April 16, 2002   #155
Monitoring Corporate Agribusiness
From a Public Interest Perspective

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GLEN MARTIN, SAN FRANCISCO CHRONICLE: Headed by a take-no-prisoners litigator, the Central Valley's largest farm district has initiated a series of lawsuits and petitions that critics say is threatening to unravel a historic effort to end California's water wars. As director of the sprawling Westlands Water District in the San Joaquin Valley, Tom Birmingham is maneuvering to seize control of vast amounts of California water for his district, which grows much of the nation's lettuce.

Birmingham bristles at being portrayed as a spoiler, saying he is simply fighting for the rights of the farmers he represents. He claims that Westlands has been unduly penalized under CalFed, the government-run cooperative process. At the heart of the issue is CalFed's survival. If the program implodes, California's water will again be wholly up for grabs, leaving no interest group secure --- cities, farmers or environmentalists. Water deliveries could literally depend on the latest successful lawsuit. Birmingham's moves have managed to alienate virtually every other major water stakeholder in California.

"They've been extremely aggressive," said Barry Nelson, a senior analyst with the Natural Resources Defense Council, a longtime foe of Westlands. "They're fighting government agencies, the environmentalists, farmers from other irrigation districts and municipal water districts," Nelson said. "It threatens the very basis of CalFed."

Decades of water diversions have depleted salmon and other fish in the Sacramento-San Joaquin River Delta and San Francisco Bay. The issue became a rallying point for environmentalists in the 1980s, and years of grinding legal battles ensued. But by the late 1990s, farmers, cities and environmentalists had stopped their fighting and had begun to divide up the water in a civil fashion, thanks to CalFed.

Farms, which consume 80% of the state's developed water, have had to make do with less, as more water goes to restore depleted wildlife.

Westlands --- at 600,000 acres, the largest irrigation district in the country --- has seen its annual water deliveries vary wildly during the past decade. Last year, for example, Westlands' water allocation was cut by 632,000 acre-feet, or roughly 55%of the water guaranteed by federal contracts. "Our farmers can't survive with that kind of uncertainty," Birmingham said.

Farmers have always fought environmentalists over state water. What makes the current Westlands battle unique is that farmers are now scrapping among themselves. In September 2000, Westlands asked the State Water Board to divert one- third of the water from the San Joaquin River --- a move that outraged growers in the one million-acre Friant Water Users Authority, a coalition of 25 water districts east of Westlands that uses San Joaquin River water.

Kole Upton, a tall, spare, soft-spoken Friant district farmer who raises wheat, corn, cotton, almonds and pistachios on 3,700 acres near Chowchilla, said the Westlands petition could devastate growers on the east side of the San Joaquin Valley. "Westlands has looked across the fence and decided things are better than what's on their side of the wire," said Upton, chairman of the water authority. "They want it. So instead of bettering their situation, they've decided to attack our supply."

That would be especially tragic, Upton said, because Friant personifies the very concept of family farming. The Friant districts support 15,000 farmers. By comparison, Westlands, three-fifths the size of Friant, has 600 farmers.

Upton said Westlands' approach represents the old way of doing business: Grab as much water as you can from wherever you can, litigate relentlessly if stymied, never give in. But Friant, Upton said, has come to realize that cooperation makes more sense.

The authority has engaged in an unprecedented compact with environmental groups to "rewater" a 40-mile stretch of the San Joaquin River that has been dry for 50 years. The ultimate goal: Restore the river's salmon and steelhead runs. "We may have a shotgun marriage with the enviros, but it's still a marriage," Upton said. ". . . We won't ever see eye to eye on everything, but we've learned we can make real progress together on some significant issues."

Birmingham, for his part, is angered at being portrayed as a spoiler by the state's other water stakeholders.

The district, he and his staff note, is one of the country's most productive agricultural complexes. For two months each year, Westlands grows 95% of the head lettuce consumed in the United States. Birmingham feels betrayed by the CalFed process. He said Westlands agreed in the 1990s to give up 250,000 acre-feet a year on a temporary basis. Since then, he said, the government has implemented additional regulations, continually reducing the district's water supply.

"(Then-U.S. Secretary of the Interior Bruce) Babbitt agreed that a deal is a deal. So what happened?" Birmingham said. Meanwhile, he said, Westlands is being asked to pay for Friant's sins. "When Friant Dam was built, it completely dewatered the San Joaquin," Birmingham said. "That benefited the Friant Authority, not us, and Friant is responsible for the environmental impacts."

Yet Westlands, not Friant, is being asked to bear most of the costs of restoring the San Joaquin, he argues. As for the petition to obtain San Joaquin River water, Birmingham said Westlands only wants its legal entitlement. Not all Westlands growers are completely comfortable with going after another district's water, but virtually all agree they are      parched to the point of perishing. "We desperately need more reliability in our deliveries," said Dan Errotabere, a Westlands grower who farms 3,200 acres of cotton, lettuce, garlic, melons and almonds.

Some relief may be forthcoming. In February, Fresno District Judge Oliver Wanger issued a decision that could result in more water for Westlands from the Delta. And the U.S. House of Representatives is considering a bill by Rep. Ken Calvert, Rep.-Riverside, that would guarantee more reliable water supplies to the district. But the west side's growers are less than confident they will get what they need, and they worry that they will be forced increasingly to rely on salty well water, which is destructive to crops.

"It used to be we'd only use well water during droughts," Errotabere said. "Unfortunately, every year is a virtual drought now because of restricted deliveries. That puts a tremendous strain on the land (because of salt buildup). It also makes the water table drop. If this keeps up, we're going to have to fallow a lot of land around here." That process is already happening, because inadequate drainage has contaminated much of Westlands' cropland with excessive levels of salt.

And although Birmingham has obtained a favorable court ruling requiring the federal government to abide by earlier guarantees to provide drainage for the district's land, it is unlikely any action will be forthcoming. Such a drain would terminate in the San Francisco Bay/Delta system, initiating a frenzy of environmental lawsuits.

Still, the drainage issue has given Birmingham some leverage in flogging a proposal: Westlands, he says, will quit its claim on San Joaquin water if the federal government buys between 150,000 and 200,000 acres of drainage-impaired land. The retired land could be used for wildlife preserves or commercial development, Birmingham said.

Many environmentalists and government representatives are also interested in land retirement, but the devil in closing such a deal could be in the details. The agreement could founder on such points as the price of the land, or whether water deliveries to the retired parcels would revert to Westlands or be retained for habitat restoration.

The bigger question, say Westlands' critics, is whether the district can be trusted to negotiate in good faith --- to sit down at a table it has repeatedly spurned.

"I have tremendous personal respect for Tom, but Westlands has pursued an approach that holds the rest of the state hostage," said Timothy Quinn, the vice president of state water project resources for the Metropolitan Water District of Southern California, the state's largest urban water district.

"To deal with environmental demands, most of the state's urban and agricultural contractors have made revolutionary changes in the way they manage water," Quinn said. "But Westlands is simply continuing the war with the environmentalists. We don't agree with that strategy."


JOE  MENDELSON, CENTER FOR FOOD SAFETY: The Center for Food Safety (CFS) filed a legal petition [yesterday] with the United States Department of Agriculture (USDA) seeking a criminal investigation of two biotechnology companies, Monsanto and Aventis.  The petition is filed on behalf of CFS and the Genetically Engineered Food Alert (GEFA) coalition.  It describes newly discovered evidence that genetically engineered canola seed not approved in the United States may have illegally entered into the commercial U.S. seed supply, potentially contaminating canola seed already sold to farmers.

In the past months, two of the country's largest agribusiness corporations, Monsanto and Aventis, have applied for commercial approval of three varieties of canola, GT200 (Monsanto), Topas 19/2 (Aventis) and RF1 (Aventis).  None of these three canola varieties is currently approved for commercial sale in the United States. The USDA, the federal agency with control over planting and seed sale permission, has not yet approved these canola varieties over concerns that crops can be plant pests. Yet the companies admit that the new varieties may have contaminated U.S. seed supplies, and are now applying for approval in an attempt to avoid a massive food and seed recall.

The Center for Food Safety discovered this new evidence of GE seed contamination through a Freedom of Information Act (FOIA) request. The FOIA documents and USDA environmental assessments clearly show that both companies were aware of the contamination with the illegal seeds and sought USDA approval in an attempt to avoid liability. Included in the materials that the Center for Food Safety requested was a letter from Monsanto from last November to the US Department of Agriculture (USDA) in which the company admits to potential contamination.  "Although glyphosate-tolerant canola event GT200 is not intended to be commercialized . . .[it] has the potential to be present in low, adventitious levels in commercial canola varieties." (Letter to USDA from Monsanto, November 9, 2001)

"This is genetic pollution of our food supply," explained Joseph Mendelson, Legal Director for the Center for Food Safety. "And now Monsanto and Aventis are asking the USDA for a cover-up. We are demanding a full criminal investigation of two the companies, and an inquiry into USDA's actions in not making this matter public."

Monsanto was faced with a similar seed contamination situation in 1997.  At that time, the Canadian Food Inspection Agency ("CFIA") suspended the sale of a Monsanto genetically engineered Roundup Ready canola due to the fact that it was contaminated with an unapproved variety event GT200. The suspension led to a subsequent recall of 60,000 bags of contaminated canola seed (enough to plant 600,000 acres) and forced the Canadian government to broker deals with farmers to plow under fields already planted with the contaminated seed. According to Monsanto, the problem may have occurred because the company allowed the seeds to get mixed up and bred together. "Once again we are faced with a regulatory breakdown with regards to genetically engineered foods; a case in which government oversight has been lax and laws has been broken," said Matt Rand, Biotechnology Campaign Manager for the National Environmental Trust.

A full copy of the petition or further information, can be seen at:


SCOTT KILMAN & JILL CARROLL, THE WALL STREET JOURNAL: Monsanto Co. believes that some of its canola seed might contain genetically modified material that isn't federally approved. Angling to avoid a massive recall of food products, the company is asking regulators to forgive any presence of it.
The St. Louis-based biotechnology company has yet to detect it in the seeds it has tested, but says trace amounts of the material were found last year in Canadian seed, leading it to believe the same is possible in the U.S. In conceding that for three years U.S. farmers have been planting canola seed that may contain certain genetic material that was never meant to leave the laboratory, Monsanto has become the latest example of the biotechnology industry failing to control plants whose genes it has altered.
Monsanto, which is 85% owned by drug maker Pharmacia Corp., Peapack, New Jersey, insists that the canola seed in question is safe to consume. But genetically modified food is an emotional issue for many consumers. And Monsanto's admission is sure to fuel consumer skepticism and inflame opponents of gene-altered crops, who object to the idea of tinkering with nature and who worry about cross-pollination with other crops.
Clearly, Monsanto is hoping to avoid a repeat of the biotechnology industry's most embarrassing and costly episode, in which a variety of genetically modified corn approved only for livestock consumption and industrial use found its way into the human food supply. Called StarLink, the corn was detected in more than 300 products with brand names such as Kraft and Taco Bell, resulting in enormous recalls in 2000. . . . .
The U.S. Department of Agriculture is leaning toward granting Monsanto's        unusual request, which the company made in a November letter, but hasn't done so formally. The Food and Drug Administration is reviewing safety data from Monsanto.

If Monsanto fails to receive federal approval for the altered organism, known as GT200, the discovery of its presence in U.S. canola wouldn't necessarily mandate a food recall, as the laws don't spell it out. But antibiotechnology groups would likely clamor for a recall. The situation is potentially a big headache for the U.S. food industry, because canola oil is a basic ingredient in hundreds of products. Canola's popularity has increased because it is lower in saturated fats than other edible oils. About two-thirds of the canola crops in the U.S. are already genetically modified.

A spokesman for ConAgra Foods Inc., maker of Wesson oil, says the company doesn't screen its canola oil for genetically modified ingredients. He wouldn't comment on what the company would do if GT200 is detected in its supplies.

Monsanto created GT200 in the 1990s while trying to produce a seed capable of growing into a canola plant invulnerable to Roundup, a Monsanto weedkiller. Such a plant would enable farmers to liberally apply the herbicide without damaging their crop. Ultimately, Monsanto chose to develop and market canola seed that had been modified differently. Called RT73, it is also invulnerable to Roundup.

Deciding that the second version performed better, Monsanto sought and received federal approval to market RT73 canola seed. Federal scrutiny is required of any plant containing a foreign gene. Monsanto inserted genes from microorganisms into both versions of its canola seed. But in the November letter to the USDA, Monsanto said that GT200 "has the potential to be present in low, adventitious levels in commercial canola varieties." A majority of the 1.5 million acres of canola fields in the U.S. are believed to be planted with seed containing Monsanto's federally cleared Roundup-tolerant gene.

Last year, the GT200 version showed up in Canadian canola seed, forcing Monsanto to recall hundreds of tons of it. Although Monsanto had sought and received Canadian approval for GT200, the recall was necessary because Canada exports huge amounts of canola to Japan, which hadn't approved GT200. Monsanto says it never sold the GT200 version commercially in Canada and isn't sure why it wound up in canola seed there.

In the corn-contamination case of two years ago, StarLink's inventor, the        cropscience division of French pharmaceutical giant Aventis SA, had to stop selling the seed and set aside Û100 million ($88 million) to compensate food companies and growers for their costs.

The fallout was widespread. A market exploded for food products free of genetically modified ingredients. Some farmers got cold feet about jumping into the biotech era. Wheat growers, for example, are telling Monsanto to proceed slowly with plans to supply them with genetically modified seeds. The Aventis cropscience division is being sold to German pharmaceutical giant Bayer AG.

The biotechnology industry concedes the primary point of its opponents --- that crops mate too freely to keep genetically modified versions entirely separate. The wind and insects can carry the pollen of a genetically modified plant great distances to where it isn't wanted: an organic farm, for instance. The pollen from a genetically modified corn plant can fertilize corn that wasn't intended to be bioengineered.

The problem extends to genetically modified crops that are legal but unwanted by a certain segment of consumers. A Wall Street Journal laboratory investigation last year of 20 products labeled as containing no genetically modified ingredients found evidence of the material in 16 of them.

"As we see more and more varieties come out . . . you might find trace amounts [of bioengineered ingredients] in food that didn't go through the full regulatory measure," says Michael P. Phillips of the Biotechnology Industry Organization, an industry trade group. But rather than hysterical reactions, the industry argues that government and society should accept trace-level contaminations. Officials of Monsanto, Aventis and other crop biotech companies want a new policy from the White House that would allow for the accidental presence of trace amounts of some genetically modified materials in seed and food . . . .


ASSOCIATED PRESS: Tyson Foods Inc. allegedly depressed workers' wages by hiring immigrants known to be illegal, according to a lawsuit filed by four former employees. The company and six former managers already face a federal indictment accusing them of conspiring to smuggle illegal immigrants to work at 15 plants.

The civil lawsuit, filed  . . .  by former hourly employees of Tyson's Shelbyville, Tennessee plant, accuses the meat company of relying on temporary employment services and on recruiters it says were paid for each illegal immigrant the company hired. Non-Tyson workers in the same communities as the 15 plants received much higher wages, according to the lawsuit. The lawsuit seeks class-action status.

"The civil action is going to compensate the innocents who have been devastated by the illegal hiring scheme," said John McMahan, a Chattanooga attorney representing one of the plaintiffs. "It's the only way to hold Tyson accountable." Tyson spokesman Ed Nicholson declined comment on the lawsuit.

Tyson, based in Springdale, Arkansas., is the nation's largest meat company, with 120,000 employees. Executives contend the government's case involves a "few managers who were acting outside of company policy." One executive said the indictment followed the company's refusal to pay the government a $100 million penalty.


ASSOCIATED PRESS: The all-American hamburger isn't all American anymore. McDonald's is joining Burger King, Wendy's and other fast-food chains in importing beef from Australia and New Zealand because there's a shortage of U.S. beef that's lean enough or cheap enough for its burgers. "The supply just isn't there," says McDonald's Corp. spokesman Walt Riker.

For now, McDonald's is trying out the imported beef in about 400 of its 13,000 U.S. stores, all in the Southeast. Customers won't know the difference, he said. "We're running a small test using some beef that is top quality." Hamburger chains typically make their patties by mixing lean beef  --- meat that's no more than ten percent fat --- with low-cost fat trimmings that are a byproduct of packing plants. The resulting product is similar in fat content to the ground beef typically sold in supermarkets.

Australia and New Zealand have plenty of lean beef because their cattle are fattened for market on grass, not the grain fed to U.S. cattle. Grain-fed cattle make for juicier steaks because they are higher in fat.

In the United States, the lean beef that the fast-food chains need for their burgers usually comes from female cattle that are slaughtered for ground beef when they are too old for breeding or producing milk. Ranchers have been cutting back on their cow herds for several years, so now there aren't enough of the animals to meet the burger industry's demands. Lean beef from Australia and New Zealand sells for five cents to 20 cents per pound cheaper than U.S. product.

For financial reasons, McDonald's had no choice but to join its competitors, risking the ire of U.S. cattle producers by importing some beef, said Steve Kay, editor of Cattle Buyers Weekly, an industry newsletter. McDonald's announced last month that its profits were being hurt by weak currencies and that first-quarter earnings would not meet Wall Street's expectations. "I'm a little surprised that McDonald's has not acted before this to secure their supply lines. I can only surmise that they felt very concerned about the political fallout," Kay said.

McDonald's is the biggest single buyer of both U.S. and Australian beef, which the chain uses extensively outside the United States.

There is no end in sight to the shortage of U.S. lean beef. After several years of strong beef prices, U.S. ranchers are starting to build their herds again and that means keeping some of their female calves for breeding rather than sending them to feedlots to fatten for slaughter. Fewer than five million cows are expected to be slaughtered this year, down from 7.3 million in 1996, according to the Agriculture Department.

Beef imports have risen by a third since 1996, but they are tightly restricted under a law that protects American ranchers from foreign competition. Australia reached its U.S. quota of 378,000 metric tons by December last year. New Zealand filled its limit of 213,000 metric tons in 2000 and came close to reaching it again last year. The quotas could be filled earlier this year, industry analysts say.

The National Cattlemen's Beef Association will oppose any attempt by Congress or the Bush administration to allow Australia and New Zealand to increase their U.S. exports. Instead, American producers are trying to persuade the fast-food industry to make its burgers from more expensive but leaner parts of the cow. "We're more than willing to work with the quick-serve restaurant chains to come up with solutions to their supply needs that involve a domestic product," said Kendal Frazier, a spokesman for the producers' group.

The indictment involves plants in Alabama, Indiana, Kentucky, Mississippi, Missouri, North Carolina, Tennessee, Texas and Virginia.


STEVE TARTER, PEORIA [ILLINOIS] JOURNAL STAR: The McDonald's Corp. will not be seeing some U.S. beef producers smile after the announcement that they'll start buying imported meat. "It means lower prices for us," said Mike Callicrate, a feedlot operator in St. Francis, Kansas, and a frequent critic of consolidation in the beef industry. "I think it's tragic that McDonald's is leading the way in wiping out America's cattle producer."

The hamburger chain announced last week that it was joining other fast-food chains in buying beef from overseas, citing a shortage in the United States of lean meat, the kind preferred for burgers. "The supply just isn't there," a McDonald's spokesman told the Associated Press.

But any U.S. shortage is contested by Callicrate. "They just don't want to pay us," he said, referring to U.S. producers. But Callicrate said there were other factors involved besides price. "Consumers should consider the dangers of transporting food around the globe and the potentially harmful and illegal chemicals and antibiotics used to lowering cost of production," he said.

McDonald's was the last holdout among U.S. fast-food chains to exclusively use domestic beef, said Maralee Johnson, spokeswoman for the Illinois Beef Association in Springfield.

"We understand why producers are concerned about imports. But it's important to note that tariff rate quotas (the amount of beef allowed into this country) haven't changed," she said. "We'll be going to Washington next week to lobby our legislators to make sure that those quotas won't change."

One Illinois rancher regretted McDonald's decision but felt the impact would be minimal with import quotas remaining in force. "At first blush, it pulls at your heart strings. I'd like to see McDonald's keep using domestic product but the important thing is maintaining a set quantity of imported beef," said Jamie Willrett, a rancher from Malta, near DeKalb.

The McDonald's move is all part of global economics, said Peter Goldsmith, a professor with the University of Illinois who will soon visit beef operations in Brazil and Argentina. "It's not unique to ag that big companies are setting up supply lines around the world," he said. "It's a global meat supply. New Zealand can get lamb into Chicago very efficiently and we (U.S. producers) aren't even close in quality and price."

The issue that American meat is superior to that purchased overseas isn't always true, he said. "In some cases, Australia and New Zealand produces a far superior product to what we've got here," Goldsmith said.

"You have to look at who's driving this thing. It's global retailers --- like McDonald's and Wal-Mart. When you look at the rate of investment overseas, I would be concerned if I were in the meat industry," he said.

The McDonald's decision only confirms the need for country of origin labeling, said Callicrate. "The big companies, the big packers --- they want to stop the consumer from knowing where the meat comes from," he said.


A letter sent from the Livestock Marketing Association (LMA) to Michael Roberts, McDonald’s USA president.

Dear Mr. Roberts:

Through various news accounts, we understand that the McDonald's Corporation intends to begin using imported beef, under a limited test, in your ground beef patties in McDonald's restaurants in the Southeast. On behalf of our 800 member markets, order buyers and dealers and the tens of thousand beef producers who market their animals through our livestock markets each week, we wish to express our great disappointment with your decision to look to our foreign competitors for your beef supply.

Some months ago, the Livestock Marketing Association (LMA) joined with other beef industry groups to implement a somewhat onerous producer certification program demanded by the McDonald's Corporation to assure that the domestic beef supply was meeting the highest standards of food safety and quality. LMA member markets and America's beef producers entered into this process not always understanding its necessity or utility.

Nevertheless, they proceeded to implement the program because it was in the best interest of the consuming public. Now, that certification program becomes all but meaningless in the eyes of many in the beef industry and is likely to be cast aside by many markets and producers who now feel abandoned by the McDonald's Corporation decision to use imported beef in its hamburgers.

We can appreciate the realities of the marketplace and the price and supply demands that face your business in the coming years. Nevertheless, we believe our domestic beef supply remains the safest and best in the world and that if the demand is there the supply will follow at a price commensurate with our safe and wholesome product. Thus, we remain hopeful that your test of imported beef will remain just that and not become a regular use of foreign beef in McDonald's hamburgers.

The McDonald's Corporation has taken particular pride in the past in marketing its hamburgers as U.S. beef and American consumers have responded to it by making McDonald's the nation's leading hamburger restaurant. That marketing tool still has relevance today for the American consumer as well as the domestic beef industry and we hope you will not abandon it.

Sincerely, Pat Goggins, President, Livestock Marketing Association



Do you know where the meat you buy comes from? Or who inspected it? Or if anyone inspected it? Americans are concerned with their food's safety and quality. Since September 11 it is more important than ever to have a safe, secure food supply that gives U.S. families informed choices about what they eat. Since September 11, more U.S. consumers are choosing to buy U.S. produced goods.

Currently, U.S. consumers have no way of choosing U.S. meat and produce in the grocery store. U.S. law has required that most retail goods be labeled by their country of origin since the 1930's, but a quirk in the law exempts meat and produce. Four of five consumers support country of origin labeling of fresh produce, 86% support labeling beef, and 90% would buy U.S. beef if given the choice.

Less than 1% of imported food is inspected. The government relies on foreign inspectors to police the plants that send us food --- a system our government's auditors say is not working. As food imports have increased, so have outbreaks of food poisonings.

Simply labeling food by its country of origin does not make it safer, but if you can walk into a clothing store and see where the clothes are made, shouldn't you be able to go to the meat counter and see where the steak your family will eat came from?

Meatpacker lobbyists say labeling is too expensive, but the facilities and systems we need to label meat and produce by country of origin are already in place. Under existing law, meat and produce are labeled up until the time they are unpacked and placed onto the store shelves. The cost of enforcing Florida's labeling law (for fruits and vegetables) amounts to one cent per household per week.

Have you ever wondered where your child's school lunch meat comes from? If your school purchases through the federal school lunch program, it is supposed to come from U.S.-produced livestock. Any company that sells meat to the government --- that's all big companies --- is required to verify the source of raw materials used. They do it for the government; why not for consumers?

Opponents claim labeling imported food would be an unfair trade barrier. But thirty of 37 U.S. trading partners require country of origin labeling for imported meat, or produce, or both.

Why do meat packers want to deny you the right to know where your meat comes from? You can tell where your T-shirt came from. Shouldn't you have the right to know where your T-bone came from?

Right now, Congress is merging House and Senate versions of the farm bill. Both bills require labeling fruits and vegetables by their Country of Origin; the Senate version also requires labels for beef, pork, and lamb.

Call the U.S. Capital switchboard at (202) 224-3121, ask for your Senators and Representatives, and tell them to support country of origin labeling for all U.S. meats and produce!

Shane Kolb is a rancher from Meadow, South Dakota, and Chairman of the Agriculture and Food Issue Team of the Western Organization of Resource Councils. WORC is a regional network of grassroots community organizations in North and South Dakota, Wyoming, Colorado, Montana, Idaho, and Oregon.


PAUL BEINGESSNER, CANADIAN COLUMNIST: It is interesting these days to read American farm news from the states that border western Canada. The challenge to the powers of the Canadian Wheat Board launched by various American farm interests and state agencies is still a hot topic. Reading these reports, and comparing the American version to that of Canada could make you wonder if it is even the same issue that is being discussed.

According to reports from the Canadian Wheat Board, Canada won the challenge, because the U.S. International Trade Commission itself refuted the American charge of predatory pricing, and the American government did not apply tariffs against Canadian imports. The Americans even said that to do so would be in violation of the Free Trade Agreement between Canada and the U.S.

The Americans see things differently. According to the North Dakota Wheat Commission, the US Trade Representative found Canada guilty of being an unfair trader and is doing all in its power to bring the CWB to its knees. "The Government of Canada grants the Canadian Wheat Board special monopoly rights and privileges that disadvantage U.S. wheat farmers and undermine the integrity of the trading system."

American arguments center on two main points: 1) that government loan guarantees allow the CWB to borrow operating money at very favorable interest rates and 2) the CWB does not need to worry about marketplace discipline because the federal government will bail it out if it runs a deficit in any pool account. (This hasn't happened in many years.)

Always missing from American discussion of the issue is any mention of the finding by the U.S. International Trade Commission that Canadian durum in the U.S. consistently sells for more than American durum. We make an awfully poor predator in this case!

In Canada we like to make much of the massive U.S. subsidies to farmers through loan deficiency payments and the like. We often forget that the Americans also have huge domestic food aid programs that prop up prices for agricultural commodities. Statements from American farm groups do not mention any of this, and don't appear to see the advantage given by the CWB as a way to offset somewhat the great disadvantage we face on this continent.

American ag lobby groups are never slow to notice any dissention in Canada about the role of the CWB. Recently the North Dakota Wheat Commission (NDWC) quoted at length from an article in the Western Canadian Wheat Growers Association magazine criticizing the CWB monopoly. The Wheat Growers took the side of the Americans saying "It is hard to argue that the CWB operates commercially when its borrowings are guaranteed, and its bad debts taken over by the government.". Citing
polling evidence, they also state that "Farm opinion on the CWB is shifting dramatically and almost daily, and the shift is away from supporting the Board.". While no one has ever seen those polls, the CWB director elections coming up this fall should provide some evidence as to the real feelings of farmers.

The NDWC repeats the unsupported Wheat Grower assertion that it has "thousands of members in western Canada."

The increasingly shrill voice of the Wheat Growers on this issue sometimes seems intended to give fodder to the American fire. It is, in fact, Wheat Grower support that is waning rapidly in western Canada. This is evidenced by their sparsely attended annual meeting in Regina and the downsizing of their operation brought on by financial problems. This is perhaps inevitable when the focus of a group narrows to a single issue and the message is always negative.


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