Monitoring corporate agribusiness from apublic interest perspective

Issue #2 September 10, 1998


"This is not Business Ethics 101. This is how you deal with the real
world. You have to mislead the competition." Reid
Weingarten has told jurors in a closing argument at the current ADM
trial in Chicago. In reality, competitors lied to each
other routinely, but Weingarten told jurors that no price-fixing
agreements were made.

Weingarten, who represents ADM's Terrance Wilson, who along with Michael
Andreas and ex-FBI mole Mark Whitacre
are accused of fixing prices and market shares with fellow lysine
producers. ADM, "Supermarkup to the World," pleaded
guilty to antitrust charges and paid a $100 million fine in 1996.

Whatever the verdict in this case, which some have called the best
documented corporate crime in American history with
some 200 hours of audio and video recordings, the trial has provided an
interesting peek into the world of corporate speak.

Earlier in the trial Weingarten told jurors in an opening statement,
"there was bluffing; the philosophy here is to hold your
competitor's hand so you don't get stabbed in the back." And it was Mark
Whitacre who recalled that also within the ADM
family it was common to hear the advice that "the competitor is our
friend and the customer is our enemy."

During the current trial, one of the tapes shows executives from rival
livestock-feed market companies meeting secretly in
an Atlanta hotel under cover of a trade show getting ready to talk
prices when they hear a knock on the door. "Yes? FTC?"
jokes Ajinomoto Co. executive Kanji Mimoto, in a guilty reference to
regulators at the Federal Trade Commission. As it
turned out, Mimoto wasn't far off. An FBI agent posing as a bellhop was
delivering a bugged briefcase to the private
room, while his colleagues were recording the meeting with a hidden
video camera.

As Greg Burns writes in the Chicago Tribune, "The ADM trial tapes reveal
a casual disregard for the rules of commerce
that seems to confirm the worst suspicions about big business. The
jet-set life of executives at powerful global companies
is cast in a dark light, giving the impression that lawlessness is a
routine part of doing business on the world stage."


The calm of a 16-day international seminar on Globalization and
Resistance being held in Cologny, Geneva late last month
was shattered on August 27 when it was raided by some 40 police officers
following a week of close police surveillance.
Fifty participants, from 17 countries, were subsequently taken in riot
vans to the local police station.

Officers illegally searched individuals and private belongings,
detaining all 50 participants at the station. The detainees,
including a six-year old girl from the Ukraine, were held for over two
hours without explanation. Most were eventually
without charge.However, five remained in police custody for yet another
five hours. Four of these were then released - the
fifth is still in custody.

The seminar was convened to discuss economic globalization and its
impact on communities and the environment, as well
as peoples' efforts to reclaim control over their own lives. The
seminar was entirely educational and consisted of lectures
and discussions only by international economists, journalists,
representatives of people's movements, and workers from
human rights and other non-governmental organisations.

Speakers included well-known people like Professor Nanjundaswami from
the Karnataka Farmers Movement of India
and prominent author and President of the Observatoire de la
Mondialisation, Susan George, who had lectured to the
seminar two days earlier. George said she had found, "a group of
peaceful and law-abiding young people." She deplored
the police actions and called for the immediate release of those

The police, in a concerted action, entered the seminar site at 7.30 am,
waking the guests, searching their accommodation
without a warrant, and confiscating personal property. They refused to
give receipts for the items, which included videos,
notebooks, an artist's portfolio, personal diaries and photographs, and
the organizers' documents.

When a woman from the seminar asked a policeman, "Isn't what you're
doing illegal?," he replied, "Yes, totally " Police
were also overheard making racist, sexist, and anti-Semitic comments.
Taking a passport from the stack, a policeman said,
"Oh, that's the Jew!" A Bangladeshi charity worker who had just been
awoken was singled out for
particularly offensive treatment.

The seminar was aimed at critically challenging the hegemonic consensus
of neoliberal ideology that elevates free trade to a
provider of great wealth and prosperity for all. Critics of such a
philosophy point out that the world we live in is
coming under the control of unaccountable, undemocratic, and highly
transnational institutions such as the World Bank, the International
Fund, the World Trade Organisation (WTO), and the European Union.
Powerful tools for the development of the
neoliberal agenda are trade treaties such as the proposed
Multilateral Agreement on Investment and various other regional trade

It is also pointed out that power and wealth are concentrating in the
hands of transnational corporations, such as Shell,
Nestle, IBM, and Monsanto. Decision making shifts further and further
from local community control, and into the hands
of corporate lobby groups, such as the International Chamber of
Commerce, and the Geneva based World Economic

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It came as no surprise to independent cattle ranchers or family farmers
that a controversial cattle marketing practice costs
them tens of millions of dollars each year, according to an economic
analysis released by the Western Organization of
Resource Councils (WORC).

The organization of cattle ranchers and family farmers believes the
analysis gives Secretary of Agriculture Dan Glickman
more than enough evidence that he needs to restrict the use of the
marketing practice, called "captive supplies" by ranchers.

Eighteen months ago, the United States Department of Agriculture asked
for public comment on a "petition for rulemaking"
filed by WORC. The petition asked USDA to limit the use of "captive
supplies" of cattle by beef packers. Cattle that
packers own and feed in their own feed lots are called "captive" because
the packers control them.

Packers also sign contracts with feedlot owners to buy some or all of
their cattle, which are also called "captive." Many
farmers and ranchers say that beef packers' use of
captive supplies limits open competition and lowers the price they get
for their cattle ù without lowering the price of beef
to consumers.

At the present time the USDA is still considering new rule-making power
based on proposals submitted to it by WORC
which would 1) disallow formula or basis pricing on forward contracted
slaughter cattle; 2) require that forward contracts
be offered in an open, public manner, and 3) require that packer-fed
cattle be sold on an open, public market.

Currently, beef packing companies can take such cattle without ever
bidding in open markets, such as livestock sale barns.
By keeping their packing plants full for days and weeks at a time with
such "captive supplies" they can easily force open
market prices (or "cash" market prices) down by simply not buying for
long periods.

Currently, with the huge numbers of cattle that are fed by the major
meatpackers plus non-negotiated formula cattle, there is
little interest left in their competing in the cash market. An
independent analysis published recently by Les Messinger,
Market analyst for Barnes Brokerage in Chicago, shows conservatively,
that the cattle producer has lost $220 per head
since the growth in captive supplies (March, 1994) and the loss of
competition among the big three packers, IBP, Cargill
and ConAgra, who today currently control over 81% of the beef
slaughtering industry.

The recent analysis, prepared for WORC by agricultural economist
Catherine Durham
of Oregon State University, uses information in a study done for USDA to
estimate how much the use of captive supplies
lowered prices paid to cattle producers. The total impact of captive
supplies on cattle prices was between $51.9 million and
$527 million, according to Professor Durham's analysis. The difference
in the numbers depends on which of several
models in the USDA study is used, and on other assumptions needed to
make the estimate.

"USDA officials have denied that there is evidence of harm to cattle
producers from captive supplies," said Tom Breitbach,
a Circle, Montana, farmer speaking for WORC. "This analysis by Dr.
Durham shows there is evidence of significant harm
to producers. If USDA won't act with this evidence, what on earth good
is it?," Breitbach asked.

Meanwhile, back at the USDA corral Glickman has met with a bipartisan
group of U.S. senators to discuss legislation that
would require that meat be labeled as domestic or imported. A memo
circulating within the USDA's leadership ranks
recently caught the attention of some agricultural groups. The memo
expressed some USDA officials' opposition to the
meat-labeling provision because it could cost the government $60
million a year to enforce and could hurt U.S. exports.

Glickman has told reporters that he is willing to work with lawmakers
to reach a sensible plan for meat labeling, as long
as the plan would not distort trade.


Arguing that "as a capital-intensive, export-dependent sector, U.S.
agriculture is directly and significantly affected by
monetary policy," Sen. Richard Lugar, R-Ind., is urging President Bill
Clinton to appoint an agricultural expert to fill the
vacancy on the Federal Reserve Board.

"A nominee familiar with the U.S. food and fiber sector - coupled with
the requisite expert knowledge of monetary policy
and the world financial system - would be an asset to the Board of
Governors," he wrote. Lugar said he would like to see
a candidate who has experience in "some facet of agriculture or
agribusiness, whether in production, processing, lending
or some other field of endeavor."

Some one say from Cargill Investments, or perhaps Dwayne O. Andreas when
he decides to retire as Chairman of the
Board from ADM, "Supermakerup to the World," or maybe Dean Kleckner from
the American Farm Bureau Federation, or
John S.Reed, chairman of the board of Citicorp and a Monsanto board

One should not, however, expect to see an ordinary family farmer
nominated for such a position given the "esteem" in
which they are held in the agricultural financial community. As Neill
McKinstray, manager of transportation and market
development with Andersons Inc., recently pointed out in commenting on
how there has been no rush among farmers to
embrace a pilot program launched by the Commodity Futures Trading
Commission in trading over-the-counter agriculture
options in the U.S earlier this year.

"The CFTC still believes that farmers don't have the mental capacity to
use this system without heavy oversight,"
McKinstray complained.


Relentless in their determination to revive the bracero system corporate
agribusiness's grower class are once again
vigorously lobbying the federal government and Congress to win approval
of the program.

This past summer under the guise of "guest worker" legislation in the
U.S. Senate they took the first step in bringing forth
the program. The Senate approved bill would allow U.S. growers to import
unlimited numbers of Mexican farmworkers
under no-strike, short-term contracts.

The original bracero program was created during World War II after
Public Law 45 was enacted which denied American
farmworkers the right to leave their jobs and prohibited the use of
federal funds to improve their wages and living
conditions. Then the U.S. Department of Labor signed agreements with the
governments of Mexico and the British West
Indies to import workers under temporary, no-strike contracts.

Though the program was intended as a wartime manpower emergency measure,
Congress repeatedly extended it beyond
1945, with the number of braceros peaking during the Korean War. It was
not until 1964 after four to five million
Mexican farmworkers endured miserable working conditions in the U.S.
that that the Congress, despite the protestations of
corporate agribusiness and its principal stalking horse --- the American
Farm Bureau Federation --- finally voted to end the

Currently have the farm worker work force is 1.6 million, according to
the Department of Labor's National Agricultural
Workers Survey. That includes about a million domestic workers (mostly
immigrants), perhaps 600,000 undocumented
workers, and about 20,000 H2-A workers (foreign farmworkers whom growers
import legally under short-term
contracts). Illegal workers still account for as much as 70% of the
seasonal farm work force, depending on the crop.

As Cindy Hahamovitch an associate professor of history at the College of
William & Mary, points out using undocumented
workers is, of course, illegal, and growers don't like the H2-A program
because it comes with strings attached. Growers
who want H2-A workers must demonstrate that domestic workers aren't
available, pay prevailing wages and provide free
housing that meets federal migrant housing standards.

"In return," she adds, "growers get workers who can't just switch jobs
if they don't like the wages or conditions and who
can be deported for striking. Growers complain that this system is
cumbersome and too costly. Critics call it indentured

Advocates of the current Senate bill argue that the current "guest
worker" program differs from the original bracero
program in that it includes measures designed to protect workers. What
they neglect to say is that the bracero program also
came with stringent standards for working and living conditions;
provisions that American farmworkers never enjoyed.

The current Senate plan would remove most of what growers don't like
about the H2-A program. There would be no limit
on the number of farmworkers growers could import, and the
responsibility would be on federal officials to prove that
domestic workers are available before denying a grower the right to
import workers. In addition, growers would no longer
have to provide housing and they would only be obligated to guarantee
that their workers earned the minimum wage as a
group, not as individuals.

Growers under the original bracero program supposedly couldn't get
braceros if their housing didn't make Labor
Department standards; they were required to pay at least a set minimum
wage; and the workers were guaranteed subsistence
and three-quarters of the promised wages, even if they were idled
because of freezes or floods. The Mexican government
negotiated this contract, and also acted as a sort of union negotiator
for its countrymen.

"The problem," as Hahamovitch observes, "then and now is that labor
regulations are useless if the workers don't have the
power to enforce them. Once the war ended and government officials
turned their attention to other matters, Mexicans
found themselves sleeping in sordid labor camps, drinking contaminated
water and accepting whatever wages they were
offered. The regulations designed to protect them were rarely enforced.
Those who complained or went on strike were
deported and blacklisted.

"What's to stop a new bracero program from devolving into a similar
system? Farmworkers still lack the right of
collective bargaining and "guest workers" are particularly vulnerable
because they labor under the threat of deportation.

It is worth noting that if their was in fact a labor shortage today,
farm wages would be rising. Yet Congress's fact-finding
commissions have found that farm wages have been falling for 20 years,
and housing conditions in the East Coast migrant
stream and in California are deteriorating. Remarkably, the states where
growers protest loudest about labor scarcity are the
places where wages are lowest.

"Two remarkable things are happening," Douglas Massey, a University of
Pennsylvania sociologist and an expert on
Mexican migration recently told the Wall Street Journal. "Immigration
has shifted from being a narrow regional
phenomenon, where 75% of migrants went to California, to a national
phenomenon involving every region." The other
change, he says, "is the diversity of Mexican employment categories."

Al French, an Agriculture Department labor expert, also notes that even
when farm
wages keep pace with nonfarm wages, nonfarm jobs are prized because of
relatively high prices many migrants are required to pay for temporary
housing and because of the work days they lose
moving from farm to farm.


If, as some are predicting, that within three to five years agriculture,
or as it is beginning to be euphemistically called, "life
sciences" will be dominated by three biotech megacomplexes (Monsanto,
DuPont and Novartis), then it should come as no
surprise that such an arrangement will have the blessing of the
government and its various federal regulatory agencies. The
betrothal, according to the Third World Network, the Edmonds Institute
and others, has already begun.

David W. Beier . . . former head of Government Affairs for Genentech,
Inc., now chief domestic policy advisor to Al
Gore, Vice-President of the United States.

Linda J. Fisher . . . former Assistant Administrator of the United
States Environmental Protection Agency's Office of
Pollution Prevention, Pesticides, and Toxic Substances, now Vice
President of Government and Public Affairs for
Monsanto Corporation.

L. Val Gidings . . . former biotechnology regulator and (biosafety)
negotiator at the United States Department of
Agriculture (USDA/APHIS), now Vice President for Food & Agriculture of
the Biotechnology Industry Organization

Marcia Hale . . . former assistant to the President of the United
States and director for intergovernmental affairs, now
Director of International Government Affairs for Monsanto Corporation

Michael (Mickey) Kantor. . . former Secretary of the United States
Department of Commerce and former Trade
Representative of the United States, now member of the board of
directors of Monsanto Corporation

Josh King . . . former director of production for White House events,
now director of global communication in the
Washington, D.C. office of Monsanto Corporation

Terry Medley . . . former administrator of the Animal and Plant Health
Inspection Service (APHIS) of the United States
Department of Agriculture, former chair and vice-chair of the United
States Department of Agriculture Biotechnology
Council, former member of the U.S. Food and Drug Administration (FDA)
food advisory committee, and now Director
of Regulatory and External Affairs of Dupont Corporation's
Agricultural Enterprise

Margaret Miller . . . former chemical laboratory supervisor for
Monsanto, now Deputy Director of Human Food Safety
and Consultative Services, New Animal Drug Evaluation Office, Center
for Veterinary Medicine in the United States Food
and Drug Administration (FDA).*

William D. Ruckelshaus . . . former chief administrator of the United
States Environmental Protection Agency (USEPA),
now (and for the past 12 years) a member of the board of directors of
Monsanto Corporation.

Michael Taylor . . . former legal advisor to the United States Food and
Drug Administration (FDA)'s Bureau of Medical
Devices and Bureau of Foods, later executive assistant to the
Commissioner of the FDA, still later a partner at the law firm
of King & Spaulding where he supervised a nine-lawyer group whose
clients included Monsanto Agricultural Company,
still later Deputy Commissioner for Policy at the
United States Food and Drug Administration, and now again with the law
firm of King & Spaulding.*

Lidia Watrud . . . former microbial biotechnology researcher at
Monsanto Corporation in St. Louis, Missouri, now with
the United States Environmental Protection Agency Environmental Effects
Laboratory, Western Ecology Division.

Clayton K. Yeutter . . . former Secretary of the U.S. Department of
Agriculture, former U.S. Trade Representative (who
led the U.S. team in negotiating the U.S. Canada Free Trade Agreement
and helped launch the Uruguay Round of the
GATT negotiations), now a member of the board of directors of Mycogen
Corporation, whose majority owner is Dow
AgroSciences, a wholly owned subsidiary of The Dow Chemical Company.

* Margaret Miller, Michael Taylor, and Suzanne Sechen (an FDA "primary
reviewer for all rbST and other dairy drug
production applications" ) were the subjects of a U.S. General
Accounting Office INVESTIGATION IN 1994 for their
role in FDA's approval of Posilac, Monsanto's formulation of
APPROVAL" and only "one minor deviation from now superseded FDA
regulations." (Quotations are from the 1994
GAO report)


In the video "Agriculture is About to Get Very Small," Steve Barker,
Vice-President of Marketing, Research and
Development for Agribank, outlines how it is almost inevitable that in
the not too distant future agriculture will be
dominated by three megacomplexes who will in turn have alliances with
contract producers. The only exception to that, he
notes "is the poultry industry where we see evidence that poultry
farmers are `pushing back.'"

There is, he continues, "large concern on the part of poultry famers
that they are not getting a fair shake from their
processors. One has to question whether or not they just might be two
decades ahead of their peers who don't understand
what the whole relationships issue with processors\integrators is."

John Morrison, 58, who for the past six years was the Executive Director
of the National Contract Poultry Growers
Association and the President of the National Contract Growers Institute
was one of those family farm "visionaries," one of
the first poultry growers to "push back."

Born in New Mexico he spent over 25 years in the oil exploration
business in Texas and Louisiana after graduating from
the New Mexico School of Mining in Sequoia, NM and serving in the Army
and being based in Louisiana from the late
1950's to early 1960's. In 1986, Morrison left his position as
president of a Dallas based oil and gas exploration company
and moved to Louisiana to become a contract poultry farmer prior to his
staff role with the NCPGA.

As a leader in the NCPGA, he worked to expand and strengthen the
organization of poultry growers and expanded their
work with family farmers throughout the country through active
participation and membership in the Washington DC based
National Family Farm Coalition and the Denver, CO based National Farmers

On Sunday, September 6 , John Morrison died suddenly of an apparent
attack at his home in Dubberly, Louisiana.He is survived by his wife
Judi of Dubberly, LA; two daughters Johnna Elzen of
Colliersville, TN and Jennifer Graham of Memphis, TN; two stepsons Cory
Kurk and Alex Kurk of Dubberly, and four
grandchildren, Beau Adam Bernard, Cameron Bernard, Lacey Bernard, and
Aaron Graham of Memphis. He is also
survived by eleven brothers and sisters from across the country.

Morrison's family suggests that memorial gifts be made to the National
Growers Institute, PO Box 780, Minden, LA 71055 in lieu of flowers.
Morrison's home address is 160 Pierce Ln,
Dubberly, LA 71024.