery costs, insurance, other overhead, or family living expenses.  Unless you have inherited a good chunk of your land, more land farm could be to your detriment.

By the way, Freedom to Farm has accelerated the move to cash rent as opposed to crop share (50-50 around here).  With crop share, the land lord shares in the risk.  With cash rent, the landlord gets the rent whether a crop is produced or not.  Freedom to Farm made marketing so mysterious and frustrating that most landlords don't want to bother with marketing the crop.  The relationship is strictly pecuniary --- who will pay the highest cash rent, gets the land. Also, since the rent must be paid regardless, farmers must buy the worthless Federal crop insurance.  Everybody sucks the farmer dry.

There are incredible economic lies being told to justify the new farm bill theory --- i.e. lets not focus on commodity programs; government payments just help the big guys;  government payments result in higher cash rents; and government payments cause over production. This is all bullshit and it makes me so mad that legislators like ones we have in Iowa and the environmentalists fall for this.

"Little guys" are quitting farming all the time, getting jobs in town if they can.  Sometimes they keep the farm and turn to Roundup Ready and a lot of custom work and then do some of the farming if their job gives them a little flexibility in hours.

Obviously, the little guys aren't going to be bidding up cash rents.  The "survivor" class is thinking, "Well, what is my choice, I'd better rent this or buy it while I have the chance --- maybe things will turn around and I'll be a big winner." This kind of pernicious thinking is the result of no stable income program --- not "big" government payments.  The overproduction thing is bullshit, too.  I've read somebody say, Why are we paying farmers to grow crops we don't need?   Don't need?!?

Where do they think the stuff goes?  Carryover as a percent of use is not unusually high.  Low prices are the result of the inelasticity of demand for food and there is no program mechanism to take the few extra bushels out of the market.  Also, if there were no program at all, farmers would still raise corn, soybeans, wheat, etc.  What else would you raise?  Anything else requires incredible amounts of labor. Those things are more and more being raised in third world countries and shipped here. Thus, low prices actually make farmers try to raise more corn and soybeans and wheat, not less.  All at the expense of the environment.


BRANDON MITCHENER, THE WALL STREET JOURNAL: The European Commission fined six companies 57.53 million euros  (US$52.76 million) for fixing prices on sodium gluconate, a cleaning agent. The fine ranks as the ninth-biggest the commission has ever imposed in a cartel case, representing the gravity and duration --- in some cases up to eight years --- of the illegal activity, the commission said.

Sodium gluconate is used in a wide range of cleaning processes for metal and glass such as washing bottles, cleaning utensils and in treating various surfaces. During the period of illegal activity --- 1987 until June, 1995 --- the European market for the product was valued at 18 million euros a year. The six companies together accounted for most of the world's sodium-gluconate production, allowing them to fix prices and carve up markets among themselves.

The biggest fines went to Jungbunzlauer AG of Switzerland, Roquette Freres SA of France and Archer Daniels Midland Inc. of the U.S., at 20.4 million euros [US$9.2 million], 10.8 million euros and 10.13 million euros, respectively. Three co-conspirators --- Akzo Nobel NV and Avebe BA of the Netherlands and Fujisawa Pharmaceutical Co. of Japan --- received smaller fines of 9 million euros, 3.6 million euros and 3.6 million euros, respectively. . . .

Amelia Torres, a commission spokeswoman, said "big companies should know better." The commission's fines are aimed at deterring illegal activity, she said, and companies with large legal departments, especially ones that have already been caught in cartel activities, are aware of the penalties they face if they get caught.

ADM, based in Decatur, Illinois, was also fined by the commission last year for its participation in a global amino-acids cartel and had previously been fined in both cases by U.S. authorities. Indeed, the commission began its investigation in 1997 in the wake of a related U.S. and Canadian probe. ADM, along with Roquette, received a 40% reduction in its fine in view of  the value of its cooperation once the commission's investigation got under way, the commission said in a statement. . . .


With each issue of THE AGRIBUSINESS EXAMINER I am pleased to note the additional readers that have been added to the circulation list of the already over 1000 readers throughout the world who are presently receiving it on a regular basis. At the same time, however, it is disappointing to also see that the same mere handful of generous financial contributors, whose help I sincerly appreciate, care to assist in sustaining the work of the publication.

While THE AGRIBUSINESS EXAMINER is a subscription free e-mail newsletter it always welcomes contributions of any amount in the hope that readers still value THE AGRIBUSINESS EXAMINER to such the extent that they will willingly and generously financially support its continued circulation as it enters its third year. Checks should be made out to:
A.V. Krebs and sent to P.O. Box 2201, Everett, Washington 98203-0201


Readers of THE AGRIBUSINESS EXAMINER are reminded that past issues of the
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THE AGBIZ TILLER, the progeny of the one-time printed newsletter, now becomes an
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