The
AGRIBUSINESS
EXAMINER
May 31, 2002   #165
Monitoring Corporate Agribusiness
From a Public Interest Perspective

EDITOR\PUBLISHER: A.V. Krebs
ADDRESS: PO. Box 2201, Everett, Washington 98203-0201

E-MAIL: avkrebs@earthlink.net
WEB SITE: http://www.ea1.com/CARP/
TO RECEIVE: Name and e-mail address
Contributions Welcome
 

COMMENTARY:
ABC-TV NEWS  "BITTER MEDICINE"
SUGGESTS FRIGHTENING PARALLELS
WITH FARM CHEMICAL POISON MANUFACTURERS

One can only hope that those family farmers who were fortunate enough to see Peter Jenning's "Bitter Medicine: Pills, Profit and the Public Health" on ABC-TV Thursday night did not let it escape their notice that the same situation the public finds itself in being at the mercy of the pharmaceutical industry when it comes to health care is the same for farmers when it comes to their reliance on chemical poisons in the production of their crops.

Not only in many cases are the same companies involved, but in matters of who pays for research, patent awards, heavy advertising and defraying costs the predicament is the same as the articles below illustrate.

Ever since the end of World War II the nation's and the world's farmers have been fed a steady diet of "new and improved" chemical poisons, slickly obfuscated by the use of the word "pesticides." As the late brilliant and outspoken University of California entomologist Dr. Robert van den Bosch characterized it:

"Fundamentally, pest control as it is now practiced . . . is essentially not an ecological matter. It is largely a matter of merchandising. In essence, we are using the wrong kinds of material in the wrong places at wrong times in excessive amounts and engendering problems which increase the use of these materials, adds to the pollution problem, adds to the cost of agricultural pest control, and adds to what you might describe as the      concern of the general public."

By emphasizing pest eradication rather than pest control the manufacturers of these chemical poisons have managed to keep farmers on a treadmill, promising with each new product that there problems with pests will be solved, which in fact often only generate new problems with both the loss of the pest predators, but also increasing the immune system of many pests as we have seen with mosquitos and DDT giving rise to whole new generations of super bugs.

Yet in the farm press, which would undoubtedly disappear over night were the chemical poison manufacturers and the farm machinery manufacturers ever to yank their advertising for it pages, continually show farmers pictures of lush green crops and weedless and pest free fields effectively propagandizing  and economically seducing them into buying more of the company product.

At the same time the poisons that they can't sell to this nation's farmers because of government restrictions they export abroad which are in turned used on those crops and produce which are increasingly being imported back into the United States with less than one percent, according to the General Accounting Office, being inspected for harmful residues.

At the same time a large measure of the research dollars that go into developing these chemical poisons come out of the tax payer's pockets, just as in the pharmaceutical industry, by way of the efforts of our nation's land grant university's who in many cases not only do the research and development, but through their various extension services, do the actual promoting of these poisons in our fields and orchards.

The time has come for family farmers and grassroots farm organizations to take a long and hard look at these chemical drug dealers who not only care little about despoiling the environment, endangering the health of the men, women and children who work in our fields, but continue to force consumers to play a game of Russian roulette when it comes to the health and safety of the food they buy for themselves and their family.

Viewing "Bitter Medicine" is most certainly a good starting point in that quest.
 

"BITTER MEDICINE:
PILLS, PROFIT AND THE PUBLIC HEALTH"

ABC-TV NEWS: Consumers spent $90 billion more on prescription drugs last year than the $64 billion that was spent just six years ago. Are consumers getting their money's worth from the pharmaceutical industry?

First there was aspirin to treat pain and inflammation, then came Advil, Aleve, and 40 other similar drugs. By 1999, Celebrex and Vioxx were on the scene, and they now outsell every other prescription pain reliever on the market. Every year, $4 billion is spent on Celebrex and Vioxx alone.

"There's never been a study showing that they are more effective at relieving symptoms of joint pain and inflammation than all these other medicines that have been available for many, many years and are much more affordable," said Dr. Matt Handley, a physician with Group Health Cooperative, a nonprofit managed-care organization in Seattle.

On top of the $532 million spent every year on over-the-counter drugs, consumers spent $90 billion more on prescription drugs last year than the $64 billion that was spent just six years ago. And yet, there is little evidence that the huge increase in spending is dramatically improving the health of Americans. Are consumers getting their money's worth?

Why do prescription drugs cost so much money? According to a Tufts University study, on average it costs $802 million to bring one new medicine to market. The high cost of drug development is the industry's justification for the high price of drugs.

"The $802 million figure is used by pharmaceutical firms, I believe, to help explain the enormous challenge involved in bringing a new product to market," said Ken Kaitin, who runs the Tufts Center for the Study of Drug Development. "These are extraordinary costs to bring individual products to market."

While it is not possible to look at a breakdown of research costs --- companies aren't required to make this information public --- their profits are public, and the drug industry is the most profitable industry in the country.

"Their R&D [research and development] costs could be $15 billion, $15 trillion, $15 gazillion, and it wouldn't matter if their profits are double that," said Dr. Marcia Angell, a former editor of the New England Journal of Medicine.

The drug industry claims its high profits are necessary in order to conduct expensive research and development. It spends more on research than any other industry. The federally funded National Institutes of Health may be the drug industry's biggest benefactor. This government agency alone will spend more than $23 billion on research this year. And much of the research benefits the drug industry.

"There's no other industry in which you have so much public investment in the fundamental knowledge that enables the development of the commercial industry itself," said Dr. Bernadine Healy, who used to run the NIH. And how important is this publicly funded research to the industry? The NIH looked at the five top-selling drugs of 1995 in a report. It found that "NIH-funded research played a critical role" in discovering each one of those drugs.

But however much it may actually cost to develop a drug, which drugs are consumers getting for their money? A closer look reveals that much of the profits from prescription sales are not derived from breakthrough drugs, but rather from drugs that are similar to already popular medications.

When a drug company submits a drug to the Food and Drug Administration for approval, the agency tries to determine how important the drug may be. And the FDA divides all drugs into two categories: "priority" drugs --- which are believed to be a "significant improvement" over what already exists, and "standard" drugs --- which are similar to what exists.

But, adding up all the drugs approved over the past six years, 80% of all those drugs were deemed by the FDA to be similar to what already exists. In other words, not a significant improvement.

"I think the level of innovation that we're seeing from the pharmaceutical industry is really mixed," said Nancy Chockley, who runs an institute funded by managed-care organizations. In a new report, NICHM found the percentage of new, innovative drugs coming from the pharmaceutical industry is actually decreasing.

"What we found is that over the last 12 years that there's really been a shift in the type of new drugs being approved by the FDA," said Chockley. "And we found that most of the growth was really in drugs that did not show any significant clinical improvement."

The patent system gives companies an exclusive monopoly for the length of the patent --- meaning they can make huge profits. That is the incentive drug companies have to continually invent new drugs. Then, when the patents on those drugs expire, other companies can copy the drug, make a generic version, and the new competition in the marketplace lowers the price. The FDA says the generic drugs are just as good as the original drugs.

That's the way the patent system is supposed to work, but that is not the way it always works. The drug industry's lawyers and lobbyists have created or found so many loopholes in the laws that some generic drugs are often delayed or never get to market.

BuSpar is an anti-anxiety drug manufactured by Bristol-Myers Squibb. After the company had had a monopoly on the drug for years, the patent on BuSpar was set to expire on Novmber 21, 2000, which meant a cheaper generic version was supposed to be approved by the FDA and available to consumers the next day.

And then, just hours before its patent on BuSpar expired, Bristol-Myers Squibb got a new patent on what the drug becomes after you swallow it. And the law is written in such a way that Bristol-Myers was able to then keep the generic drug off the market, claiming that it would violate its new patent. There was no innovation involved --- only an innovative legal strategy.

Dr. Carol Ben-Maimon, who has worked in the drug industry for 15 years and is chairwoman of the Generic Pharmaceutical Association, believes that Bristol-Myers was in this for profit and not public health. "I don't think there's any question," she said. "They didn't do anything to the product to improve it."

Bristol-Myers was sued by the generic companies, which claimed that the last-minute patent filed with the FDA should not keep the generic drug off the market. It took four months for a court to rule in the generic companies' favor.

"During those four months, Bristol-Myers continued to have the exclusive right to sell this product on the market, no generic competition, and I believe this product is about, over a $700 million-a-year revenue product for Bristol-Myers," said Rob Funston, an attorney for a company that produced the generic version, Watson Labs. "So during those four months, they made approximately $200 million." When asked several times to discuss its strategy to extend the patents on BuSpar and on other drugs, Bristol-Myers refused.

Many experts believe the industry, in general, is producing fewer innovative drugs. "If I'm a manufacturer and I can change one molecule and get another 20 years of patent rights, and convince physicians to prescribe and consumers to demand the next form of Prilosec, or weekly Prozac, instead of daily Prozac, just as my patent expires, then why would I be spending money on a lot less-certain endeavor, which is looking for brand-new drugs," said Dr. Sharon Levine, the associate executive director and a pediatrician for the Kaiser Permanente Medical Group. She is responsible for assessing the best resources for the medical group, including helping decide which drugs are used.

But with so many drugs for each of these conditions, how are consumers supposed to know which drugs are the best? Surprisingly enough, the FDA says a new drug does not have to be any better than what already exists. "All you have to be able to prove is that the drug is better than nothing," said Levine.

The rules by which this hugely profitable industry operates do not always serve customers adequately. The Federal Trade Commission is investigating whether drug makers illegally delay generic competition. Some members of Congress are trying to close the loopholes in the law to make it easier for generic drugs to become available.

However, the drug industry has enormous influence in Washington. The pharmaceutical industry has more registered lobbyists than the number of senators and congressmen combined.
 

STUDY CHALLENGES PHARMACEUTICAL COMPANIES
CLAIM NEED OF HIGH PROFITS TO FUND
RISKY AND HIGHLY INNOVATIVE RESEARCH

MARC KAUFMAN; WASHINGTON POST: Most drugs approved for use during the 1990s were not innovative new chemicals that treat diseases in novel ways but rather were modified versions of drugs already on the market, according to a new analysis.

The study, by the nonprofit National Institute for Health Care Management (NICHM), challenges a central argument of the nation's pharmaceutical drug industry: that it needs high profits to fund its risky and highly innovative research.

The emphasis on incremental change was especially pronounced in the last six years of the period studied, when the number of popular but less-innovative drugs increased dramatically -- as did the nation's spending on prescription drugs. The report says that while these new drugs may be beneficial to patients, they are not the kind of breakthroughs that consumers have come to expect.

The report concludes instead that drug industry advances are now far more likely to involve relatively minor improvements in how existing drugs are administered, dosed and combined with other existing active ingredients than the discovery of entirely new types of treatments. "The pharmaceutical companies have migrated towards becoming more marketing than research and development organizations," said NICHM President Nancy Chockley. "Highly innovative drugs are rare."

The trade organization representing the drug industry, the Pharmaceutical Research and Manufacturers of America (PhRMA), criticized the study as "fundamentally flawed" and biased because it was done by a group sponsored by the health insurance industry. PhRMA Vice President Richard I. Smith said that he had not been provided the full report but that he had learned its key points.

"Today's NICHM report appears to be little more than a political and financially motivated cheap shot masquerading as science in the public interest," he said. "It comes as no surprise that its report conveniently ignores many of the basic facts about drug research, not the least of which is that innovation rests in the lives of its beholders."

In particular, he said, the study relied on Food and Drug Administration review categories that are irrelevant to assessing the usefulness of drugs and to how much patients might benefit from them. While some might dismiss the many anti-depression drugs on the market as "copycats," Smith said, studies have shown that half of depression patients try two or three varieties before finding one that works for them.

He also criticized the report for focusing only on the past and not saying anything about the many drugs in the pipeline, especially the products of biotechnology and gene therapy that some believe will transform drug treatments in the future.

The NICHM was founded nine years ago by 11 Blue Cross/Blue Shield companies, and the presidents of those companies constitute most of its board of directors. The group seeks to provide impartial information and has an independent advisory board of prominent health care experts.

The NICHM study looked at whether drugs were accepted by the FDA for "priority" or "standard" review, and whether they included new molecular entities or were improvements on existing ingredients on the market. The group judged the "priority" drugs that contained new active ingredients as the most innovative and the "standard," "incrementally modified" drug applications as the least innovative.

The study found that of 1,035 drugs approved by the FDA from 1989 to 2000, 46% were in the least innovative category. During that period, only 15%, or 153 approved drugs, were medicines that both used new active ingredients and provided significant clinical improvements, the potential level of benefit needed to achieve a priority FDA review. During the first six years studied (1989 to 1994), the FDA approved 168 drugs that neither provided significant clinical improvements nor had new active ingredients. In the second six years (from 1995 to 2000), the number in that category increased to 304.

The study also concluded that the doubling of prescription drug spending from 1995 to 2000 --- from $64.7 billion to $132 billion -- was largely attributable to new drugs in the least innovative category. Yesterday's report, and the response to it, are another example of the bare-knuckles brawl that has broken out between the drug industry and the health insurance companies that pay much of the nation's fast-rising prescription drug bill.

Those costs have led to health insurance premium increases and caused the health insurance industry to step up legislative and legal efforts to reduce drug costs, especially through the expanded use of generic drugs. PhRMA and the drug industry have been fighting back fiercely.
 

USDA’S "FULL AND THOROUGH" PROBE
CLEARS TOM DORR OF "WRONG DOING"
VENEMAN PUSHES HARKIN TO CONFIRM
USDA UNDERSECRETARY NOMINATION

JANE NORMAN, DES MOINES REGISTER: A "full and thorough" investigation by the U.S. Department of Agriculture's inspector general has found no wrongdoing on the part of an Iowan nominated for a top agency post, Agriculture Secretary Ann Veneman told the Senate Agriculture Committee Tuesday.

In a letter to committee Chairman Tom Harkin, Dem.-Iowa., Veneman also mounted her most aggressive defense to date of Thomas C. Dorr, the Marcus resident tapped by President Bush to be undersecretary for rural development. The letter was given to The Des Moines Register by USDA officials.

Veneman said "each day that passes without a vote raises fairness questions as to why the committee will not move forward on this nomination." Dorr underwent a grueling confirmation hearing before the committee earlier this year, during which numerous questions were raised about a repayment of $17,000 made by Dorr following a 1995 review of his farm operations by the federal government.

The Farm Service Agency in Iowa reviewed the Dorr family trust in 1995 and found the farm wasn't properly structured within the family trust, but there was no scheme by the family to defraud the government, Sen. Charles Grassley, Rep.-Iowa., said at the time. Dorr also said on an audiotape obtained by The Des Moines Register that that he operated two family trusts to "quite frankly avoid minimum payment limitations."

At the hearing Dorr denied any improprieties, but Sen. Mark Dayton, Dem.-Minnesota demanded a fuller investigation. Dayton urged the committee to hold off on a vote until all the financial entities involved in the Dorr operation could be probed in connection with their federal farm payments, including 1988 through 1995.

Bush nominated Dorr more than a year ago, and he deserves a chance to serve, said Veneman. "He is a good man and a fair person --- the type you would expect from Iowa," she said. She said earlier this year that Harkin said he would move forward with the nomination once the farm bill was completed. The legislation was signed into law May 13.

"However, in our telephone conversation last week, you expressed concern about whether Tom Dorr should be confirmed in this position. I strongly disagree and ask that you schedule a committee vote on his nomination as soon as possible," Veneman said.

Aides to Harkin pointed out that the investigation by the inspector general did not cover the years 1988 through 1992, specifically cited by Dayton as needing review. Veneman said Dayton's request repeated much of what took place during the hearing, interviews, and one-on-one meetings that members had with Dorr.

Aides to Veneman gave the Register a copy of an informational memorandum for Veneman prepared by Joyce Fleischman, acting inspector general for the USDA. The inspector general is an independent office. Fleischman said an inquiry was opened following a confidential complaint made to a USDA "hot line" that Dorr may have admitted on an audiotape that he received subsidy money for which he was not eligible.

The inquiry was to determine whether a criminal investigation should be opened, Fleischman said. She said the inspector general looked at Farm Service Agency files at the Iowa state FSA office related to Dorr and all entities related to him for the years 1993 through 2001, and an analysis of year-end records covering 1993, 1994 and 1995. The Farm Service Agency also conducted a review in December 2001.

Based on that information, the U.S. attorney's office for the Northern District of Iowa in Sioux City declined to prosecute Dorr, Fleischman said. She said no investigation was conducted for the years 1988 through 1992 included in the request by Dayton because the original complaint did not cite those years, "nor was any information developed during the course of the preliminary inquiry to cause us to expand our review."

Veneman said in her letter to Harkin that the coming months will be a critical time for the USDA as it begins implementation of the farm bill, and Dorr's leadership is needed. Bill Burton, a Harkin spokesman, said Dorr is already on the payroll as a USDA consultant, so his expertise is available. Burton said Harkin will schedule another hearing on Dorr "fairly soon."
 

JOINT LETTER FROM ELEVEN CONSUMER,
ENVIRONMENTAL, FARM & ANIMAL WELFARE GROUPS
DECRY HARKIN'S LEADERSHIP ROLE IN FARM BILL

May 28, 2002

Senator Tom Harkin
United States Senate
SH-731
Washington, DC 20510

Re: Farm Security and Rural Investment Act of 2002

Dear Senator Harkin,

The consumer, environmental, farm and animal welfare groups listed below have endorsed this letter to express our collective disappointment in your leadership on the recently enacted Farm Bill.  You have had a reputation as progressive in some respects and certainly deserve some credit for actions on behalf of food safety and the environment.  Nevertheless, you used your power as Chairman of the Senate Agriculture Committee and Senate Manager in the House-Senate Conference Committee to insert or allow a number of anti-consumer, anti-environment and anti-animal welfare provisions. Specifically, through the Farm Bill you:

* Gave the food irradiation industry, over strong consumer opposition, what it had not been able to get under long-standing food labeling law by easing the way for the industry to now label irradiated products as "pasteurized." You know all of the evidence indicates that such a label misleads consumers, who otherwise will not buy the food if they know it is irradiated.  Since FDA and USDA simply would not allow this to happen by regulation because of the deceptiveness, you forced it on them through statutory changes.

* Removed existing restrictions against the use of irradiated foods in Federal nutrition programs such as the National School Lunch Act. This is especially pernicious because neither students nor their parents will know whether school lunches are irradiated.  Further, our children are especially susceptible to the potential for genetic damage and other risks associated with eating irradiated foods.  Both the European Community and the Codex Alimentarius recently delayed proposed expansions of food irradiation pending analysis of new scientific studies that further highlighted these risks. You apparently just ignored them.

* Provided lavish subsidies for large factory farm polluters and failed to tailor the pollution control provisions in the Farm Bill so as to primarily aid needy family farms.  Indeed, you took what originally were good conservation/family farm provisions and allowed the factory farm lobby to hijack them, over the strong objections of environmental and family farm groups.

* Despite assurances that you would do otherwise, you allowed the exclusion of birds, rats and mice, amounting to 95% of the animals used in research, from the basic standards of humane care in the Animal Welfare Act. This condemned millions of helpless animals to needless suffering. This shocking reversal of a long-standing law --- the cornerstone of animal protection in this country --- was done without a hearing or debate. It relegated our country to the bottom of the international scientific community, which sees this as an absurd disregard for both animal welfare and good science. Further, you allowed late changes in the bill that substantially weakened two animal protection amendments pertaining to cockfighting and downed animals.

* Denied full research funding for organic farming and instead vastly increased funding to promote genetically engineered (GE) crops and a new trade program aimed at fighting attempts by consumers in other countries to make sure that GE foods imported from the U.S. are labeled as such.  The bill heavily tilts toward GE foods contrary to what consumers want.

You went out of your way to favor high-tech and big business. You have been named a Legislator of the Year by the powerful Biotechnology Industry Organization. We are sure that if the irradiation industry has such an award you will win that too. What happened to your pro-consumer, pro-environment, pro-family farm and humane roots?  We hope you get back to them because what you have done will hurt not just us, but also average American consumers, unsuspecting students, small farmers and unprotected animals.  On behalf of our hundreds of thousands of total members we respectfully request a meeting to discuss these issues with you personally . . . .

Sincerely,

CENTER FOR FOOD SAFETY
PUBLIC CITIZEN
GREENPEACE USA
ORGANIC CONSUMERS ASSOCIATION
INSTITUTE FOR AGRICULTURE AND TRADE POLICY
ORGANIC AG ADVISORS
FLORIDA CERT. ORGANIC GROWERS AND CONSUMERS, INC.
CORPORATE AGRIBUSINESS RESEARCH PROJECT
ANIMAL LEGAL DEFENSE FUND
PEOPLE FOR THE ETHICAL TREATMENT OF ANIMALS
SOCIETY FOR ANIMAL PROTECTIVE LEGISLATION
 

DARYLL E. RAY:
FARM-BILL STORIES AND EDITORIALS
PORTRAYED "FARM PROBLEM" AS ONE OF GREED
RATHER THAN THE RESULT
OF LOW PRICES, NOT THEIR CAUSE

DARYLL E. RAY, DIRECTOR OF THE UNIVERSITY OF TENNESSEE'S AGRICULTURAL POLICY ANALYSIS CENTER: As a group, editorial writers have severely criticized the recently enacted 2002 Farm Bill for being too expensive and directing the bulk of the money toward the largest producers. These characterizations are especially true of the editorials in major metropolitan papers.

The editorials panning the $170 billion-or is it $180 billion, no, it's now $190 billion-piece of legislation seem to be written as if the editorialists had visualized grifters, such as Johnny Hooker (Robert Redford) and Henry Gondorff (Paul Newman), using the 2002 farm legislation to the put "The Sting" to the American public (with the music from Scott Joplin's "The Entertainer" playing endlessly in the heads of all).

As a result, many people may be left with the impression that the crisis in crop agriculture was overplayed and begin to believe that they, like Doyle Lonnegan, have been "stung" by an elaborate con game.

The contemptible tone of the majority of the farm-bill stories and editorials might make one think that agriculture does not have a price and income problem, only a greed problem. This is unfortunate because it is very evident that agriculture is under a tremendous financial strain and would be to the breaking point without government help.

But, because we are using government payments as the compensating mechanism, it is easy to become blinded by the size of the budgetary outlays and forget the source of the problem, or even that there is a problem.

So, for the record, what is the problem? The problem is that markets for major crops do not self-correct in a timely manner when external shocks cause prices to decline. It does not matter what the shock or alleged shock is. It can be good weather in the U.S. or around the world, yield gains in Argentina, foot and mouth disease in Taiwan or a change in exchange rate relative to our major export competitors. The area of crop production does not decline adequately in the face of a significant drop in prices. Likewise, lower prices do not trigger a significant increase in crop utilization by domestic users and export customers.

I believe the reason the 2002 Farm Bill gets so much editorial criticism is because of the method chosen to compensate for crop agriculture's lack of self-correction. Instead of providing alternative market-balancing approaches to address crop agriculture's inability to respond sufficiently to market prices, mechanisms have been chosen to directly supplement farm incomes, making the whole thing look like a giant welfare program. The present legislation is focused on the results of low prices, not their cause.

Prior to the 1996 legislation, farm bills included production adjustment mechanisms and programs to manage surplus stocks. The earlier farm legislation had the effect of designating the Secretary of Agriculture as the CEO of agriculture. The Secretary could activate programs to broadly adjust the productive resources devoted to crops much the way a corporate CEO continues to do in other industries.

Because the current legislation lacks mechanisms to deal with the over-production root-cause of agriculture's price/income problems, it gives the general public the impression that farm legislation is a con game designed to get as much money from the federal government as possible. Never mind that the crop agriculture sector is not "prosperous" even with the payments. Never mind that the real beneficiaries of below-full-cost-of-production crop agriculture are agribusiness suppliers, merchandisers, transporters, and processors as well as domestic and export demanders of raw crop output, NOT those who produce it.

It is unfortunate that the tone of much of the editorial commentary on the 2002 Farm Bill focuses only on the politics of creating complex legislation while virtually ignoring the real problems that are facing crop agriculture and, barring a weather related disaster, will continue to plague the sector for the duration of this legislation.

Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of the UT's Agricultural Policy Analysis Center.  dray@utk.edu; http://www.agpolicy.org
 

CARGILL AGREES TO SELL 16,500 ACRE
SALT PONDS TO SAN FRANCISCO BAY
WETLANDS RESTORATION PROJECT

JANE KAY, SAN FRANCISCO CHRONICLE: In what could become the nation's biggest wetlands restoration outside the Florida Everglades, an agricultural company has agreed to sell 16,500 acres of salt ponds around San Francisco Bay, an area half the size of San Francisco.

Returning the ponds to tidal wetlands would vastly increase the amount of public shoreline in the South Bay and provide enlarged quarters for millions of waterfowl and shorebirds that live here or visit on migratory routes, officials said Tuesday. Environmentalists have called the acquisition the crown jewel in a 10-year campaign to restore tidal marsh in a bay that has lost 80% to development.

The state and federal governments and private foundations signed a preliminary agreement Tuesday. The deal, brokered by Sen. Dianne Feinstein, offers $100 million to Cargill Inc., an international agricultural and food company. A purchase agreement is to be signed September 16, and $53 million will be paid at a November16 closing, with the remainder due over five years.

The ponds --- shimmering chartreuse to orange-red checkerboards on display for millions of travelers whose planes land here --- lie along the shorelines of Alameda, Santa Clara and San Mateo counties. Cargill also is selling 1,400 acres of ponds in Napa County on the Napa River.

"We're taking the first step toward restoring the San Francisco Bay for the people of California," Gov. Gray Davis said Tuesday. "This is more than just a purchase. Today we're making a commitment --- to enhance our communities, our state and our most precious natural resources," Davis said.

Two years ago, the governor signed a bill by then Assemblywoman Carole Migden committing $25 million to get the project rolling. The federal government has authorized $8 million. Another $35 million will come from the William and Flora Hewlett Foundation, the David and Lucile Packard Foundation, the Gordon and Betty Moore Foundation and the Richard and Rhoda Goldman Fund.

The remainder of the money --- $32 million --- will come from state water and park bonds passed by voters through state Coastal Conservancy, the San Francisco Bay Conservancy and the state Wildlife Conservation Fund. "The Everglades in Florida is the largest wetland restoration in the country, and this is the largest shoreline restoration that increases tidal wetlands," said California Resources Secretary Mary Nichols.

"For the people who live around San Francisco Bay, this is an opportunity to improve open space forever and ever and create opportunities for recreation and education adjacent to one of the most concentrated urban areas in the country," Nichols said.

The bay has lost 80% of its original 190,000 acres of tidal marshes to diking and filling over the past 150 years.

For 40 years, local environmentalists have envisioned returning the commercial ponds in the southern bay to working wetlands, once again serving as habitat for wildlife, filters for pollutants, flood control and open space for hiking and watching birds. Over the years, they lobbied in Congress to increase the size of the Don Edwards San Francisco Bay National Wildlife Refuge. Now, the Cargill ponds can be folded in with no further congressional approval. The state will manage 7,000 acres of the ponds as a wildlife reserve.

Many environmentalists were happy about the deal. "Sen. Feinstein and the agencies have hit a home run for the bay. And California voters have been willing to vote billions of dollars for environmental projects. It proves that we don't need to destroy other parts of the bay in order to reclaim tidal wetlands. That's what the airport has been trying to convince people," said David Lewis, executive director of Save San Francisco Bay.

Florence LaRiviere, a founder of the Citizens Committee to Complete the Refuge, said her group is cautious. The environmentalists had a bad experience with Cargill in 1994 when the company sold land to the state but left behind bittern, a highly saline waste, and no money to clean it up, she said. "Our vision is that things will be done right this time," said LaRiviere.

Early Native Americans who lived around the bay extracted salt from diked ponds. Leslie Salt Co. came to the bay in the 1930s, expanding over time and selling to Cargill in 1978. Cargill will retain 11,000 acres around the bay --- 3,000 acres that it owns outright and 8,000 acres where it owns salt-extraction rights on refuge land.

"Our goal was to have a strong, sustainable salt business for the foreseeable future --- 40 or 50 years, who knows," said Lori Johnson, spokeswoman for Cargill. "The acquisition is based on land we no longer need for salt production that could be restored to tidal marsh or other uses." Cargill plans to keep producing 650 tons of salt a year and continue to employ 200 employees and 70 part-time workers at its Newark plant. Cargill isn't selling 1,400 acres around its Redwood City plant or the nearby 800-acre pond.

Under the agreement, Cargill will lower the salinity of the ponds to standards set forth in a permit that will be issued by the San Francisco Bay Regional Water Quality Control Board. The company can't sell the land until it meets the permit requirements. Currently, there's no appropriation in the 2002 federal budget for extra money to maintain and operate dikes and pumping of the pond. Congress would have to approve funds for the refuge above the president's budget.

Interior Secretary Gale Norton has already expressed support for the agreement. Her spokesman, Eric Ruff, director of communications, said Tuesday that "the secretary believes that this kind of agreement, which brings together federal and state governments, working in cooperation with local cities and organizations, represents the strength of conservation."

Once the refuge takes over the land, years of restoration lie ahead. Scientists have estimated a range of $200 million up to $1 billion, depending on how much is restored to tidal marsh. Scientists envision a diverse mix of tidal marshes and fresh water seasonal wetlands to upland habitat.

Feinstein, who put the deal together just as she did the purchase of the Headwaters Preserve, said: "I've tried to take individual projects, including the California Desert Protection Act and the Lake Tahoe agreement, and follow through to the end. In that way, it becomes something living, real and exciting as opposed to legislation."
 

THE SALT OF THE BAY

The enormous wealth of grain-trading firms, and the fact that most are private corporations and unaccountable to outsiders, has given the grain trade untold and often unseen power to influence U.S. government trade and tax policies and gain lucrative federal, state and local financial assistance in hidden subsidies.

Cargill, for example, from Seattle to Buffalo has in the past leased or built a number of giant grain terminals financed for the most part by industrial revenue bonds and special state and federal funds. At the same time, as outsiders they have shown little regard for the communities' best economic interests when these interests conflict with their own corporate goals.

One illustration:

In February, 1978, in Buffalo, Cargill simply abandoned three grain elevators after refusing to pay property taxes on them for five years, leaving the city with an uncollected bill of $860,000. The city subsequently acquired the property at its own tax sale, but was unable to realize as much money from the selling of the property as the amount Cargill owed in taxes.

Buffalo later sought to collect the deliquent tax money from Cargill by taking its case to the New York State Supreme Court. The Court, however, ruled that state law compelled the city to bid on the property at the tax sale and that same law deemed the deliquent taxes to have been paid when Buffalo picked up the property at the tax sale.

Later, that same year, Cargill announced the purchase of Leslie Salt Company in California, with included over 44,000 acres of salt evaporation ponds in six of the nine counties on the San Francisco Bay.

In light of the then current furor over property taxes in California and the passage of the equally controversial Proposition 13, the Agribusiness Accountability Project wrote to each of the six county tax assessors questioning them as to how much land in their county Cargill would be paying taxes on, what the rate would be and whether the county had any administrative or statutory procedure to prevent Cargill from doing to that county what it did to Buffalo.

The subsequent replies received all pretty much followed the same pattern as to the county's recourse in such a circumstance. One assessor, however, concluded his letter by candidly stating: "After this long explanation, what I am really telling you is that we would possibly find ourselves in a similar situation as Buffalo, New York." Thus, in a state where property taxes had become the number one political issue, local governments remained uncertain as to how they might have to go about collecting deliquent taxes in their own counties from the nations largest private corporation.

--- Excerpt from "Ebenezer Scrooge Was A Grain Trader," The Corporate Reapers: The Book of Agribusiness by A.V. Krebs (Essential Books: 1992)
 

UPDATED AND STREAMLINED
CORPORATE AGRIBUSINESS RESEARCH PROJECT
WEB SITE INITIATES RENEWED SUPPORT EFFORT

It is rather curious that as more and more people from literally around the world request
to regularly receive THE AGRIBUSINESS EXAMINER, lavish in their much
appreciated praise for the work it seeks to do, fewer and fewer people seem willing to
financially contribute to its support.

Those handful of regular contributors who have earned the editor's undying gratitude
over the past four years and the few other occasional welcome individual supporters
stand in marked contrast to those many who obviously have believed during that time
that their aid could be better applied elsewhere, particularly when it comes farm and rural
organizations. Such neglect, however, when it comes to rural concerns is recognized
from this desk as not uncommon in our modern affluent and well fed society.

Since the AGRIBUSINESS EXAMINER first appeared some 164 issues ago it has been
the publisher's intent to make the work of the Corporate Agribusiness Research Project
(CARP) and the monitoring of corporate agribusiness from a public interest perspective
available to the widest possible audience, seeing that those few and available publications
that still concern themselves with corporate agribusiness are so prohibitively expensive,
to say nothing of their pro-corporate bias.

But, because there is a more a need today than ever before to make corporate
agribusiness more accountable to the common good, it is the wish and hope of THE
AGRIBUSINESS EXAMINER to continue to play a major role in that effort. Your
contributions will go far in helping to perpetuate that hope. Such contributions may be
sent to the editor at the above address.

As part of a major effort to keep those committed to bringing economic and political
democracy to rural America informed, educated and updated the Corporate Agribusiness
Research Project is happy to point out that its web site has been updated and
streamlined.
http://www.ea1.com/CARP/

Among the sites many features are:

> A complete index of THE AGRIBUSINESS EXAMINER'S  first 162 issues with a
"Search" engine to provide easy access to the subject matter of each edition.

> Å new edition of THE AGBIZ TILLER, the progeny of the one-time printed
newsletter, featuring the essay "The Merchants of Greed," an in-depth essay dealing with
today's corporate agribusiness. Likewise the "Search" engine is also available for past
editions of THE AGBIZ TILLER.

> In "Between the Furrows," besides a modern "Search" engine, there is a wide range of
pages designed to inform and educate readers on the inner workings of corporate
agribusiness. They include:

* CARP's "Mission Statement," "Overview" and THE AGRIBUSINESS EXAMINER'S
Editor\Publisher's "Resume."

*  "Fact Miners," an effort to assist the reader in the necessary art of researching
corporations

*  "Quotable Quotes" pertaining to agribusiness and corporate power

*  "Links," a page which allows the reader to survey various useful public interest,
government and corporate web sites;

* "Feedback" an opportunity for reader input:

* The Corporate Reapers: The Book of Agribusiness, a page where readers can order
directly the editor's 1992 published book from Essential Books.

The CARP web site was designed and produced by ElectricArrow of Seattle,
Washington.
http://www.electricarrow.com

Simply by clicking on the address below all the aforementioned features and information
are yours  to enjoy, study, absorb and sow.

http://www.ea1.com/CARP/