Monitoring corporate agribusiness from apublic interest perspective
Issue #2 September 10, 1998
IS NOT BUSINESS ETHICS 101"
"This is not Business Ethics 101. This is how you deal with
world. You have to mislead the competition." Reid
Weingarten has told jurors in a closing argument at the current
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
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
documented corporate crime in American history with
some 200 hours of audio and video recordings, the trial has provided
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
friend and the customer is our enemy."
During the current trial, one of the tapes shows executives from
livestock-feed market companies meeting secretly in
an Atlanta hotel under cover of a trade show getting ready to
prices when they hear a knock on the door. "Yes? FTC?"
jokes Ajinomoto Co. executive Kanji Mimoto, in a guilty reference
regulators at the Federal Trade Commission. As it
turned out, Mimoto wasn't far off. An FBI agent posing as a bellhop
delivering a bugged briefcase to the private
room, while his colleagues were recording the meeting with a hidden
As Greg Burns writes in the Chicago Tribune, "The ADM trial
a casual disregard for the rules of commerce
that seems to confirm the worst suspicions about big business.
jet-set life of executives at powerful global companies
is cast in a dark light, giving the impression that lawlessness
routine part of doing business on the world stage."
THEY COME FOR YOU IN THE MORNING, THEY WILL COME FOR ME IN THE
EVENING." - ANGELA DAVIS
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
following a week of close police surveillance.
Fifty participants, from 17 countries, were subsequently taken
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
hours without explanation. Most were eventually
without charge.However, five remained in police custody for yet
five hours. Four of these were then released - the
fifth is still in custody.
The seminar was convened to discuss economic globalization and
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
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
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
waking the guests, searching their accommodation
without a warrant, and confiscating personal property. They refused
give receipts for the items, which included videos,
notebooks, an artist's portfolio, personal diaries and photographs,
the organizers' documents.
When a woman from the seminar asked a policeman, "Isn't what
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
of neoliberal ideology that elevates free trade to a
provider of great wealth and prosperity for all. Critics of such
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
It is also pointed out that power and wealth are concentrating
hands of transnational corporations, such as Shell,
Nestle, IBM, and Monsanto. Decision making shifts further and
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
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
analysis gives Secretary of Agriculture Dan Glickman
more than enough evidence that he needs to restrict the use of
marketing practice, called "captive supplies" by ranchers.
Eighteen months ago, the United States Department of Agriculture
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"
the packers control them.
Packers also sign contracts with feedlot owners to buy some or
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
for their cattle ù without lowering the price of beef
At the present time the USDA is still considering new rule-making
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
bidding in open markets, such as livestock sale barns.
By keeping their packing plants full for days and weeks at a time
such "captive supplies" they can easily force open
market prices (or "cash" market prices) down by simply
not buying for
Currently, with the huge numbers of cattle that are fed by the
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
competition among the big three packers, IBP, Cargill
and ConAgra, who today currently control over 81% of the beef
The recent analysis, prepared for WORC by agricultural economist
of Oregon State University, uses information in a study done for
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
make the estimate.
"USDA officials have denied that there is evidence of harm
producers from captive supplies," said Tom Breitbach,
a Circle, Montana, farmer speaking for WORC. "This analysis
Durham shows there is evidence of significant harm
to producers. If USDA won't act with this evidence, what on earth
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
circulating within the USDA's leadership ranks
recently caught the attention of some agricultural groups. The
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.
86 YEARS TOO LATE
Arguing that "as a capital-intensive, export-dependent sector,
agriculture is directly and significantly affected by
monetary policy," Sen. Richard Lugar, R-Ind., is urging President
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 -
the requisite expert knowledge of monetary policy
and the world financial system - would be an asset to the Board
Governors," he wrote. Lugar said he would like to see
a candidate who has experience in "some facet of agriculture
agribusiness, whether in production, processing, lending
or some other field of endeavor."
Some one say from Cargill Investments, or perhaps Dwayne O. Andreas
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
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
McKinstray, manager of transportation and market
development with Andersons Inc., recently pointed out in commenting
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
use this system without heavy oversight,"
BRACERO PROGRAM LIVES !!!!
Relentless in their determination to revive the bracero system
agribusiness's grower class are once again
vigorously lobbying the federal government and Congress to win
of the program.
This past summer under the guise of "guest worker" legislation
U.S. Senate they took the first step in bringing forth
the program. The Senate approved bill would allow U.S. growers
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
federal funds to improve their wages and living
conditions. Then the U.S. Department of Labor signed agreements
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
Congress repeatedly extended it beyond
1945, with the number of braceros peaking during the Korean War.
not until 1964 after four to five million
Mexican farmworkers endured miserable working conditions in the
that that the Congress, despite the protestations of
corporate agribusiness and its principal stalking horse --- the
Farm Bureau Federation --- finally voted to end the
Currently have the farm worker work force is 1.6 million, according
the Department of Labor's National Agricultural
Workers Survey. That includes about a million domestic workers
immigrants), perhaps 600,000 undocumented
workers, and about 20,000 H2-A workers (foreign farmworkers whom
import legally under short-term
contracts). Illegal workers still account for as much as 70% of
seasonal farm work force, depending on the crop.
As Cindy Hahamovitch an associate professor of history at the
William & Mary, points out using undocumented
workers is, of course, illegal, and growers don't like the H2-A
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
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.
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
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
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
braceros if their housing didn't make Labor
Department standards; they were required to pay at least a set
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
Those who complained or went on strike were
deported and blacklisted.
"What's to stop a new bracero program from devolving into
system? Farmworkers still lack the right of
collective bargaining and "guest workers" are particularly
because they labor under the threat of deportation.
It is worth noting that if their was in fact a labor shortage
farm wages would be rising. Yet Congress's fact-finding
commissions have found that farm wages have been falling for 20
and housing conditions in the East Coast migrant
stream and in California are deteriorating. Remarkably, the states
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
Al French, an Agriculture Department labor expert, also notes
wages keep pace with nonfarm wages, nonfarm jobs are prized because
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.
MADE IN CORPORATE HEAVEN
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
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
L. Val Gidings . . . former biotechnology regulator and (biosafety)
negotiator at the United States Department of
Agriculture (USDA/APHIS), now Vice President for Food & Agriculture
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
now director of global communication in the
Washington, D.C. office of Monsanto Corporation
Terry Medley . . . former administrator of the Animal and Plant
Inspection Service (APHIS) of the United States
Department of Agriculture, former chair and vice-chair of the
States Department of Agriculture Biotechnology
Council, former member of the U.S. Food and Drug Administration
food advisory committee, and now Director
of Regulatory and External Affairs of Dupont Corporation's
Margaret Miller . . . former chemical laboratory supervisor for
Monsanto, now Deputy Director of Human Food Safety
and Consultative Services, New Animal Drug Evaluation Office,
for Veterinary Medicine in the United States Food
and Drug Administration (FDA).*
William D. Ruckelshaus . . . former chief administrator of the
States Environmental Protection Agency (USEPA),
now (and for the past 12 years) a member of the board of directors
Michael Taylor . . . former legal advisor to the United States
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
clients included Monsanto Agricultural Company,
still later Deputy Commissioner for Policy at the
United States Food and Drug Administration, and now again with
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
Laboratory, Western Ecology Division.
Clayton K. Yeutter . . . former Secretary of the U.S. Department
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
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
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
RECOMBINANT BOVINE GROWTH HORMONE. The
GAO Office found "NO CONFLICTING FINANCIAL INTERESTS WITH
APPROVAL" and only "one minor deviation from now superseded
regulations." (Quotations are from the 1994
In the video "Agriculture is About to Get Very Small,"
Vice-President of Marketing, Research and
Development for Agribank, outlines how it is almost inevitable
the not too distant future agriculture will be
dominated by three megacomplexes who will in turn have alliances
contract producers. The only exception to that, he
notes "is the poultry industry where we see evidence that
farmers are `pushing back.'"
There is, he continues, "large concern on the part of poultry
that they are not getting a fair shake from their
processors. One has to question whether or not they just might
decades ahead of their peers who don't understand
what the whole relationships issue with processors\integrators
John Morrison, 58, who for the past six years was the Executive
of the National Contract Poultry Growers
Association and the President of the National Contract Growers
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
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
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
On Sunday, September 6 , John Morrison died suddenly of an apparent
attack at his home in Dubberly, Louisiana.He is survived by his
Judi of Dubberly, LA; two daughters Johnna Elzen of
Colliersville, TN and Jennifer Graham of Memphis, TN; two stepsons
Kurk and Alex Kurk of Dubberly, and four
grandchildren, Beau Adam Bernard, Cameron Bernard, Lacey Bernard,
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
Growers Institute, PO Box 780, Minden, LA 71055 in lieu of flowers.
Morrison's home address is 160 Pierce Ln,
Dubberly, LA 71024.