The
AGRIBUSINESS Issue #3

EXAMINER
September 17, 1998

"Monitoring Corporate Agribusiness From a Public Interest Perspective


LADY JUSTICE LIVES !!!!

Michael Andreas, 49, on leave as executive vice president of ADM;
Terrance Wilson, 60, retired head of ADM's
corn-processing unit; and former ADM biochemist Mark Whitacre, 41 have
been convicted by a Chicago federal jury of
conspiring with competitors to fix the price of the feed additive
lysine.

They face a maximum three-year prison sentence and at least a $350,000
fine.

"This was a crime of greed -- a crime by an extremely large corporation
that wanted to make even more money at the
expense of their customers," U.S. Attorney Scott Lassar told the
Associated Press..

After hearing six weeks of testimony, the U.S. District Court jury
deliberated four days before returning the guilty
verdicts. Andreas is the son of Dwayne O. Andreas, the long-time
"friend" of the politically powerful and chairman and
founder of ADM, "Supermarkup to the World," headquartered in Decatur,
Illinois. In 1995, the company itself pleaded
guilty to price-fixing involving lysine and another substance, citric
acid. It paid a $100 million fine, the largest in U.S.
history.

Michael Andreas' attorney, John Bray, throughout the trial continually
reminded the jury that it is legal for competitors to
exchange information about prices and quantities. In his closing
arguments, Bray showed the jury several snippets of tape
transcripts, culled from over 200 hours of audio and video tape, in
which Andreas repeatedly said ADM "doesn't make
deals."The rest of the conversations with competitors, Bray said, were a
lot of "bluster and bluffing."

Nice try, Mr. Bray!

Lassar, his staff and prosecutors from the U.S. Justice Department using
the tapes and documents from ADM and
competitors, particularly the Tokyo-based Ajinomoto Co. Inc., contended
that the three ADM executives used the same
model that an ADM employee testified had been designed to fix prices for
citric acid -- a model he said was masterminded
by Wilson.

Lassar showed the jury video tape, notes and charts that he said proved
that ADM agreed that it would have a 27% share of
the world's $600 million lysine market in 1994 -- a target that he says
the company hit within tenths of a percentage point.

Reed Weingarten, Wilson's lawyer told the jury that his client met with
competitors in order to get information from a
tight-knit "Asian cartel" (as opposed to the "American cartel"?) that
had controlled the lysine market for years. He said
Wilson may have offered information about prices and production and
sales volumes, but said that on purpose much of that
information was incorrect.

"This is not Business Ethics 101. This is how you deal in the real
world," Weingarten said. "That's how Dwayne Andreas
told Terry Wilson to do business."

BLATANT BIOPIRACY DOCUMENTED

In an open letter to the World Trade Organization's (WTO) Council for
Trade-Related
Aspects of Intellectual Property (TRIPs), the Rural Advancement Fund
International (RAFI) charges it has documented
some 147 examples of possible biopiracy involving the misappropriation
of 124 farmers' varieties from 43 countries.

RAFI declares that the patent offices of six industrialized countries
are encouraging biopiracy through the granting improper
monopolies. Most of the 147 claims have been made by public sector
breeding institutes and most of the abuses have taken
place in Australia, however, the US, New Zealand, Spain, Israel, and
Italy have also
accepted wrongful claims.

The 147 cases of possible biopiracy were included in a report released
by RAFI (Winnipeg, Canada) and HSCA
(Bairnsdale, Australia) and are described, with graphic examples, the
biggest scandal in seven decades of intellectual
property "protection" of plant varieties. RAFI is asking governments to
review the patent and patent-like plant breeders
rights claims.

RAFI and Heritage Seed Curators Australia (HSCA) currently are
presenting a roster of the 147 "dubious" plant variety
claims to challenge the WTO's edict that countries must grant
intellectual property "protection" over living plant varieties.
The WTO is presently meeting in Geneva to discuss procedures for
reviewing the controversial clause in 1999. But RAFI
now says "the question shouldn't be `What the WTO is going to do about
plant breeders rights?' rather, it is `What are the
WTO and the various intergovernmental `patent' conventions going to do
about plant breeders wrongs?'"

The action call is based upon a nine month study. 80% of the 147 cases
identified relate to Australian breeders; but the
study also points to a widening gyre of problems in other industrialized
countries. RAFI's Edward Hammond, the
principal RAFI researcher on the study, says "We've put the information
out there and the problems are undeniable, now
it's up to governments and UN authorities to act." Bill Hankin,
Executive Director of HSCA agrees, "The Australian
Government is fully aware that rule violations have occurred. Already,
five claims have been abandoned when breeders
were confronted with the evidence."

If the plant breeders rights offices in question don't agree to an
immediate investigation, the 43 countries who have been
pirated may feel they have no choice but to impose a plant germplasm
embargo. "The predator countries want tropical and
subtropical germplasm," Hammond points out, "as regrettable as it would
be, an embargo to force renegade states to
behave might prove effective."

"Australia is one of the world's biggest importers of the Third World's
crop germplasm," Hankin advises, "We need the
world more than the world needs us. It is simply economic stupidity to
be moral isolationists when we are the net
beneficiaries of international good will!"

HSCA is a not-for-profit association of heritage seed curators based in
Bairnsdale, Victoria. HSCA is dedicated to the
conservation and sustainable use of plant genetic resources for food and
agriculture around the world. RAFI is a non-profit
international civil society organization headquartered in Canada. For
more than twenty years, RAFI has worked on the
social and economic impact of new technologies as they impact rural
societies.

For additional information see
http://www.rafi.org/pbr/.

MORE GRAPES, MORE WRATH

Once again farm labor contractors have been found in violation of farm
worker protection laws. This time a widespread
federal investigation of California's grape vineyards shows that nearly
80% of the labor contractors used by grape growers
violate farm worker protection laws, failing to meet minimum wage and
other workplace guidelines.

The violations range from not posting worker protections to using
underage and underpaid workers and having unsafe
housing and transportation.

"Nothing like this has ever been done to focus on the industry," said
George Friday Jr., acting regional administrator of the
U.S. Department of Labor's wage and hour division in San Francisco. The
Labor Department has levied $43,200in civil
penalties and awarded $39,654 in back pay to 369 workers as a result of
its first in-depth inspection of the nation's wine
producing business.

The Labor Department focused on California because it provides the best
snapshot of the grape growing industry, leading
all states with 8,012 vineyards and $2.1 billion in annual receipts.

The charge against the labor contractors is not a new one. Farm labor
contractors, or "crew leaders," as they are known on
the East Coast and in the Midwest, are usually persons who recruit
workers for a grower and then subsequently will often
"care for" and yet at the same time "shake down" the workers, not unlike
the manner in which pimps handle their
prostitutes.

Recognizing the abuses of farm labor contractors the federal government
has sought to regulate their behavior for over the
past 35 years, beginning with the passage of the Farm Labor Contract
Registration Act of 1963. But because it is seldom
enforced it has had only a minimal effect on the lives of farm workers.
An amended act in 1974 sought to broaden its
coverage and enforcement capabilities.

It was not until in the early 1980's, however, after negotiations
between farm workers and farmers that one of the few
consensus farm labor bills in history was enacted in 1983. The Migrant
and Seasonal Agricultural Worker Protection Act
switched emphasis from registering farm labor contractors to protecting
migrant and seasonal farm workers.

While progressively stricter regulation in recent years was expected to
diminish contractor activity it has been expanding
despite enforcement efforts indicating that more than half of all
contractors investigated are violating at least one provision
of the 1983 act. Despite criminal fines of up to $10,000 and three-year
prison terms and civil fines of $1000 per
undocumented worker, estimates indicate that many contract crews are 30%
to 60% illegal alien workers.

It was an angry Cesar Chavez, founder and long-time president of the
United Farm Workers (UFW) who once declared: "I
would rather that there be no union at all than to recognize the rotten
contractor system."

For more information on the plight of the nation's farmworkers see:
Farmworker Justice Fund, Inc.
1111 19th Street N.W., Suite 1000
Washington, DC 20036
(202) 776-1757 voice / (202) 776-1792 fax
Shelly Davis and Bruce Goldstein, Co-Directors
A national farmworker advocacy organization which provides policy
analysis and technical assistance to migrant health
centers, policy makers, researchers, and attorneys on farmworker
occupational health issues.

DID SOMEONE SAY "SPY"!!!!

London police have been accused of improperly colluding with the
McDonald's Corp. to invade the privacy of two
vegetarian activists who waged a record 314-day legal battle against the
burger giant.

In a law suit filed on September 17 in London Dave Morris and Helen
Steel, the "McLibel2," issued writs seeking damages
of up to 100,000 pounds ($168,000) from Metropolitan Police
Commissioner Paul Condon and a detective whose identity
was not made public. Morris and Steel claim police wrongfully turned
over information about them when McDonald's was
investigating British activists handing out leaflets that accused the
company of being an exploitative menace to society.

Morris and Steel were among five members of London Greenpeace, an
environmental and civil rights group, totally
unconnected to Greenpeace International, sued by McDonald's for
distributing literature critical of the chain. Three of them
apologized but Morris and Steel refused. Over the course of a
two-and-a-half year trial, the court heard from more than 100
witnesses, examined more than 40,000 documents, and generated 20,000
pages of transcripts.

Their High Court lawsuit, charges that police officers allegedly
provided McDonald's and its private investigators with the
home addresses of Morris and Steel, as well as other information about
Morris that should have been confidential.

The investigation led to a libel fight that left McDonald's embarrassed
after it won the verdict only to see the judge side with
Morris and Steel on several crucial points. Morris and Steel claim that
McDonald's head of security, Sid Nicholson, was a
former police boss who testified that he would go to his
contacts in the force if he wanted to get information about
protesters.

"This collusion between the police and a multinational corporation
against members of the public exposes the political role
of the police in ensuring the wheels of big business keep turning,"
Morris and Steel said in a statement. "It's clear that their
claim to be impartial defenders of the public is a hollow one."

"We do not know the sum total of what they gave out," said Irene
Nembhard, an attorney handling the lawsuit for the pair.
Having a lawyer on the case will be new for Morris and Steel, who had to
defend themselves for years against McDonald's
because Britain does not permit public assistance in libel suits.

For more information on McLibel2 and McDonald's see:
http://www.mcspotlight.org

WORTH NOTING (AND CONSIDERING!)

In a September 15 Washington Post editorial (". . . And the Ability to
Govern" it is appropriately noted:

"THE PRESIDENT'S ability to govern has already been affected by the
Monica Lewinsky scandal. Members of both
parties in Congress have been emboldened in dealing with him, demanding
that the administration support them on policy
positions that only weeks ago it was opposing. The theory is that, for
fear of offending those who may next sit in judgment
on him, the president will fold. He is less believed than before when he
says no. He is likewise less believed when he
announces support for an initiative. The instant question is whether he
is doing it simply to buy support in turn.

"Last week the administration endorsed a proposal by Sens. Tom Daschle
and Tom Harkin to increase farm supports. The
proposal was similar to one the Agriculture Department declined to
endorse in July. There are lots of explanations for the
change of heart. The agricultural economy has continued to decline, the
proposal itself has been modified and it is hardly
uncommon for any administration to try to help a hurting constituency as
an election approaches.

"But Mr. Clinton now has an added reason to please Messrs Daschle,
Harkin et al., and he does so at some risk to what
had been his fiscal position generally, since the amendment would be
financed by dipping into the budget surplus that he
has said should be reserved for bailing out Social Security. To that you
can now add bailing out farmers and possibly
bailing out the president himself."

GOP DEFENDS ITS FREEDOM FROM FARMING ACT

It was the day before the preceding editorial that U.S. Sen. Paul
Wellstone, D-Minn., vowed inpassionately that Democrats
will try "over and over again" to remove the cap on farm marketing loan
rates if the Congress failed to pass such
legislation. The marketing loan program allows producers of eligible
commodities to obtain a loan for operating expenses
from the U.S. Department of Agriculture using their crops as
collateral. "Commodity prices have fallen through the
floor," Wellstone said, adding farmers need some sort of safety net
during economic downturns.

The so-called "1996 Freedom to Farm" law capped loan rates at $2.50 for
a bushel of wheat, $1.89/bu for corn, $5.26/bu
for soybeans, 51.92 cents a pound for cotton and $6.50 per
hundredweight for rice.

Republicans are claiming that the marketing loan provision of the
Democratic package has is seeking to dismantle the
massive "1996 Freedom to Farm" law which allows farmers greater
flexibility in planting, but replaced traditional federal
farm subsidies with fixed and declining payments to farmers over seven
years.

In July, the U.S. Senate decisively rejected the same package of
Democratic measures, saying removing loan rate caps
wouldn't do anything to boost export demand and would distort markets
by promoting larger grain stocks in storage.

Democrats, however, believe uncapping the loan rate and extending those
loans by six months would allow farmers
additional cash flow and to hold their grain off the market longer
until prices improve.

Three days after the Wellstone speech and after the Senate again
rejected the Democrats plan backed by the Clinton
administration that would cost $5.5 billion to $7 billion, House and
Senate Republicans announced agreement to give
farmers nearly $4 billion in aid for this year's plunge in grain prices
and crop failures caused by drought and disease.
Under the GOP plan all farmers would get a 29% increase in their annual
government payments for next year to
compensate for low prices.

Democrats rightfully charge that much of the direct aid favored by
Republicans would wind up with landowners, not
farmers.

In the Republican legislation $1.5 billion would go to cover crop losses
this year, with another $657 million is earmarked
for growers in Minnesota and the Dakotas who have suffered through a
series of crop failures. An extra $75 million would
go to livestock producers. The plan is expected to be added to a 1999
agricultural spending bill that is awaiting final action
in Congress.

For additional information on current farm legislation see the National
Family Farm Coalition:
http://www.nffc.net/

HOW SOON WE FORGET

That whirring noise that you hear is probably all the grandmothers of a
previous age spinning in their graves.

Tri-Valley Growers, a San Ramon, California farm cooperative, has hit
upon a novel idea of how to jump start their canned
fruit sales with a younger generation of grocery shoppers.

Why not, they have concluded, introduce a new premium-priced line of
fruit packed in glass containers that look like
traditional Mason jars. The wide-mouthed containers filled with cling
peaches, apricots and pears are hitting, they claim, a
chord with shoppers who perceive the fruit as better than canned, but
free of the hassles associated with fresh fruit. Other
fruit packers, the Los Angeles Times reports, including Del Monte Foods
Co., have also started to woo shoppers with
premium fruit in fancy glass jars.

The genius of corporate agribusiness, what a wondrous thing to behold!

According to Ken Miller, a vice president with IDI Inc., an Edgewater,
N.J.-based design firm that crafted the ice
cream-style swirl shape for Snapple's new Whipper Snapple dairy drink
bottle, many food and beverage products are
similarly ripe for packaging innovations

"Cereal box designs stink," Miller said. "But like many industries, the
challenge for companies in an incredibly competitive
business is coming up with a functional [package] design that isn't
going to cost more than today's boxes."


A.V. Krebs Editor\Publisher
avkrebs@earthlink.net