December 18, 2002   #210
Monitoring Corporate Agribusiness
From a Public Interest Perspective

ADDRESS: PO. Box 2201, Everett, Washington 98203-0201
TO RECEIVE: Name and e-mail address


The Rural Coalition, an alliance of more than 80 community-based organizations representing minority farmers and farmworkers, has called upon President George Bush and Agriculture Secretary Ann Veneman to remove Arlean Leland, the Department's Associate General Counsel for Civil Rights, for her actions with respect to a noose incident involving a top official of the Department's Farm Credit program.

It finds Ms. Leland's assessment of a noose incident, reported Sunday in the Richmond Times Dispatch, highly objectionable and one more indication that USDA is not serious about ending racism at the Department. Ms. Leland has publicly admitted that a 29-year employee who is the senior Farm Services Agency official responsible for farm loan servicing, had a noose in his office and displayed it at an event to welcome an African American secretary to his staff.

Instead of condemning the action or taking action against the official, Ms. Leland instead attributed his actions to "very poor judgment," and praised him as a "committed federal servant."  Unnamed USDA officials also verified in the same article that the incident occurred and was investigated by the department's inspector general, who found no evidence that the employee, Arthur V. Hall, "engaged in an illegal or discriminatory act."

In view of the focus on race relations in this nation spurred by the recent comments and continuing apologies of Senator Trent Lott, the Rural Coalition points out that the Administration itself is defending people who are not only making statements but committing and condoning acts that are racist and discriminatory.

"We recognize that the noose incident happened a number of years ago. We also know that employees throughout the department are aware not only of the incident, but more importantly, of the fact that USDA never took action: `no letters, no reprimands, it came out clean,' as Hall said in a deposition this fall."

The lack of action, the coalition points out, is more astounding in view of the fact that Mr. Hall has long managed the very program with a tragic record of discrimination against minority producers. The acts of discrimination caused by the subordinates of a man who saw nothing wrong with having a noose in his office have resulted in a $700 million liability to the taxpayer directly as a result of USDA actions.

At a hearing in September, House Agriculture Committee members questioned why, in the wake of the lawsuits involving more than 60,000 claims, only four people in the Farm Services Agency were removed for discrimination.

"We agree with the assertion of Representative Eva Clayton on USDA's failure to act. `It is fraudulent!' she said. `There is a lack of political will to correct that issue . . . .If any corporation paid out [even] $10 million for the behavior of their employee . . . they would be out of there,' she said later. `No one would have tolerated that.'  We question why Mr. Hall was not one of the employees who was removed, for more reasons than the noose incident itself."

"How can we tolerate," they added. "an Inspector General who finds the display of a noose `neither illegal or discriminatory!'  How long will USDA employees and minority farmers be subject to such hostility?"

The Coalition noted that just last week, while hearing arguments regarding Virginia's cross burning laws, Justice Clarence Thomas made the point that lynching was a "reign of terror" across the south, and that the displaying of associated symbols have no purpose but to "cause fear and terrorize."

"How can the President and the Secretary of Agriculture defend their Civil Rights Attorney who has excused the display of a noose, and in effect, made clear to employees yet again that there are no consequences for their racist actions?  These officials have failed to do their jobs and should not continue to be employed at the expense of US taxpayers."

The Rural Coalition has worked for more than two decades to help the Department reach and fairly serve all its members. They believe, however, that their goal will never be reached so long as the Department continues to tolerate and publicly dismiss the seriousness of racist actions.

"As USDA officials dismiss the need for accountability, we are in regular communication with farmers who continue to experience discrimination. In recent weeks we have heard from minority farmers who are not receiving the injunctive relief promised in the Pigford V. Glickman lawsuit; not receiving priority consideration for loans, despite promises from the Department, and having their applications for disaster payments devastatingly delayed, drawn out or rejected, while those of their neighbors are approved.," they said.

In response to these ongoing actions the Caolition has called upon the President and the Secretary of Agriculture to:
* Stop racism and start treating all producers and employees fairly.
* Remove officials who have violated the public trust and condoned racist actions.
* Assure the farmers and the citizens of the United States that none of the aforementioned employees or offices have received the merit bonuses the government is paying this year.
* Establish the office of the Assistant Secretary of Civil Rights immediately, and quickly appoint an official who is serious about correcting ongoing abuses
* Get serious about implementing an effective and coordinated outreach program for minority farmers, in consultation with the groups who represent these farmers.
* Release swiftly the FY 2002 funding for Minority Farm Outreach programs, and respond to the letter we and many other minority farm organizations and institutions sent to you last month on the urgency of this matter.
* Establish the long-awaited minority farm registry, and implement the transparency and accountability mechanisms adopted in the recent farm bill and
* Publish information to tell minority farmers how they can access the new direct loan money that you have announced is available to them.

An open letter to President George Bush and Secretary Ann Veneman from the Rural Coalition and their allies is scheduled to be delivered this week detailing the aforementioned requests.

To view the full article published December 15th  in the Richmond Times Dispatch visit:

The Rural Coalition/ Coalición Rural is an alliance of more than 80 culturally and regionally diverse community-based organizations who support equity for farmers and farmworkers, and just and sustainable development in low-income and people of color rural communities. Thier members represent small-scale farmers of all races and in every region of the nation. These include vibrant and creative groups of African American, American Indian, Asian-American, Euro-American, and Latinos farmers and farmworkers determined to maintain and rebuild their historic connection to the land.


ERIC PALMER, KANSAS CITY STAR: Kansas City-based Farmland National Beef used its market power to punish a small Kansas cattle feeder that publicly criticized the giant meat packing operation, according to a lawsuit filed in Kansas City.

The lawsuit in U.S. District Court alleges Farmland National Beef quit buying cattle from Callicrate Feedyards in St. Francis, Kansas because Mike Callicrate publicly criticized Farmland and other large meat packers for having too much market power. The lawsuit seeks actual damages of $5,345,000, as well as punitive damages and attorney's fees.

Callicrate's lawsuit is similar to a complaint filed by the U.S. Department of Agriculture against National Beef in 1999. The USDA alleged National Beef used its market muscle to retaliate against Callicrate. The USDA dropped that complaint last year after National Beef agreed to repay the government the cost of the investigation.

That administrative action did not keep Farmland from continuing to refuse to buy cattle from him at competitive prices, Callicrate said. The result, he said, is that he must now close his feed yard. "None of the meat packers will buy from me," Callicrate said. "I have already let 12 people go that worked in the feed yard."

John Miller, chief executive of Farmland National Beef, said Callicrate's lawsuit was without merit. "National Beef's conduct with respect to Mr. Callicrate has always been fair and lawful," Miller said in a prepared statement. Miller said that when Farmland National Beef settled the complaint with the USDA, the agency's order found that National Beef was not required to buy from any particular producer.

"National Beef owes an obligation to its customers and owners to buy the highest-quality cattle at the lowest possible price," Miller said.

Farmland National Beef is a partnership of Kansas City-based Farmland Industries Inc. and U.S. Premium Beef Ltd. It operates beef processing plants in Dodge City and Liberal, Kansas. Farmland Industries, the country's largest farmer-owned cooperative, has been operating under bankruptcy court protection since May 31. But the National Beef partnership is not part of the bankruptcy proceedings.

Callicrate has been an active critic of the consolidation in the meat processing industry, which has concentrated about 80% of that business in the hands of four major companies. Farmland National Beef is the country's fourth-largest beef processing company.

The lawsuit points out Callicrate was a plaintiff in a class-action lawsuit against meat packer IBP for allegedly uncompetitive practices at the time Farmland began its boycott.

Callicrate said Farmland National Beef has the closest meat processing plant to his feed yard and does most of the cattle buying in the area. The company was his main customer for 12 years before it essentially stopped buying from him in 1998 after he and an employee spoke out against the prices National Beef was offering to cattle ranchers who sold direct to the company.

The new lawsuit alleges National Beef violated the Packers & Stockyards Act of 1921 and the Kansas Consumer Protection Act. The suit says both acts forbid retaliating against a critic, boycotting a cattle feeder and engaging in any act or practice to promote a monopoly "including a local or regional monopoly."

The fact the federal government settled the USDA complaint without a finding of fault does not preclude Callicrate from filing his own action, said David Domina, the Omaha, Nebraska, attorney who filed the suit.

Callicrate believes there has been no political will for years to enforce federal laws against anti-competitive practices in the meat industry. "This is why other people won't speak out," Callicrate said. "As result we are going to lose our markets and our domestic cattle industry. So much for free speech."

EDITORS NOTE: Western Ranchers Beef Cooperative (WRB) has announced that Mike Callicrate of St. Francis, Kansas will be honored as "Westerner of the Year" at the annual WRB Profit Conference. The seventh annual Beef Producers Profit Conference will be held again at John Ascuaga’s Nugget on Saturday, January 4, 2003. In addition to the award, the conference will provide beef producers with the tools to add value to their herds.

This year's "Westerner of the Year" will be Kansas feedlot operator Mike Callicrate. For years now, Callicrate has spoken out against consolidation in the beef industry. He has also developed a unique beef processing system and a Ranch Direct marketing program that provides a high-quality product to consumers and a fair profit to producers. In 1996, Callicrate testified before Secretary of Agriculture Dan Glickman's panel on Concentration. He is also a lead plaintiff in a national class action antitrust lawsuit against Tyson/IBP.

In addition to Callicrate, speakers at the conference will include Chad Ellingson of Genex, Inc.; Roger Ingram of the University of California Extension Service; CEO Bill Bullard of R-CALF USA; and Donald Nelson of Washington State University (WSU).


REUTERS: Archer Daniels Midland Company said [yesterday] that it would close some of its soybean processing plants amid poor profit margins, as it continues to shift its crushing operations to China.

It will cut soybean crush rates through closures and production cutbacks at six soybean processing plants in the United States because of reduced  profits made from crushing soybeans into meal and vegetable oil. Soybean processing has been pressured this year by the rising cost of soybeans and  some processors have shifted operations overseas to maximize profits.

The facilities involved in yesterday's announcement are plants in Fostoria,  Ohio; Fredonia, Kansas; Little Rock, Arkansas; Kershaw, South Carolina; Quincy, Illinois; and Valdosta, Georgia.

Refined oil production will also be cut because of increased crude soy oil  export demand, the company said. Archer Daniels, the largest soybean processor in the country, said it would reduce operations at some of the plants and close others, but did not say which plants would be closed.


A new National Academies Report on USDA's Research was released this week  The report --- Frontiers in Agricultural Research: Food, Health, Environment, and Communities --- from the National Academies' Board on Agriculture and Natural Resources reviews the U.S. Department of Agriculture's Research, Education, and Economics mission area, the main engine of publicly funded agricultural research in the United States, and provides recommendations on future opportunities and directions.

The report recommends that the U.S. Department of Agriculture refocus its $2 billion annual research budget to reflect changing public values and needs. USDA should shift its emphasis from increasing food and fiber production to frontier issues such as the impact of globalization on U.S. agriculture, diet and health, food safety, environmentally sound farming alternatives and the quality of life in rural communities. There is a need for
high-level leadership to support new directions in food and agricultural research.

A prepublication version of the report is available for online reading, with the final version forthcoming and available for purchase from National Academies Press at:

A four-page brief summary of the report can also be viewed at:


DOW JONES NEWSWIRES:  Chiquita Brands International Inc. wants to sell its banana plantations on Panama's Pacific coast to its employees, but a worker's cooperative has nixed the idea, an official said Tuesday.

Manuel Aizprua, vice president of legal and governing affairs for Puerto Armuelles Fruit Company, the Panamanian arm of the Cincinnati, Ohio-based fruit giant, said his company could no longer afford the costs of maintaining the plantations in and around the city of Puerto Armuelles, 315 miles west of Panama City, the capital.

During a meeting with foreign journalists, Aizprua said he hoped his company's employee cooperative would assume most of the financial responsibility for the plantations in exchange for greater control over the facilities where they work.

Cooperative members met Saturday and Sunday and voted overwhelming to reject the idea of buying the nearly 3,000 hectares of Puerto Armuelles plantations, which employ 3,200 workers and last year produced 6.5 million 18-kilogram boxes of bananas. The company and the employees cooperative have yet to work out a possible sale price for the plantations, Aizprua said.

Employee union leader Edward William was among the would-be sale's sharpest critics, saying there's no guarantee Chiquita would agree to buy bananas produced on the plantations once the company no longer owns them.

But Aizprua said Chiquita officials were still hopeful a sale could be worked out, despite what he called this weekend's "harsh rejection" of the plan.

Chiquita has been Panama's largest banana-producer for more than 80 years. It now controls nearly 90% of the country's banana exporting market, thanks to its plantations near Puerto Armuelles and in the Bocas de Toro province on the Caribbean coast.


DOW JONES NEWSWIRES: A Georgia company has recalled about 36,000 pounds of fully cooked, frozen chicken products that may be contaminated with plastic, the Department of Agriculture announced Thursday. The product was recalled by ConAgra Foods Poultry Group of Elberton, Georgia.

The chicken was produced on August 29 and distributed to retail stores in Alabama, Florida, Georgia, Illinois, Kentucky, Maryland, Mississippi, Missouri, North Carolina, Tennessee and Texas.

"Because of the potential for injury, we want consumers to be aware of the recall," said Garry L. McKee, administrator for the department's Food Safety and Inspection Service. ConAgra Foods Poultry Group notified FSIS that it was recalling the products based on the results of an investigation conducted by the company.

The product is "Easy Entree Popcorn Style Chicken, Fully Cooked, Breaded Chicken Breast with Rib Meat, Made with White Meat, Oven Crisp Breading."


SEBASTIAN MOFFETT AND KAZUHIRO SHIMAMURA, WALL STREET JOURNAL: Wal-Mart Stores Inc., aiming for a slice of the world's second-largest retail market, said Thursday it would pay ´52.06 billion ($421.1 million) for a controlling stake in Japanese supermarket chain Seiyu Ltd.

The deal, which exercises an existing option, paves the way for Wal-Mart, the world's biggest retailer, to operate in the Japanese retail market for the first time. The agreement also marks the first time for a foreign firm to take control of a top Japanese retailer.

Under the terms of the deal, Wal-Mart will get 192.8 million Seiyu shares on December 27, which will raise its current 6.1% stake in Seiyu to 34% -- making it the supermarket's largest shareholder and giving it a veto over board decisions under Japanese corporate law.

Though Wal-Mart has long viewed Japan as a key piece in its plans for international expansion, the Bentonville, Arkansas-based retailer faces many challenges in applying its famous high-volume, low-price business model here. Japanese consumers are notoriously finicky --- they prefer to buy small quantities of high-quality goods --- and demand frequent product updates. As a result of the unique challenges, numerous foreign retailers have struggled in Japan.

United Kingdom-based Boots Co., for example, tried to sell beauty products here, but closed its stores in 2001. Analysts say French supermarket Carrefour SA is off to a slow start after opening its first Japanese store in 2000.

Wal-Mart has sought to avoid the pitfalls by tying up with Seiyu, which operates more than 400 stores in Japan, making it the country's fifth-biggest supermarket chain. Most other foreign retailers have gone it alone. In addition, when Wal-Mart bought its initial Seiyu stake in March, it teamed up with trading house Sumitomo Corp., currently Seiyu's biggest shareholder, to study the Japanese retail market. The results of that study, plus Seiyu's decision last month to offload a heavily indebted financing subsidiary, Tokyo City Finance Co., convinced Wal-Mart to raise its stake.

"Our studies have convinced us that Seiyu has the potential to grow and become more profitable," said John Menzer, president and chief executive officer of Wal-Mart International. In addition the deal will offer Japanese consumers "clear benefits . . . .such as those delivered by the Wal-Mart everyday low price strategy."

Mr. Menzer didn't give details of Wal-Mart's plans for Seiyu or say whether Wal-Mart plans to exercise an option it has to boost its stake in Seiyu to 66.7% by 2007.


SABRINA JONES, WASHINGTON POST: Columbia-based U.S. Foodservice said it signed a five-year, $4 billion contract to be the largest national distributor for London-based Compass Group, the world's biggest food service company.

The agreement allows U.S. Foodservice, which has supplied goods and services to Compass for more than 12 years, to serve the British firm in 15 more markets, including those in the western United States. The deal is U.S. Foodservice's largest single-company contract, said Robert Gillison, the company's vice president and treasurer.

"We're almost doubling the business we do with them on an annual basis," Gillison said. U.S. Foodservice, the nation's second-largest food services distributor, supplies paper goods, cleaning supplies, food and other products to Compass's customers, which include cafeterias, restaurants and catering companies, Gillison said.

U.S. Foodservice also announced this week that it expanded its services distribution contract with Atlanta-based Rare Hospitality International in a deal worth more than $175 million a year over five years. This is the second year of the contract. Rare owns, operates and franchises LongHorn Steakhouse, Capital Grille and Bugaboo Creek Steak House restaurants throughout the United States.


RUSSELL MOKHIBER AND ROBERT WEISSMAN, CORPORATE FOCUS: Are capitalism and caviar incompatible? Is the system that prides itself on the creation and veneration of wealth unable to maintain a sustainable market for one of the great trappings of wealth?

Well, at the very least, the tragic story of the global caviar industry gives pause. It stands as a parable illustrating the pitfalls of the market fundamentalist ideology that has dominated global economic policy-making for two decades.

The story of the industry is recounted in a new book by Inga Saffron, a Philadelphia Inquirer reporter and former Moscow correspondent for the paper, Caviar: The Strange History and Uncertain Future of the World's Most Coveted Delicacy (New York: Broadway Books).

For most of the twentieth century, the world caviar market was supplied primarily by the Soviet Union. Caviar --- the salted eggs of sturgeon or paddlefish --- is a creation of Russian culture. Although sturgeon once populated many of the world's great seas and rivers in large numbers, most of the world's supply after World War I came from the Caspian Sea and the Black Sea.

After coming to power, Saffron says, "the Soviets realized they could make a lot of money if they controlled the caviar market." They exported the product to Western markets to earn hard currency, but limited supply to increase prices.

"I don't want to say that they had a great environmental record, because they didn't," Saffron says. "But they did act as a brake on fishing because they limited caviar exports."

Even when the Soviets embarked on their disastrous dam-building schemes, which blocked sturgeon from swimming upstream to spawn, they developed an extensive hatchery system that maintained the sturgeon population. Communism, it turned out, was pretty good for caviar. When the Soviet Union collapsed, so did the protections and support system for caviar.

In the chaos following the fall of the Soviet Union, factories across the country stopped doing business as government money for operating expenses evaporated. Funding to maintain the hatcheries similarly disappeared, and the hatchery system fell apart. Overall, Saffron says, the hatchery system became much less efficient, and was able to put back
many fewer fish than it had before. Even worse, perhaps, was the rampant poaching that occurred after the fall of the USSR.

"Many of the people who had been thrown out of work began to fish illegally," according to Saffron. "They began to poach for sturgeon and make caviar in their kitchens, because that is the only way they could make money. It was the one resource in Southern Russia."

The old Soviet limits on fishing "were ignored, and people just fished all the time," she says. Enforcement agencies were weak and ineffectual. Many were bought off or intimidated by the criminal gangs that gained control over much of the industry.

Today, the sturgeon in the Russian and Kazakhstan portions of the Caspian are in steep decline, and Saffron has little hope that they will be saved. International controls on caviar imports are coming too little, too late, and in any case cannot stop the internal traffic in the delicacy.

The collapse of the sturgeon in the Russian and Kazakhstan portions of the Caspian is history repeating itself. Rampant overfishing led to the rapid destruction of sturgeon populations in Germany, France, the Eastern United States and the U.S. Great Lakes, all in a matter of decades in the late nineteenth and early twentieth centuries.

Today, the counterexample to the laissez-faire caviar failure is Iran. Like the Soviet Union once did, Iran maintains strong limits on fish catch in its portion of the Caspian and operates a sophisticated and effective hatchery system.

Countries relying only on price signals to regulate the industry have witnessed a short cycle of boom and bust.

Countries that have succeeded in maintaining a viable caviar industry over time have made long-term investments in infrastructure and put in place systems to ensure sustainable management of limited resources. Those are key elements for effective economic management and a livable world.

Markets alone will not deliver them.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor,
They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999)


WASHINGTON POST: E.J. Dionne Jr. is right [op-ed, December 6] when he states that the U.S. media are "heavily biased toward conservative politics and conservative politicians." But that should come as no surprise to anyone who has observed the increased concentration of ownership in the media by a handful of huge corporations.

Today conglomerates such as AOL Time Warner, Disney, Viacom, News Corp., Bertelsmann, Vivendi Universal, Sony, AT&T, The Washington Post Co. and General Electric control, to a significant degree, what the American people see, hear and read. Given that reality, why should we expect anything different from a pro-corporate, anti-worker point of view?

Where is the media coverage of the grossly unfair distribution of wealth and income in this country, or the fact that the United States is the only wealthy nation without a program guaranteeing health care for all?

Where are the programs reporting that Americans now work the longest hours in the industrialized world, while the average worker today earns less, in real dollars, than 30 years ago? Where are the editorials attacking disastrous trade policies that have given us a trade deficit and the loss of two million decent-paying manufacturing jobs in the past four years?

Any candidate for president must oppose further concentration of ownership in the media and fight to create a process by which the American people can learn about all points of view, not just those of corporate America.

U.S. House of Representative (Ind.-Vermont)

                                       EDITOR'S NOTE

Preparing to post this 210th edition of THE AGRIBUSINESS EXAMINER it is
gratifying to know that over 1100 people throughout the world are currently receiving it

on a regular basis and judging from comments received feel it is a valuable source of
information. However, it is also quite troubling to realize that less than 4.5% of that
readership has ever seen fit to make any contributions toward its continued existence.

To that small cadre of contributors this editor can only express his profound gratitude
and appreciation for I realize that in some cases even a small donation was a sacrifice for

From the outset it was never the purpose of THE AGRIBUSINESS EXAMINER to
charge a subscription fee for the original intention of this newsletter was to get it into as
many hands as possible as a vehicle for monitoring corporate agribusiness from a public
interest perspective, just as was the establishing of a web site
[] to provide facts, background, analysis and educational
information on corporate agribusiness.

Thanks to the generosity and creativity of the editor's oldest son David and his business
colleagues at ElectricArrow in Seattle, Washington that sight is being maintained on a
virtual pro bono basis.

Having said all this, may I repeat CONTRIBUTIONS FROM READERS are always and
will always be most welcomed for editors of such publications as THE AGRIBUSINESS
EXAMINER can not always live on bread and water alone. Such checks made out to
A.V. Krebs can be sent to P.O. Box 2201, Everett, Washington 98203.