January 5, 2003, Issue #213
Monitoring Corporate Agribusiness
From a Public Interest Perspective

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DAVID MIGOYA, DENVER POST: ConAgra officials rebuffed repeated efforts
this summer by California health investigators to locate E. coli-tainted
meat suspected of making people sick, recently released documents show.

But a spokesman for the Greeley slaughterhouse, now known as Swift & Co.,
said  . . .  that it was California that goofed by not returning the
company's telephone calls offering help.

The problem occurred during one of the nation's largest meat recalls ever
and in the face of public promises by ConAgra to tell health departments
nationwide where it shipped nearly 19 million pounds of beef that later was
recalled, say nearly 300 pages of health department e-mails obtained by The
Denver Post through California's open-records laws.

California Department of Health Services officials said in the internal
e-mails that ConAgra's refusal to disclose where it distributed nearly 50
tons of recalled beef in the state "may further endanger California

"This blatant disregard for a request from a public health agency is
unacceptable and may have jeopardized the health of (California) citizens,"
Jim Waddell, acting chief of the agency's food and drug branch, wrote
health services director Richard Rodriguez on September 10, eight weeks after
the state's initial request.

Consumer safety groups say the problem raises new concerns about the recall
system and how firms decide whether information is kept from the public and
health investigators.

California had four illnesses linked to the recalled meat. ConAgra provided
It's confidential customer list to Colorado and other states.

The e-mails detail nearly three months of frustrated efforts by California
to obtain ConAgra's distribution list --- how calls to the company sometimes
were not returned, letters went unanswered and voice-mails were ignored.

Waddell said  . . . that California still has not received the list. In
addition to determining whether recalled meat may have caused illnesses,
officials would have used the information to ensure grocers had pulled the
beef from store shelves.

Swift spokesman Jim Herlihy said ConAgra's consultant, Melvin Kramer, told
him he twice --- on August 23 and August 28 --- left telephone messages with
California health officials with the intention of giving them the list.

California officials said they are unaware of any messages from ConAgra.

"We've been prepared to give them the information about the expanded recall
all along," Herlihy said. "We will be doing that shortly."

California records show only that Kramer faxed a request to health
officials there on August 29 for information about E. coli-related illnesses
the state was tracking.

"I find this request and the timing of it particularly interesting in light
of the firm's steadfast refusal to cooperate with our investigation," Dr.
Jeff Farrar of the California health agency's emergency response unit wrote
to Waddell in an e-mail about Kramer's fax.

The e-mails show ConAgra provided the name of a single distributor in
Southern California to Los Angeles County health officials shortly after it
recalled about 354,000 pounds of E. coli-contaminated meat June 30. But
state officials never got similar information from the company, even after
the recall was expanded on July 19 to nearly 19 million pounds of beef.

The meat was blamed for 47 illnesses in 23 states --- 17 in Colorado --- and
one death in Ohio.

"If true, this is unbelievable and inexcusable conduct by ConAgra," said
U.S. Rep. Henry Waxman, D-Calif., who has demanded answers from the U.S.
Department of Agriculture about how it handled the recall.

California's assertion that ConAgra wouldn't help the state track down
tainted meat would mean the company "put their corporate interest over the
safety of their customers," said Waxman, the ranking Democrat on the House
government reform committee.

Following public pressure, ConAgra in mid-August said it would voluntarily
provide its distribution list to states with confirmed E. coli cases. The
USDA couldn't make public the company's customer list because it is
considered a protected business secret.

Farrar first asked for ConAgra's customer list on July 18, a day before the
expanded recall, but a company official refused the request, the e-mails show.

Consumer groups want an overhaul of the USDA's recall system.

"I fear that recalls are moving into the direction of more secrecy," said
Carol Tucker Foreman of the Food Policy Institute at the Consumer
Federation of America.

Firms such as Swift voluntarily recall meat and are not required to
publicly disclose the names of businesses that got the meat. Under a law
that went into effect August 1, the USDA will provide the distribution lists
to those states with open-records laws that ensure the lists are not made

Disclosure under the USDA's new rule doesn't include a wholesaler's
customers, who purchase meat and resell it. That means that unless a
company volunteers the information, consumers and health officials still
have no idea whether meat in a home freezer may be subject to a recall
since ground beef often is mixed and repacked several times under different
names before it is purchased.

"Once (meat) is implicated in a recall and there is a public health risk,
companies should forfeit the privacy of their customer information," said
Foreman, the USDA's food safety director under Presidents Carter and Reagan.


 MICHAEL RILEY, DENVER POST: When Raul Jimenez comes off an
 eight-hour shift at Swift & Co.'s Greeley, Colorado slaughterhouse, he often can
 barely move, exhausted from working on a line that turns live animals into
 processed meat as fast as six times a minute. That plant, one of the largest slaughterhouses
 in  America, is a marvel of modern food processing.

 It also creates a pressure-cooker work environment that can pose dangers to
 both plant employees and the nation's consumers, say workers at the
 slaughterhouse, which was shut down November 15 after government inspectors
 found feces-contaminated meat three times in a week. The plant reopened [November 20].

 "You're working, and you see there is something wrong with the meat, the
 only thing you can do is let it pass because another piece is coming right
 behind it," said Jimenez, who works amid the sweltering heat of the plant's
 kill floor.

 Blood-soaked and reeking, that floor works like the opposite of a factory
 assembly line, according to industry experts. As carcasses speed down the
 line, workers skin, gut and carve. Each worker performs a single task
 hundreds, even thousands, of times an hour.

 Company officials say the line is running slower since the plant's
 reopening last week, that every employee now has the power to shut down
 production if contamination is spotted and that the U.S. Department of
 Agriculture has approved their plan to control fecal contamination.

 The first two are part of a wide-ranging safety review at the former
 ConAgra beef plant that began during the summer after the plant recalled
 18.6 million pounds of meat for potential contamination with E. coli
 bacteria, which can be lethal.

 But several workers said that even with the plant's recent problems,
 supervisors apply constant pressure to keep the line moving. Workers
 described a world in which they are driven, sometimes insulted and
 humiliated, to keep the plant's production up.

 "From the time you enter, you're told that if the plant stops ten minutes,
 the company will lose I don't know how many millions of dollars," said
 Maria Lilia Almaraz, who earns $10.60 an hour cutting bones from cuts of
 meat with a razor-sharp blade.

 "It's always 'faster, faster,"' she said.

 Some workers blame that environment directly for the recent problems,
 noting that the line was halted for fecal contamination twice the day of
 the shutdown, before USDA inspectors finally closed the plant.

 "There is a lot of stuff that goes by because the line is moving too fast,"
 said one worker whose job it is to catch contaminated meat on the line. The
 woman, a union representative, asked that her name not be used.

 She said that many key jobs in the plant are constantly understaffed and
 that training of the largely immigrant workforce is often shoddy. With too
 few workers on the line, "it's impossible to get it all."

 Many of the workers' charges are hard to verify independently, but actions
 taken by Swift in the two weeks after the shutdown bear some out.

 Line speed at the plant has slowed dramatically. The pace is now being
 determined hourly, based on the number of workers available, the level of
 their training and the condition of the animals, company spokesman Jim
 Herlihy said.

 One of the most important changes --- giving workers the power to stop
 production if they spot contamination --- was already in place two days
 before the shutdown, he said.

 "The decision was made to make every employee a direct participant in that
 and give them the ability to stop the line if they see something that needs
 to be addressed," Herlihy said.

 And the workers say supervisors have put more contamination cutters on
 every shift.

 But problems run deep, workers said, and many are not limited to the
 Greeley plant.

 Slaughterhouse work --- which in Greeley pays between $10 and $12 an hour -
 may be among the toughest in America. Federal accident statistics show that
 a meatpacking plant is three times more dangerous than the average construction

 That means high employee turnover, plant officials acknowledged. Workers
 said many employees often stay for only six months or a year, often
 returning to their home countries or moving on.

 "It seems we get in 20 new hires a week," said the union representative who
 asked not to be identified. "A lot of times, (managers) just throw them on
 the line and say, 'Watch the guy next to you."'

 Herlihy said the company has an extensive training program, over a specific
 period of time, for new workers. "We just don't take a new employee, put
 them on the line and tell them to watch the person next to them."

 Swift also has a new program to retain workers, including helping newcomers
 find permanent housing and get acclimated in the community, he said.

 But workers said managers must do more, including making the job safer.

 A former farm worker, Miguel Loma said that in 18 months at the plant, he
 has been injured twice. He broke his thumb last year. And recently he badly
 twisted his knee.

 "I was trying to keep up with the line, which was moving fast, and I
 slipped," Loma said.

 Workers say repetitive stress injuries, as well as back, shoulder and knee
 problems, are also common. "The workers aren't stable because they get hurt
 a lot," said Almaraz.

 Like other workers, Almaraz said she is afraid that the latest shutdown, on
 top of the other recent troubles at the plant, may cause it to close

 The work is hard, but she doesn't want to lose it.

 "A lot of people come here for work because it pays ... more than other
 jobs," said the single mother.

 "Other jobs pay $6 or $7 an hour. This one pays $10.60," she said. "I don't
 want to be here. I do it because I need to."


BUD HAZELKORN, NEW YORK TIMES: A Pennsylvania poultry plant suspected of being a source of a listeria that has killed eight people detected a sharp rise in listeria around the time of the outbreak last summer but did not tell the government until late September, Agriculture Department officials said December 20.

 Officials of the company, Wampler Foods have previously said that all the
 test results were in a file drawer available to government inspectors last
 summer. Regulators closed the plant in October, but it reopened a month
 later after a thorough cleaning.

 Critics say this dispute over notification illustrates how loose the
 government's regulation has been under a new system that places more
 responsibility for safety on the meat companies.

 Agriculture Department officials said they would have clamped down sooner
 if they had known about what they called a "spike" in Wampler's test
 results. But meat companies are typically not required to share the results
 of their own bacteria tests. Department officials say they are
 strengthening the rules.

 The officials said Wampler's tests detected an increase in general types of
 listeria, most of them harmless. But scientists say such tests are the
 first sign that a plant might be harboring listeria Monocytogenes, the
 deadly type in the recent outbreak, and shipping contaminated products.
 Besides the eight deaths, 54 people have become ill since July in New York,
 New Jersey, Pennsylvania and six other states.

 Government officials closed the Wampler plant on October 13 after inspectors
 found the strain of listeria monocytogenes that caused the deaths in the
 plant's drains. Wampler recalled 27 million pounds of turkey and poultry
 products. It recovered five million pounds.

 Officials at Wampler, a part of Pilgrim's Pride, the nation's
 second-largest poultry company, said no returned meat had tested positive
 for the strain that caused the outbreak.

 Identical bacteria have been found in turkey processed by an unrelated
 company, J. L. Foods in Camden, and health officials say it is unclear how
 most of the victims became ill.

 Vince Erthal, a former inspector at the Wampler plant, said earlier [in December] that it
 had persistent sanitation problems. Mr. Erthal said that
 for two years, he was unable to persuade other Agriculture Department
 officials to crack down on the plant.

 Mr. Erthal, who moved to another plant in September, said Wampler employees
 had told him informally at various times that the company's tests had found
 general types of listeria in the plant. But he said he did not know about
 the increase in the listeria levels last summer.

 Mr. Erthal and officials at the Food Safety and Inspection Service of the
 Agriculture Department also said the company never formally offered to
 share the results of its testing with the government.

 At issue now is what constitutes notification and whether the inspection
 agency has enough controls to verify the safety measures that a company
 says it is taking.

 Ron Morris, the senior vice president for turkey operations at Pilgrim's
 Pride, said the Wampler plant added listeria testing to its hazard-control
 plan in spring 2000. The company summarized the change at the start of the
 plan, Mr. Morris said.

 Wampler officials said the inspectors should have seen that and noted the
 change in government records.

 Mr. Morris said that since then, the company routinely filed its listeria
 test results in a drawer marked "U.S.D.A.," where inspectors could review
 them. The company disinfected its equipment whenever it found listeria, he

 But Steven Cohen, a spokesman for the inspection service, said that at
 least five inspectors at the plant said they never saw any sign that the
 company had added bacterial testing to its plan and that none were told
 that the testing logs were in the drawer.

 Mr. Erthal added that to avoid tension, inspectors were typically told to
 ask company employees for records rather than to search for them on their

 After the strain of listeria in the outbreak was found in the plant's
 drains, Mr. Cohen said, Wampler provided records showing that the
 percentage of tests that detected listeria was sharply higher in July and
 August than in May, June or September.

 Company officials said it was not unusual for listeria levels to rise in
 the summer. But Mr. Cohen said that whatever the company did to try
 eliminate the bacteria, "it was not effective."


BLOOMBERG NEWS: Tyson Foods Inc. more than doubled Chief Executive Officer
Tyson's pay to $7.6 million in the last fiscal year as the world's
largest meat producer boosted earnings with cost cuts and the purchase of
beef and pork producer IBP Inc.

Tyson earned $1 million in salary, a bonus of $3.5 million, $2.8 million in
restricted stock and $495,000 for travel and entertainment expenses and
retirement plan contributions, according to a Securities and Exchange
Commission filing. In 2001, he was paid $650,000 in salary, a bonus of $2.1
million and $233,000 for travel and retirement. He didn't receive restricted

The Springdale, Arkansas-based company's fiscal fourth-quarter earnings jumped 75% to $84 million, or 24 cents a share, as profits from IBP made up
for pork losses and an increase in feed costs that cut into poultry margins.
Profit surged to $383 million from $88 million a year earlier.

The firm also said Thursday it will reduce the size of its board to ten
members from 15 and increase the proportion of directors from outside the

Tyson last month said it will shut two poultry plants and shed 1,510 jobs.
The company said it will take a pretax charge of $60 million to $70 million
in the fiscal first quarter ended Decermber 28. It also reduced its earnings
forecast for the quarter to a range of 14 cents to 18 cents a share.

In addition to boosting the CEO's base salary 54% to $1 million, the
company awarded Tyson options to buy 200,000 shares in future years.


The Organization for Competitive Markets has submitted comments to the Federal District Court, District of Columbia faulting the U.S. Department of Justice DOJ) in its approval of a merger by Archer Daniels Midland (ADM). The comments were drafted Professor Peter Carstensen of the University of Wisconsin law school.

OCM told the court that it cannot approve ADM's acquisition of Minnesota
Corn Processors absent more information on whether the merger will unduly
harm competition in three markets: corn syrup, high fructose corn syrup and

"ADM is a serial price fixer that should not be allowed to increase its
market power in any market," asserted Keith Mudd, OCM vice president.  "ADM
and Minnesota Corn Processors are the number one and two ethanol producers
in the country.  DOJ's consent to their combination is inexcusable.
Obviously, none of the DOJ attorneys have tried to sell their annual grain
production in this market."

DOJ filed a petition in Federal District Court, District of Columbia, on
September 6, 2002 to block ADM's proposed acquisition of MCP.  On the same
day, it asked the judge to approve a Consent Decree that would allow the
merger if MCP pulled out of a joint venture with another corn processor.  On
September 13, 2002, DOJ filed a Competitive Impact Statement, as required
under law, to explain why the Consent Decree will preserve competition.
These documents can be viewed on the DOJ website at

Professor Carstensen filed his comments to the Consent Decree on behalf of himself, OCM and others, which is allowed by a law known as the Tunney Act.

OCM's comments asked the federal judge to reject the consent decree because
DOJ failed to show that the combination would preserve competition.
Specifically, DOJ:

1. Failed to disclose MCP's market share in corn syrup and high fructose
corn syrup, which is necessary to evaluate the effect of the deal on those
2. Failed to disclose or discuss ADM's ownership interests in other
companies with which it competes.
3. Failed to disclose or discuss a recent Seventh Circuit Court of Appeals
decision that found a substantial risk of price fixing by ADM and others in
the high fructose corn syrup market.
4. Failed to discuss or show how competition will be preserved after the
deal is completed.

"There is no basis for the court to allow this merger without requiring DOJ
to justify that the consent decree will preserve competition," said Fred
Stokes, OCM president.  "It escapes me how DOJ can claim to be enforcing
antitrust laws when it seeks to allow a company like ADM to gain an even
more dominant position in grain and oilseed processing."

The Organization for Competitive Markets is a multidisciplinary, nonprofit
group of farmers, ranchers, academics, attorneys, and policy makers
dedicated to reclaiming the agricultural marketplace for independent
farmers, ranchers and rural communities.


RICHARD A. LEVINS: In 1792, a Scottish observer worried that the "unrestrained and universal commerce" advocated by Adam Smith would "propagate opinions as commodities". Those opinions, now propagated so widely, range from the Ricardian teachings of contemporary economics texts to the impassioned world of Vandana Shiva.

Samuelson and Nordhaus (Microeconomics, 17th Edition) put the
Ricardian case this way: "The principle of comparative advantage holds that
each country will benefit if it specializes in the production and export of
those goods that it can produce at relatively low cost.  Conversely, each
country will benefit if it imports those goods, which it produces at
relatively high costs."  (p. 299)

 Specialization is quickly pronounced to be the "unshakable basis for international trade."

In Stolen Harvest, Shiva presents a radically different view.  For
her, specialization is eminently "shakable":  "Globalization has created
the McDonaldization of world food, resulting in the destruction of
sustainable food systems." (p. 70)

Elsewhere, she explains how "the myth of 'free trade' and the global economy becomes a means for the rich to rob the poor of their right to food and even their right to life".  (p. 7)

How can the two views be so different, and what, if anything, can
economists learn from the strident writings of Shiva?  The answers to both
questions arise from the way elementary texts present the case for
comparative advantage theory.  The standard treatment involves two
countries and two goods, one of which is usually an agricultural product
and the other a manufactured good.

Samuelson, for example, has used "food" and "clothing" since the First Edition appeared in 1948.  That one of the goods is produced in a biological process, and the other in a manufacturing, appears to be of no consequence.

In Shiva's world, however, the difference is everything: "food is
our most basic need, the very stuff of life".  (p. 5) Stolen Harvest, I
think, is best read by economists as a solid case for the uniqueness of
those biological processes that lead to food production.
To fold a small farmer in India and a German buying a new hat into a single, simple trade
theory will lead to problems in the environment, biodiversity, animal
welfare, and culture.  Our usual nod of the head to "externalities" will
not satisfy Shiva.

Take, for example, her discussion of confinement animal agriculture:

Robbing cattle of the roughage they need does not merely treat them
unethically; it also does not reduce the acreage needed to feed the cows,
since the concentrate comes from grain that could have fed people.  The
shift from a cooperative, integrated system to a competitive, fragmented
one creates additional pressures on scarce land and grain resources.  This
in turn leads to non-sustainability, violence to animals, and lower
productivity when all systems are assessed. (p. 63)

Shiva's thinking on the unique importance of food is also evident
throughout her book when she speaks of issues of corporate control of the
food system and what she calls "food democracy."

Democratic control over food requires the reining in of the unaccountable
power of corporations.  It involves replacing the 'free trade' order of
corporate totalitarianism with an ecological and just system of production
and distribution, in which the earth is protected, farmers are protected,
and consumers are protected.  (p. 117)

A broad concern for the welfare of all living things, for culturally
appropriate uses of food, and for protecting the diversity of plant and
animal genetics is seemingly impossible to fit into standard comparative
advantage analysis.  Should we stay with simplifying assumptions, or listen
to Shiva?

Listening to Shiva, especially at first reading, will be difficult for many
of us.  She is not an economist, and her language is a tad over-the-top in
many places: "corporate hijacking of the food system" and "food
dictatorship" are not terms from which academic articles are often

But she does have a significant advantage over Ricardo in that
she is a leading scientist and writes with current knowledge.  Ricardo, we
must remember, lived a long time ago.

Science, like agriculture, has changed so much as to make many of Ricardo's
observations on the world around him of mere historical interest.  All but
a few biographers forget his dabbling into the nature of electricity.  Nor
is it widely noted that Ricardo died prematurely of a common ear infection
after treatments with leeches and poultices failed.

The environmental implications of global specialization in crop and livestock production
would have been impossible to address with early-nineteenth century science.
Modern science acknowledges that specialization in food production is
fundamentally different than specialization in manufacturing.

While Ricardo can easily be understood and forgiven, it is more difficult to
understand how his trade theory, born in a world unrecognizable to us, has
survived so well in the lore of free market economics.  Perhaps Shiva will
help us to rethink the fundamental questions we ask in trade theory.  We
should not argue with other economists over simplified worlds in which all
products are merely "goods".  Rather, we should engage physical scientists
in a discussion of issues surrounding real-world trade in food, that most
important and unique of all goods.

Richard A. Levins teaches in the Department of Agricultural Economics at the
University of Minnesota.


Isao Fujimoto is among six faculty honored with buildings at The Colleges of La Rue residential complex named after them. They are being recognized for contributing in outstanding ways to the undergraduate experiences of UC Davis students.

"This naming is a small way of extending our thanks to these individuals
for all that they have meant to so many students over the year,"said
Chancellor Larry Vanderhoef.

"UC Davis will be forever in their debt, and we would like our gratitude
to be known in tangible, long term fashion."

Fujimoto was known for firing the imaginations of untold numbers of students,
encouraging them to apply what they learn --- regardless of their majors --- to
improving the quality of life in their communities. His work with students on issues relating to farm workers and family farm agriculture is legendary.

He also helped found the Asian American Studies program and the Graduate Program Community Development at UC Davis.  He received the Excellence in University Instruction award from the national Rural Sociology Society and was twice finalist for the campus' Distinguished Teaching Award. He also received the College of Agricultural and Environmental Sciences' Outstanding Advisor award.

Though Fujimoto retired in 1994, he continues to teach community development courses, including UCDavis courses taught in San Francisco and Japan. He continues as the academic coordinator for the Rural Development Leadership Network Institute at UCDavis and is the Project Facilitator for the Central Valley Partnership for Citizenship encouraging enlightened and empowered citizenry among emerging immigrant communities throughout California's Central Valley. He was the first recipient of the City of Davis' Human Relations Award when it was inaugurated in 1986.

The ceremony took place on Sunday December 15.


NEW YORK TIMES: Fay Bennett Watts, who led national efforts to help farm laborers and the rural poor, died on December 19 in Shelburne, Vermont.  She was 88 and lived in Wake Robin, a retirement community in Vermont.

 Known professionally as Fay Bennett, she held posts at the National
 Sharecroppers Fund from 1952 through 1974, directing attention to rural

 In the 1950's she helped form the National Council for Agricultural Life
 and Labor, an alliance of dozens of national organizations that sought to
 spotlight the difficulties facing migrant farm workers to generate laws to
 protect them.

 During the Kennedy and Johnson administrations, she served on the National
 Advisory Committee on Rural Areas Development for the Department of

 She was born in Springfield, Massachusetts and graduated from
 Simmons  College in  Boston.  Her husband, Rowland Watts, a civil
  liberties lawyer, died in 1995.

 She is survived by a daughter, Linda Watts of Shelburne; two sons, David
 Watts of Charlotte, Vermont and Lanny Watts of Burlington, Vermont and four

                                            EDITOR'S NOTE

Preparing to post this year-end 213th 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 them.

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
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