EXAMINER                            Issue # 30        April 20, 1999

Monitoring Corporate Agribusiness From a Public Interest Perspective

A.V. Krebs

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A trio of Dow Jones Newswires stories recently added still another curious chapter to the now scandal-stained history of the nation's largest meat packer --- IBP --- already branded as a national “corporate outlaw.”

On April 7 Dow Jones transmitted a story headline "IBP Inc. Has 11.6% Thorn Apple Valley Inc. Stake."  The story went on to detail that in a Securities and Exchange filing that day "IBP said it bought 135,000 common shares between Aug. 20, 1998, and March 5,  1999, at prices ranging from 61 cents to $7.95 a share, and currently holds 714,285 shares of the Southfield, Michigan, producer and seller of meat  products."

The story also noted that Thorn Apple had filed for bankruptcy on March 5 and at various times during the months before the filing "several proposals were discussed between the parties whereby IBP would  acquire all or a portion of the company's assets, though no agreement was ever reached. If the company's assets are sold through the bankruptcy proceedings, IBP may be interested in purchasing some or all of the assets, depending upon the price and other terms under which such assets may be sold."

Just hours later, however, Dow Jones carried another story headlined  "REPEAT & CORRECT: IBP Doesn't Own Any Thorn Apple Stock." Noting that it had ran an item earlier "incorrectly" stating that "IBP purchased 135,000 Thorn Apple common shares and currently has an 11.6% stake in Thorn Apple representing 714,285 of the the company's common shares,"  the newswire went on to explain that IBP was entitled to "acquire 11.6% or about 714,285 common shares of Thorn Apple Valley Inc. upon conversion of a 6 1/2% convertible debenture dated Sept. 10, 1998, and  valued at $10 million.

"Currently IBP has no stake and holds no shares in the company, according to Gary Mickelson, IBP's manager of communications."

While attempting to assimilate these two stories still another story appeared on the Dow Jones Newswire less than week later headlined: "Some Thorn Apple Valley Pdts Declares Unfit For Consumption." The story told of how "millions of pounds of meat and poultry products produced by processor Thorn Apple Valley" had been declared unfit for human consumption by the USDA's food safety and inspection service. The action came less than three months after the company recalled 30 million pounds of frankfurters and luncheon  meats produced at its Forrest City, Arkansas., plant because of possible contamination with the listeria bacteria.

The investigation since the recall led USDA investigation to conclude that no meat and poultry products from the plant were prepared in accordance with the Federal Meat and Poultry Products Inspections Acts. "These products may contain physical, chemical and/or microbiological  contaminants that render the product adulterated and not fit for human consumption," an agency release said.  Agency officials said they are confident most of the products considered unfit are being held back. Consumers, however, are reminded to check their  refrigerators for any product bearing "EST 13529" or "EST P-13529."

Thorn Apple Valley also reportedly has approximately nine million pounds of meat and poultry products on hold in warehouses across the U.S.. Over 12 million pounds of products subject to recall were exported to Russia and South Korea. USDA officials said the appropriate international officials have been notified of the latest action.

The role of IBP in the Thorne Apple Valley story is intriguing in light of some of its recent acquisitions and problems of its own with contaminated meat.

In February for the third time in  12 months IBP, the nation's largest (and most profitable) meat packer has had to "voluntarily" recall 10,000 pounds of wholesale ground beef following  reports that it contained small particles of glass. While the recall, initiated February 6, was reported to the U.S. Department of Agriculture, the USDA did not officially announced any recall, IBP said.

In October, 1998 IBP recalled beef because of possible E. coli contamination and earlier in April recalled a meat shipment after a single package produced at a plant in Joslin, Illinois, contained the virulent strain of the bacteria.

The previous August the nation learned of the recall of 25 million pounds of Hudson Foods ground beef after 16 people in Colorado fell ill after eating patties tainted with the potentially deadly bacteria known as E. coli 0157:H7. Then came the news that IBP had bought the Hudson Foods state-of-the-art Columbus, Nebraska plant. One of Hudson's suppliers had been IBP. Later, coincidentally, after South Korea discovered e-coli in a shipment of IBP beef, IBP was banned by South Korea from shipping meat to that country; the U.S.'s third largest beef  export account.


Interestingly enough the same day that Dow Jones Newswires were reporting the Thorne Apple Valley story they were also reporting that IBP Inc. and Cargill Inc.'s Excel Corp. unit are planning for the first commercial tests of "consumer acceptance of irradiated ground beef" later this year or in early 2000.

The companies say their task will be to convince consumers of the safety of the process used to protect meat from potentially deadly bacteria. IBP and Excel, who together control 60% of the nation's beef packing industry, said they will test-market beef irradiated by a system being built at Cloverleaf Cold Storage Co. in Sioux City, Iowa.

"We've had several major customers express interest in offering the product,"IBP’s Gary Mickelson notes, "so that's contributed to our interest. It's another layer of protection." In February the USDA  approved irradiation of red meat as a way to curb food-borne illnesses.

Meat subjected to irradiation receives low-level doses of gamma rays or electron beams.

Dow Jones reports that while "scientists agree the process is safe in food . . . antinuclear groups have opposed the procedure if it involves gamma rays and some health advocates worry that using irradiation might reduce other safety techniques such as proper handling and plant sanitation. Even irradiated meat is subject to contamination if it is mishandled after  treatment."

Excel spokesman Mark Klein told Dow Jones that testing would have to be accompanied by educational material to ease people's fears about the process.

"We'll have to let people know that the technology is safe and that if  they're looking for that added measure of safety, they may very well want  to try this," he said. He also pointed out  that irradiated beef could cost slightly more  than untreated meat. Past estimates have put the added cost of irradiation to a food processor  at 3 cents to 7 cents a pound.

Lynn Phares, spokesperson for ConAgra Inc., which controls 21% of the beef packing industry, said the company has not yet  signed on to test the irradiated meat, but is exploring the option. "We are looking at all aspects of irradiated beef," she said. "We're not  ready to announce anything at all, and we're certainly not stopping other
safety initiatives."

                                                                                --- Cargill Advertisement

Speaking of Cargill, the nation's largest private corporation and the world's largest grain trader, it was making news by itself this past week, not only reporting that while benefiting from depressed prices of livestock and grain it had earned $192 million for the quarter ending February 28, up 53% from the $125 million quarter a year earlier, but also announcing that Ernest S. Micek, its chief executive officer, is stepping aside earlier than expected. Cargill's  current  president, Warren R. Staley, will succeed Micek.

Staley, an electrical engineer who rose to prominence with Cargill running the
corporation's sprawling Latin American operations, also worked for Cargill in Europe and has been part of a group of executives pushing the company to change fundamentally the way it does business. Staley, 56, is also the leading candidate to become the next chairman, but the Cargill board isn't expected to make a decision until next year.

Staley, according to the Wall Street Journal’s Scott Kilman, wants to bury Cargill's "commodity mind-set" of  focusing on high-volume, low-margin businesses. As an example of Cargill's new direction, Staley pointed to its recently formed joint venture
with crop-biotechnology giant Monsanto Co. The venture is set up to design crops to make "novel ingredients" for food companies.

Earlier this year, however, Cargill was embarrassed when its sale of its North American seed business for $650 million collapsed after the company was forced to admit that some of its seeds contain improperly obtained  genetic material.

Staley is also expected to face pressure from the younger descendants of Cargill's founding families, who are unhappy that their dividend payments have dropped in lock step with the company's three-year-long profit skid. Cargill earned $468 million on sales of $51.4 billion during the fiscal year ended May 31, 1998. Two years earlier, Cargill earned a record $902  million.

Kilman also reports that a previously undisclosed prospectus, which Cargill is having sent to a small group of investors interested in buying its 10-year notes, reveals that it recently offered to use $106 million from the sale of an equipment-leasing business to repurchase some shares from descendants of the Cargill and McMillan founding families.

In recent years Cargill has sought to offset boom-and-bust commodity-price cycles by investing throughout the agriculture sector.

While income from Cargill's export operations fell in the third quarter, in large part because Asian buyers are slashing orders for foreign goods, depressing prices of U.S. crops, reduced the amount of money that Cargill milling operations paid for corn and wheat to make everything from fuel ethanol to flour.  Likewise, Cargill's meatpacking operations are seeing their raw-material costs plunge because of depressed cattle and hog prices.

Previously Cargill had expanded its financial-services operations in the 1990s, convinced that its prowess at hedging risks in the farm-commodity markets would pay
off in the financial markets. But, according to the prospectus, the financial arm of Cargill generated a $171 million loss during the first nine months of fiscal 1999. Its traders were on the wrong side of several bets in the Eastern European financial markets when the Russian government defaulted on its debts in August 1998 and the
ruble sank.

Likewise, prior to the Russian disaster, Cargill was hit by a flood of bad mobile-home
loans forcing it to sell its Access Financial unit in May 1998 after it generated losses of $121 million on manufactured-home loans and nonprime home mortgages. After these mishaps, Cargill reports that it reduced the staff of its financial-services business by 30% and shrank the amount of money its financial traders can risk in the market by 40%.


"While the Justice Department is busy suing computer software companies for antitrust and the USDA is busy promoting free trade agreements, American farmers are being crushed by market-manipulating corporations. Think about that tomorrow morning when you sit down for breakfast. Try eating your computer software or your global trade agreements."

With the words of Linus Solberg, a pork producer from Cylinder, Iowa and some 600 other boisterous farmers from a dozen states ringing in their ears Joel Klein, an
assistant attorney general who directs the U.S Justice Department's  antitrust division, and Mike Dunn, who oversees the U.S. Agriculture Department's Grain  Inspection, Packers and Stockyards Administration, attempted to plead for patience at a St. Paul, Minnesota agrarian populist rally while the government scrutinizes increasing market concentration in agribusiness.

"I didn't come to Minnesota to make any friends or to compliment you on the job you're doing in Washington," Solberg told Klein and Dunn at the rally in a hotel next to the South St. Paul stockyards last Sunday.

Billed as the "Midwest Farm Price Crisis Forum"  the rally was organized by Democratic Sens. Paul  Wellstone of Minnesota and Tom Harkin of Iowa. "This is the first time ... that we've ever gotten the head of the antitrust division of the Department of Justice to come out and listen to  farmers," Harkin said.

"I don't know when big is too big, or when too much share of the market is too much,"  Wellstone added, "but what I do know, and I hate seeing this, is that conglomerates have muscled their way to the dinner table and exercise raw power there."

Farmers from Texas, Colorado, Ohio, the Dakotas, Illinois, Indiana, Iowa, Kansas, Nebraska, Wisconsin and Minnesota waving placards reading "It's Time to Act!" and "Protect Independent  Farmers," loudly cheered as speaker after speaker demanded that large corporations not be allowed to monopolize the food-processing industry. Many farmers also wore buttons carrying the slogan, "Enforce the Laws, Stop the Excuses," and a banner on the wall read "Corporate Hall of Shame" and listed corporate agribusinesses such as Archer Daniels Midland ("Supermarkup to the World"), Cargill and ConAgra.

"Now, USDA, I don't want to pick on you too much, but it wouldn't even be fair to say you stood by as an agency and let this happen," observed Rhonda Perry, a farmer from Howard County, Missouri. "Millions of taxpayer dollars were used to help finance this concentration in the form of  corporate welfare, in the form of guaranteed loans to hog factories. We predicted this. It's no surprise to the people in this audience. It's only a surprise, apparently, to the people in this administration."

Perry's words were echoed by Mike Callicrate, a smalll St. Francis, Kansas feed lot operator.

"Make no mistake, these ranchers and farmers have been sold out. They are guilty of nothing but believing in the economic and legal system that has failed them. Because of your failures, they are saddled with the highest cost of doing business in the world, while at the same time, they are being cheated out of a fair price for their livestock and crops by the big multi-national food processing corporations --- while those in government like yourselves stand by and watch.

"All the age old theories," Callicrate told Klein and Dunn, "about `economies of  scale,`greater efficiencies,' etc. proffered as excuses for concentration and this farm crisis, certainly give the lie to those on the land who are the most productive and efficient producers in the world. The fault is not with them, but with the multi-national corporations which are stealing from them. They, the corporations, are the powers behind restrictive new laws, and over the years, they have convinced you to ignore current anti-trust laws, the Packers and Stockyards Act being only one example."

To the point and succinctly Dr. John Helmuth, an Adjunct Associate professor and Assistant Director, Center for Agriculture and Rural Development at Iowa State University told Klein and Dunn:

"Economist's use the term `vertical integration' to refer to companies' buying different companies in the chain of distribution from real producers, such as farmers and ranchers, to final consumers. You each know exactly what the term means.  We are often told that Vertical Integration increases efficiency. Therefore it is good. Think. Please think.

"Each time a company buys a supplier or a customer one transaction point is removed from the great American market place. Duh!  Wake up Klein. Wake up Dunn," Helmuth extorted the two government officials

"If you allow enough transaction points to be removed from the market place, we will not have capitalism anymore. We will have centralized control. Another term for that is Communism. I know from experience."

Highlighting their concerns about corporate concentration farmers at the rally singled out Cargill, the world's largest grain trader, announced plans to buy the worldwide grain commodity operations of second-ranked Continental Grain Co. ( the Justice Department is currently reportedly reviewing the proposed merger);  DeKalb Genetics Corp. $2.3 billion merger with Monsanto; Monsanto's acquisition of Scott and the Mississippi-based Delta & Pine Land Co., a leading  producer of cotton seed, for $1.9 billion, and chemical giant DuPont Co. announced plans to acquire Pioneer Hi-Bred International Inc., the world's largest seed corn company for $7.7 billion.


For his part the Department of Justice's Joel Klein told the St. Paul farmers' rally "I want to be straight with you and I want to listen. I know you want action ... but I've got to know the facts. And when we have the facts, we are not afraid to act."

Due to the fact that most of the current anti-trust enforcement is based on economic theories of "efficiency" and "price-fixing" formulas, observers believe that the Department of Justice is unlikely to heed family farmers call for action in blocking the increasing concentration that is taking place today in agriculture.

Jon Lauck, a member of the University of Minnesota Law School Class of 2000 and Editor-in-Chief, Minnesota Journal of Global Trade, in a recent astute study, "Toward An Agrarian Antitrust: A New Direction For Agricultural Law," however, takes issue with such economic theories as being the cornerstone of anti-trust action.

"Courts have often recognized the non-economic considerations inherent in antitrust law.  In some of the earliest Sherman Act jurisprudence, the Supreme Court worried about `driving out of business the small dealers and worthy men whose lives have been spent therein.' Perhaps most famously, in the Alcoa case of the 1940s, Judge Learned Hand observed that that `[i]t is possible, because of its indirect social or moral effect, to prefer a system of small producers, each dependent for his success upon his own skill and character, to one in which the great mass of those engaged must accept the direction of a few.'

"The Warren Court's interpretation of the Celler-Kefauver amendment of 1950," Lauck continues, "also upheld the non-economic policy rationale of the statute.  In Brown Shoe Co. v. United States, the Court noted the importance of Congressional goals such as economic `decentralization' and the `maintenance of fragmented industries and markets,' despite the potential for higher costs and prices. The failure to weigh non-economic factors is an especially troublesome lapse when considering agriculture."

Lauck concludes, "Farmers actively sought antimonopoly legislation in the late nineteenth century and have continued to support its application to the present day.  Due to the judicial embrace of certain economic theories within recent decades, however, the antitrust laws have failed to meet their expectations.  More recent developments in the interpretation of the antitrust laws offer the opportunity to more completely satisfy farmer expectations.  Greater judicial recognition of the limits of economic theory and existence of power imbalances within markets, especially when considered in light of legislative policies designed to promote the bargaining power of farmers, presents the opportunity to establish an agrarian-specific antitrust analysis."


As if to underscore the concerns of those farmers who rallied in St. Paul, Minnesota Sunday and loudly voiced their anger to the Department of Justice and the USDA over the increasing concentration of corporate power in agribusiness, General Mills, the manufacturers of "Cheerios," "Wheaties" and "Lucky Charms," last week announced that it will be increasing its cereals prices by 2.5%.

Seeking to rationalize its price increase the company said that while the average retail price of a box of its cereals is "approximately" the same as it was in 1993, the average consumer price for food consumed at home during the same period has increased           about three percent annually.

The price increase was first disclosed when an analyst at the BT Alex.Brown securities firm raised his rating on General Mills stock, citing the price increase. It was later confirmed in a statement released by General Mills. Associated Press reports that it was not immediately clear whether the increase would spread throughout the ndustry.

Bet on it!!!!

Currently Kellogg is still the nation's biggest producer of ready-to-eat cereal, however, its share of the U.S. cereal market has dropped to 32% from 41.4% a decade ago, according to Information Resources Inc. (IRI), a research firm in Chicago, with General Mills closing in on Kellogg's lead.

At the present time four firms control 88.5% of the U.S. cereal market. The U.S. market share is Kellogg: 32.0%; General Mills: 31.3%; Philip Morris (General Foods - Post): 16.4%; Quaker Oats: 8.8%; Store brands: 7.8%, and Other: 3.7%.

Under the Department of Justice guidelines, any market with a Herfindahl-Hirschman Index ("HHI") above 1,800 is considered highly concentrated.

The HHI is a way to measure concentration.It has more or less replaced the four firm concentration ratio. It is calculated by taking the sum of the square of market shares. A monopoly is 100 squared, or 10,000.  Ten firms, each with 10 percent, would be 10 times 10 = 1,000. A duopoly with equal shares would be 50 times 50  = 5,000. Because small shares don't add up to much, even when squared, it is pretty safe to ignore them.

The Department of Justice Antitrust guidelines consider an industry with an HHI of 1,000 or less to be competitive, and an HHI of 1,800 or more to be pretty concentrated.  An increase in the HHI of 100 is considered important enough to trigger a merger review.

The concentration index for the cereal industry, based on the HHI formula, in 1996 was 2084. Today it is 2350.09.
The cereal business in the U.S. is an $7 billion annual market. Every one percentage point in market shares  is equal to $80 million in annual revenues. .

The U.S. cereal market is also probably THE most profitable sector of corporate agribusiness. The average  annual return on equity (profitability) from 1993-1997 for the four largest cereal manufacturers was:  Quaker Oats 28.9%, Kellogg's 24%, General Mills 25.2%, and Philip Morris 22%.

The 1993-1997 average median for the food, beverage and tobacco processing industry was 10.1%, for all U.S. industry it was 10.5%,  while for U.S. agriculture a similar period's annual average was 1.98%.


LIFE is not all KIX for rural America in 19-97. While family farmers are getting SMACKS from corporate agribusiness, the CAP’N CRUNCH’s of the cereal industry continue to engage in a VARIETY PAK of TRIX. Meanwhile, family farmers no longer have a HEALTHY CHOICE when COMPLETEly up against the BASIC FOUR of the cereal industry --- QUAKER OATS, GENERAL MILLS, KELLOGG’s, POST.

Family farmers and consumers want more than COCOA PEBBLES, LUCKY CHARMS and Coupons, Coupons. As consumers want JUST RIGHT prices, family farmers also want a 100% BRAN new, democratic, economic policy that gives them fair and equitable RICE CHEX, CORN CHEX, WHEAT CHEX for their TOTAL cost of production.


Interstate Bakeries Corp., baker of "Wonder" and other brands of white bread and of "Hostess" snack cakes has been accused by the U.S. Department of Justice, according to Bloomberg News, of flouting a consent decree that allowed it in 1995 to purchase Continental Baking Company from Ralston Purina.

Although the Dof J initially opposed the sale due to the fact that Interstate and Continental were two of the three largest bakers of white bread in the U.S. a consent  decree was agreed upon after the government accused the Kansas City, Missouri.-based Interstate of trying to revoke a license that it had assigned in 1986 to Four-S Baking Co. that let Four-S produce and sell "Weber's" bread in Southern California

The consent decree required that the license be perpetual and royalty-free, the department said, and was entered as a court order requiring Interstate to sell either its own or Continental's white bread brands in five markets. The Justice Department charged that Interstate has demanded that Four-S, now owned by Bimbo Bakeries USA Inc., return the formulas and production processes for baking "Weber's" bread.

Interstate was also accused of threatening to sue Four-S. Interstate officials were not available for comment. The DofJ sought an order from a federal judge in Chicago that would fine Interstate each day it is in violation of any decision the court enters to force compliance with the consent decree.


In the days and weeks immediately prior to the World Trade Organization's (WTO) ruling that the European Union (EU) had "unfairly" restricted bananas produced by Chiquita Brands International and Dole Foods both company’s top executives --- Carl H. Lindner and David Murdock --- purchased large blocks of stock in their own company.

According to the Dole's filings with the Securities and Exchange Commission (SEC) Murdock, who already is the Westlake Village, California-based fresh produce company's largest stockholder, bought 1.44 million shares worth $43.7 million, between March 9 and April 6, the day the WTO ruled that the U.S. could impose annual sanctions on EU goods. The purchases brought his holdings to 12.5 million shares.

Prior to Murdock's purchase, in March, Chiquita Chairman and Chief Executive Lindner boosted his stake in the Cincinnati-based company by 1.7 million shares.

In what has become a bitter trade fight involving bananas, the subjecting a long list of $191 million worth of European products and goods to a 100% tariffs. U.S. Trade Representative Charlene Barshefsky had asked for $520 million, saying the amount represented the Clinton administration's estimate of the amount of "harm" done annually to U.S.-based banana companies --- Chiquita, Dole Foods and Del Monte -- which now controls 64% of the world's banana market, in terms of lost sales in Europe.

As readers of the AGRIBUSINESS EXAMINER have read, the facts in the matter, however, show that there are no U.S. jobs at stake, that there is no danger of a further imbalance of trade, and that there is no economic damage about to befall the U.S. This so-called "banana war" is simply a case of Clinton & Co. seeking to protect the financial interests of Lindner and a single multinational, Chiquita, which has 26% of the world trade in bananas, as opposed to the interests of thousands of small banana farmers in the Eastern Caribbean and in Jamaica.

Bloomberg News Service reported in December, 1998  that Dole Foods Co., said that it actually had gained market share under EU import rules and would thrive no matter how the dispute was resolved. "We feel like we're pretty well-positioned," said John Tate, a spokesman for Dole. "No matter how it comes out, we'll find a way to work productively in that environment."

Thus, it has been in the sole interest of Lindner that Clinton & Co. decided to do battle with the European Union countries. One understands clearly why the Clinton Administration took such a stand when reading a March 31, 1997 report by Michael Weisskoff in Time Magazine when he reports that on April 12, 1996, the day after then U.S Trade Representative Mickey Kantor (now a member of the board of directors for the Monsanto Co.) asked the WTO to examine Chiquita's grievance, Lindner and his top executives began funneling more than $500,000 to Clinton in about two dozen states from Florida to California.

Lindner, 78, head of Chiquita, is worth $665 million, according to Forbes Magazine,  and also heads up American Financial Group, a property and casualty insurance company based in Cincinnati with $15.7 billion dollars in assets in 1997.

Murdock, 75, who has headed Dole Foods for 14 years and whose wealth is estimated by Forbes at $990 million is a familiar figure in corporate agribusiness.

In 1987, 49% of the stock in IBP was sold to the "public" by Occidental Petroleum. Prior to its takeover by Occidental in 1981, IBP's corporate power was solidly interlocked in a labyrinth of economic decision-making and corporate ownership. The largest single block of the company's stock (18%) was held by the California-based Pacific Holding Corp. Pacific Holding Corp., at the time was a wholly-owned private company held by Murdock, who had previously made millions off a multitude of real estate deals, acquiring a vast fortune by also taking over firms with undervalued assets.

When Occidental bought IBP for $800 million, Murdock became the $15.8 billion petroleum conglomerate's single largest stockholder. In fact, as IBP's leadership spoke of the "benefits" that the company's thousands of stockholders would derive from the Oxy sale, three corporate executives Robert L. Peterson, Dale C. Tinstman, and Perry V. Haines collected a reported $5.6 million while Murdock reportedly made a $35.2 million gain from the sale.

In 1984 after a feud with long-time friend the late Oxy chairman Armand Hammer, Murdock sold his holdings to Hammer for a $100 million plus profit. Subsequently another Murdock enterprise, Flexi-Van Corp. had merged with Castle & Cooke, the giant California agribusiness firm which then became the owner of Dole food products and other vast agribusiness and real estate holdings in Hawaii and California, including the Bud Antle Corp., one of the world's largest grower-shippers of lettuce.

Later, Castle & Cooke would become a private and essentially real estate and home building corporation with large holdings in the Hawaiian Islands while Dole Foods would become a public corporation.  Both firms, however, would be primarily owned and under the direction of Murdock.


"But what is not easy to explain or understand is engagement in a world in which America is the biggest beneficiary and the sole superpower, with multiple secondary powers and no immediately visible threat, but with many little threats and an abstract globalization system to maintain. But this is the world we have. And in this world we can't afford either to retreat into isolation or to wait around for some smaller adversary to become a life-threatening foe.

"As I have noted before, globalization and economic integration will act, to some degree, as a restraint on those states that are plugged into the system and dependent upon the electronic herd. It's true that no two countries that both have a McDonald's have ever fought a war since they each got their McDonald's. (I call this the Golden Arches Theory of Conflict Prevention.) But globalization does not end geopolitics -- the enduring quest for power, the fear of neighbors, the tug of history. What globalization does is simply put a different frame around geopolitics, a frame that raises the costs of war but cannot eliminate it.

"That is why sustainable globalization still requires a stable, geopolitical power structure, which simply cannot be maintained without the active involvement of           the United States. All the technologies that Silicon Valley is designing to carry digital voices, videos and data around the world, all the trade and financial integration it is promoting through its innovations and all the wealth this is generating, are happening in a world stabilized by a benign superpower, with its capital in Washington, D.C.

"The hidden hand of the market will never work without a hidden fist -- McDonald's cannot flourish without McDonnell Douglas, the builder of the F-15. And the hidden fist that keeps the world safe for Silicon Valley's technologies is called the United States Army, Air Force, Navy and Marine Corps."

---  "A Manifesto for the Fast World,"  by Thomas L. Friedman, New York Times Magazine,  March 28, 1999


Who will control the nation's and the world's food supply in the coming millennium?

What will happen to family farms, farm and food workers and our rural communities as agriculture and our food system are threatened to become more globalized, centrally controlled and highly industrialized?

How safe are genetically modified organisms (GMO) in our food and what economic, environmental, health and safety risks do they present to the family farmer and the consumer?

What role will local sustainable agriculture food systems play in an increasingly globalized industrial agriculture and food system?

These and related subjects will be discussed and responded to during an all-day April 29, 1999 conference, "Launching the People's Millennium, Challenging Corporate Control of Food & Agriculture," sponsored by the Alliance for Democracy as
a prelude to the movement's four-day national convention  (April 29-May 3) at the College Inn Conference Center, University of Colorado at Boulder, Boulder, Colorado.

"In attempting to deify their own myopic view of efficiency," AfD National Council member A.V. Krebs, the conference's program coordinator points out, "corporate agribusiness has brought family farming, the democratic control of the people's
food supply, and a wholesome and healthy natural environment to the brink of a crisis that unless recognized, confronted and reversed will inevitably lead to a worldwide economic, political, social and environmental disaster unlike any seen in human history. This one-day conference will seek to show how people can challenge this corporate agribusiness view."

In an effort to take back the control and responsibility for the intrinsic safety of our food supply, free from contaminating and health-threatening toxics, the conference will focus on the Food Circles approach as offering a practical, hands-on, sensible, grass roots means of working for and attaining a sustainable food system.

Ben Kjelshus, the AfD's Food and Agriculture Task Force Coordinator, explains:
"Food Circles, as an alternative to the current global, faulty, environmentally and socially destructive and unsustainable food system, links consumers, farmers, retailers, environmentalists and other concerned citizens in a creative and comprehensive effort to deal with the critical problems of our present food system. Food Circles are a key to developing an integrated, decentralized, sustainable food system.

"They and other grass roots projects working for a sustainable food system are vehicles with considerable potential for effecting social change," he adds.

The all-day conference, beginning at 8:30 AM will be highlighted by three panels, composed of nationally and internationally prominent agriculture and food specialists and activists, and a series of subject-related afternoon workshops

The objective of the workshops will be to draft recommendations for a "Boulder Agrarian Populist Agenda" and prepare recommendations for presentation and deliberation at the Alliance for Democracy Third Annual National Convention 
scheduled to begin later the evening of April 29.

The Alliance for Democracy, currently with over 50 local chapters and 2000 members, is a three-year old national populist movement that seeks to end the domination of the nation's economy, government, culture, media and environment by large  corporations. Believing that piecemeal reform has been rendered ineffective the AfD has united in examining ways in which various economic interests either enhance or harm the health of democracy, focusing its resources on creating basic change.

For additional registration information contact:
Alliance for Democracy
P.O. Box 683
Lincoln, Mass.  01773     (781) 259-9395