EXAMINER                                                Issue # 63       January 27, 2000

Monitoring Corporate Agribusiness From a Public Interest Perspective

A.V. Krebs


Once again the Miami Group of governments (US, Canada, Uruguay, Chile, Argentina and Australia) are poised to disregard the concerns of the rest of the world's nations and weaken a Biosafety Protocol agreement that would set out rules governing international movement of genetically engineered organisms (GEO) plants, animals, microbes) and their products.

Meeting in Montreal as we speak Canada, Uruguay, Chile, Argentina and Australia want a protocol to promote trade interests and minimize environmental safeguards.

Just as it was last year in Cartagena, Colombia, the United States, by virtue of the fact that  the U.S.Senate failed to ratify the 1992 U.N. Convention on Biological Diversity, is not officially part of the talks. However, just as it did in Cartagena, it has worked diligently behind the scenes in Montreal through the Miami Group to protect its interests and is being denounced by European, Asian and developing countries along with world-wide non-government organizations (NGO's) as the conference's  "bully."

On Tuesday representatives of 15 NGO's from those six countries stalling the Protocol spoke out declaring that the Protocol must protect biodiversity and human health, not promote trade."Our governments are obstructing a strong agreement," said Jorge Rulli of Argentina.  "We're here to say that the people of our countries want an agreement that really protects people and the environment."

Led by the U.S., the Miami Group is seeking to make the agreement subservient to World Trade Organizations rules, to exclude the precautionary principle and to exclude GEOs used as food and agricultural products, when exported. Such provisions would render the Biosafety Protocol useless in protecting the environment and preserving the diversity of life on this planet.

"We must be safe rather than sorry with organisms that, once released, cannot be returned to the laboratory and go on reproducing themselves eternally." said Bob Phelps from Australia. "Our government must ensure that the precautionary principle is central to the Biosafety Protocol. They must not play roulette with the environment and public health. We are proud to be part of this group of citizen groups which have called for a REAL environmental Biosafety Protocol," he said.

The Miami Group countries say human health and socio-economic impacts would not give countries the right to ban GE imports under this agreement. If the Miami Group prevails exporting nations and their corporations would have no liability under the Protocol for the damage that a product may cause in a receiving country.

Prior to the opening of the Montreal conference where representatives from 138 nations began week-long Protocol discussions, NGO activists opposing genetically engineered foods released a statement signed on to by 25 organizations, including Greenpeace and Friends of the Earth. some

In their statement the NGO's declared that, "despite being a non-party to the Convention, the United States government acts to subordinate this Protocol to international trade rules, such as those of the World Trade Organization.  We offer our support to the vast majority of countries which, by ratifying the Convention, are committed to upholding environmental values.  Even a member of the U.S. Congress recently observed that `when the health and safety of consumers and the environment is the price, free trade is just too expensive.'  These negotiations are not primarily about trade; they concern biodiversity and the life support systems for the world's people.  Protection of biological diversity is an imperative, not a luxury or an afterthought."

The NGO's point out that "we expect governments to reach a final agreement on a Biosafety Protocol and ensure that the Protocol reaffirms and reinforces the goals of the Convention on Biological Diversity by establishing rules to protect biodiversity.  It would be irresponsible of our governments, our formal representatives, to ignore the obligations to protect our biological heritage and global food security undertaken when they ratified the Convention.

"A minority of countries, only interested in protecting their industries' commercial investments in GMOs, stalled the Biosafety Protocol in Cartagena last year.  These countries must not be allowed to obstruct our work again this week.  Unfortunately, we do not see any change in their intentions."

On Friday, January 28th, the countries present in Montreal are expected to adopt a Biosafety Protocol which will set out the rules governing international movement of genetically engineered organisms. The majority of countries now in Montreal want a strong Protocol that includes the right of countries to refuse GMOs that would adversely impact their environment. It is the U.S. which has as its goal to thwart such efforts aimed at adopting a strong Protocol and has shown no indication that the environment takes precedence over corporate profits.

Supporters of a strong Biosafety Protocol are being urged to call or Fax Frank E. Loy, Under Secretary of State for Global Affairs, (202)647-6240 (phone) and (202)647-0753 (fax) demanding that the U.S. put our environment first in the Montreal negotiations and that the U.S. stop bullying the rest of the world into accepting the GMOs they don't want!


When 770 business leaders in 143 emerging global market economies were asked to rank companies from 19 exporting countries on whether they were likely to bribe to win or retain business U.S firms fared poorly, but when they were asked "what governments do you principally associate with unfair business practices --- in addition to, or instead of bribery" the U.S. by a clear majority (61%) led the rest of the world.

The results of the International Bribe Payers Survey was recently announced by Transparency International (TI) based on in-depth interviews by the Gallup International Association.

On a scale of ten, zero being very high levels of bribery and ten being negligible bribery, the U.S., despite operating under the tough constraints of the Foreign Corrupt Practices Act (FCPA), however weekly enforced through criminal prosecutions, registered a 6.2, tied with Germany. Chinese companies ranked the lowest with 3.1 while Swedish corporations ranked "cleanest" with 8.3.

When it came, however, to who they saw as corporations most likely to use their government to secure unfair business advantages for themselves, the respondents put U.S. diplomatic and\or political pressures, followed by commercial pressure (dumping, pricing issues), financial pressure (taxes, tariffs, custom barriers), tied aid, and favors or gifts at the top of the list.

In addition, many of the respondents, particularly in Europe, believe that their bribery of foreign officials is justifiable if only to overcome the use of this "unfair" diplomatic and\or political pressure exercised by the U.S. government acting on behalf of the U.S.-based corporations, i.e., the U.S.'s promotion of Carl O. Lindner's "banana war" with western European nations (See Issue #18 ).

In a devastating January 24 New Straits Times opinion piece the Malaysian publication notes that "it comes as no surprise that Transparency International ranks the United States Government, by a wide margin, as a country most likely to use pressures to gain unfair business advantage for its companies. What we find perplexing is why has it taken so long for international organizations like TI, supposedly devoted to curb corruption, to recognize the imperialistic ways of Uncle Sam.

"Perhaps TI, like most Western organizations, has been deeply suffused with the viewpoints of the U.S. and hence, blinded to its bullying ways. But those in the developing countries have long known that the U.S., through its status as the world's sole superpower, dollar, media and armies of scientists, financial/business executives and entrepreneurs, enjoys imperial status without the headache of keeping an empire. It has browbeaten and arm-twisted governments, organized coups, funded the opposition in countries such as Iraq and fought wars by proxy --- all in the name of keeping democracy alive or so it would like the world to believe.

"But the truth," the publication continues, "is that the U.S. Government has rendered itself as the primary vehicle for the maintenance of its economic power and the wealth of its rich, such as Bill Gates, Warren Buffet and Paul Allen whose combined wealth of US $156 billion amounts to more than the Gross National Product of the poorest 43 nations in the world."

The opinion piece points out that in Peter Gowan's The Global Gamble (London; Verso 1999) he shows how the Dollar-Wall Street regime, which emerged in the 70s, is used to maintain the power of U.S. wealth as well as to engineer and manipulate the world economy to the advantage of mainly U.S.-based transnational corporations.

"Under the neo-liberal economic doctrine and global institutional frameworks such as the World Trade Organization and International Monetary Fund, the U.S. has ensured that these will entrench its political and economic hegemony. Just recall the Uruguay Round negotiations where the U.S. trade representative was advised by the likes of Du Pont, Monsanto, Cargill and Pfizer who then drafted the U.S. interests under the guise of benefiting mankind."

The Strait Times also notes that "organizations like TI should look at the exploitation of the WTO's patent regime by the U.S. and her allies in the Marrakesh Agreement on TRIPs (Trade-Related Aspects of Intellectual Property Rights). The globalization of the patent regime will deprive the developing countries of the option of reverse engineering (as was done by Japan, Taiwan and Korea in their early industrialized days) and force them to depend permanently for technology on MNCs, which are mostly American, controlling more than 80% of the world's patents. The ridiculous patent period of 20 years in the agreement, too, will perpetuate the dependence of poor countries on the MNCs for technology. These provisions are far from transparent.

"Nor did the organizations dedicated to transparency and justice," the opinion piece concludes,  "decry the passing of Article 1303 of the U.S. Trade Act which effectively ensures that in case of conflict between GATT-WTO rules and American law, the latter will prevail. But then, should the world be unduly shocked by the American violation of internationally-agreed rules? The U.S. has long flexed its muscles to do what it does not want other countries to do. And as Malaysia knows too well, the U.S. will raise the human rights bogey as manoeuvres (sic) against nations which refuse to bow to its pressures."

Once again Archer Daniels Midland (ADM) has been taken to the government's woodshed and slapped with a fine.

This time ADM, "Supermarkup to the World," has agreed  pay $650,000 in  penalties for safety and health violations at its rail car repair plant in  Decatur, Illinois, in a settlement with the Occupational Safety and Health  Administration (OSHA). In December, 1998 OSHA cited the company for violating confined spaces  and respiratory protection standards and for inadequate storage of flammable and combustible materials, imposing on it at the time an initial $1.6-million overall penalty.

Charged with 20 "willful," violations, meaning they were committed with  "intentional disregard" or "plain indifference" to safety regulations, the corporation assigned workers, according to OSHA, to paint the inside of rail tank cars without providing the lifeline equipment needed to evacuate them in an emergency. OSHA came to investigate the charges after an ADM employee complaint that safety rules were being disregarded.

"Because the paint was flammable and potentially explosive, the danger of an accident was high," said U.S.Secretary of Labor Alexis M. Herman.No one was injured in the incidents she cited.
ADM is no stranger to OSHA, however, as the government agency has cited ADM frequently for violating rules that protect workers in confined spaces. Four ADM employees have died and six have been hospitalized in confined-space incidents at the company's Decatur plant since 1993, OSHA said. In 1996, ADM agreed to a settlement with OSHA, paying $690,500 and promising to correct workplace hazards.

In respect to the recent OSHA penalty the government agency said that ADM has also made concessions to form a vice president of safety and health post to oversee  company working conditions. Although ADM,  headquartered in Decatur, employs about 45 workers at the plant, it has yet to correct all the working conditions in its rail yards, but OSHA claims the company has remedied the most dangerous  cases.

OSHA's standard on confined spaces requires attendants to monitor and protect  employees in small places. OSHA said the inspection revealed employees working in the rail cars wore harnesses, but no attached retrieval lines.

In recent years ADM has plead guilty to conspiring with competitors to fix domestic and world prices of lysine and citric acid, an organic acid used in various foods, and paid $100 million in fines, $70 million in fines for fixing lysine prices and $30 million for doing the same in citric acid. The Justice Dept. action also resolved all of the criminal investigations of the Company, including the accusation  that ADM used cash payments and other illicit means to steal technology from competitors. Including civil suits related to the price-fixing matter, ADM has already paid a total of over $200 million in fines and civil settlements.

In addition, Michael Andreas, 49, former executive vice president of ADM; Terrance Wilson, 60, retired head of ADM's corn-processing unit; and former ADM biochemist Whitacre, 42 were convicted by a Chicago federal jury of conspiring with competitors to fix the price of the feed additive lysine. In addition to currently serving time in prison they were each fined $350,000.  Andreas is the son of Dwayne O. Andreas, the long-time "friend" of the politically powerful and former chairman and founder of ADM.


While the the purchase of Continental Grain's grain merchandising division by Cargill, the nation's largest private corporation, remains in legal limbo it appears that Smithfield Foods proposed acquisition of Murphy Family Farms and Tyson Foods hog production unit are in serious doo-doo. (See Issue #46)

Recently Tyson Foods  announced that it was unable to reach a definitive agreement with Smithfield Foods and thus it appears that business arrangement may be dead.

Meanwhile, Missouri's Attorney General Jay Nixon is legally seeking to block the Smithfield Foods acquisition of Murphy Family Farms.  Nixon's suit, filed in a Missouri state court, is based on the state's corporate farming ban rather than on antitrust law.  Nixon is seeking to have Smithfield's contracts with Murphy Farms, which has significant productions facilities in Missouri, considered as "ownership" of hogs, and thus illegal.

Iowa, Nebraska and Minnesota, have corporate farming bans which would also prohibit Smithfield pork production, but to date have failed to attempt to block the acquisition.

Meanwhile, the Organization for Competitive Marketing's (OCM) Jon Lauck reports that while most everybody in agriculture has considered the Cargill\Continental purchase a "done deal"  it has yet to be approved by Judge Gladys Kessler  for the U.S. District Court for the District of Columbia, who is presiding over the case. Opposition to the sale generated a massive outpouring of letters of protest to the Justice Department and it has yet to answer those protests as required by law and in turn forward them to the judge.

In July, 1999 the U.S. Department of Justice proposed a consent decree which would allow the merger of Cargill and Continental Grain, two of the three biggest grain merchandisers in the country. The consent decree conditioned merger approval on the sale of certain elevators. (See Issue #45)

OCM is now asking the Attorneys General of several states, with continuing public pressure,  to block the merger if the federal court approves it. To date, at least six state attorneys general have submitted opposition letters to the federal court. Even though the court has ordered the USDA to respond to those concerns it has remained silent, but if protests continue, it is expected that the USDA will be forced into the "uncomfortable" position of actually taking a public stand on the merger.

While the official comment period ended on October 11 opponents of the merger are being asked to not only pressure their state's attorney generals, but to also to continue to urge the Department of Justice, which remains free to withdraw its consent to the proposed Final Judgment at any time prior to its entry, to block the merger.  Such written comments should be submitted to:

Roger W. Fones
Chief, Transportation, Energy & Agriculture Section
Antitrust Division
United States Department of Justice
325 Seventh Street, N.W., Suite 500
Washington, DC 20530

As family farmers and independent cattle producers continue their efforts to block such mergers, George Hall, president of the National Cattleman's Beef Association (NCBA), rather than opposing the recent string of mega-mergers in the retail food industry, is quoted in the January 2000 issue of Beef Magazine as seeing a "bright spot."  He says that the benefit to the beef industry is that there are "fewer players to influence."

Hall's remarks are viewed by critics as expressing his hope that he will influence such large retailers as Walmart's food division, while ignoring the fact that in recent years it has been the large retailers who have driven food supply prices ever lower in an effort to extract monopoly profits from the food sector while the producers receive less and less returns for their products.

Last year the NCBA actively opposed legislation proposed by Sen. Paul Wellstone (Dem.-Minnesota) which would temporarily halted for 18 months the biggest agribusiness mergers to allow time for a comprehensive study to make recommendations and conclusions as to whether consolidation is driving farmers out of business.

In a letter to Hall, St. Francis, Kansas cattle feedlot owner Mike Callicrate responded to the NCBA chief’s vision:

"It seems that you believe that the `bright spot' in this trend is that you will have `fewer players' to influence in promoting beef in the meat case.  As you set about `influencing' the CEO's of food giants Krogers, Albertsons, Safeway, and Walmart, perhaps you could respond to the following questions.

"1) Is it even better `for the industry' if there is only one grocery store chain in America?  In the world?
2) Perhaps if there are only five cattle producers, does that make your job easier in that there are fewer beef producers to influence?
3) Is it even better if the few major packers control cattle production because there are fewer players to influence?

"I appreciate your prompt response to these questions which will clarify perceptions of your role as president of the National Cattleman's Beef Association."


Reacting immediately to the possibility of seeing one of its most venerable institutions --- Ben & Jerry's Homemade  ---  eaten up by an unsolicited bid by outside corporations to take over the Vermont ice cream company several grass-roots campaigns have been organized to block such a sale, reflecting the revered status that has grown up around the company.

Wall Street analysts, Ross Sneyd of the Associated Press reports, have said themost likely bidders are three of the company's main competitors --- Dreyer's Grand Ice Cream, Good Humor-Breyers and Ice Cream Partners USA, a partnership of Haagen-Dazs and Nestle.

"People who love our ice cream love he fact that there really is a Ben and there really is a Jerry,"  Michael Garrett, owner of four Ben & Jerry's franchises in Connecticut and New York, told Sneyd. "They don't want to see their heroes selling out." Although it would be unlikely that Garrett would lose his franchises he expressed concerned about the losing of present company's identity and warned any corporate suitors: "If by some miracle you are able to take us over, we're not changing. You have to change."

Uniting those who are fighting any outside takeover of Ben & Jerry's is the hope that the company's present board of directors will consider more than just the financial impact on its shareholders when it evaluates any such takeover bid, but also consider how a sale would affect its corporate culture, its customers and the communities where it operates.

"Ben & Jerry's was a ground breaker in raising consciousness that capital can, in fact, be caring," said Judy Wicks, owner of the renowned White Dog Cafe in Philadelphia, Pennsylvania and a long-time proponent of socially responsible business practices.

Founded in 1978 by New York friends Ben Cohen and Jerry Greenfield the company donates 7.5% of its pretax profits to charity, and it maintains a so-called double bottom line dedicated to earning a profit and promoting social good which also includes  buying its milk from small family farms and its nuts from sustainable farms in South American rain forests. Ben & Jerry's also took the lead and is among a handful of dairy product manufacturers united in opposing the use rBGH milk in its products.

Wicks is currently helping a group calling itself the Coalition to Save Ben & Jerry's to organize nationwide rallies designed to generate support for Ben & Jerry's remaining independent. In addition, a majority of the 206 Ben & Jerry's franchise stores are encouraging customers to send postcards to the company's board members urging them to reject any takeover bid.

An independence rally was held outside the company's flagship store in Burlington, Vermont in December, and Gov. Howard Dean has practically declared the company a symbol of the state it calls home. "Ben & Jerry's is a signature company for Vermont," he said. "It is like maple syrup. Ben & Jerry's has probably done more to market Vermont than any company in the last 20 years."


CARLOS SLIM, Mexico's richest man, reportedly has bought $90 million of stock in the  Philip Morris Companies, on a day that shares of the world's largest cigarette maker and the U.S.'s largest food manufacturer, traded close to a four-year low.  Slim, a Philip Morris director since 1997, bought 3.9 million shares for $22.58 to $23.82 each at the end of December through an affiliate, Orient Star Holdings L.L.C., according to a Securities and Exchange filing. As of October 1999 there were 2.4  billion shares of Philip Morris outstanding. The move, according to the Bloomberg News Service, follows similar purchases of depressed shares in companies including Apple Computer Inc., CompUSA Inc. and OfficeMax Inc. that have given the 59-year-old Mr. Slim a reputation as the Warren Buffett of Latin America.

SARA LEE has been hit with the first wave of lawsuits in  connection with an outbreak of food poisoning that killed 15 people and sickened hundreds of others in 1998. Five suits, on behalf of the estates of four people who died of the disease and two people who recovered, were filed in Illinois's Cook County Circuit Court, charge Sara Lee and its Bil Mar Foods plant in Zeeland, Michigan for the outbreak of Listeria. In 1999, the Centers for Disease Control and Prevention linked the unusual outbreak of the virulent  form of food poisoning to the Zeeland plant, but cautioned that not every case of illness could be linked precisely to the plant. Sara Lee was forced to recall 15 million pounds of hot dogs and other meats in December 1998,  four months after the first Listeria cases were reported. New cases of the disease dropped off sharply after that recall. (See Issue # )

ARCHER DANIELS MIDLAND AND CARGILL, INC., in formal complaints filed with the U.S. Trade Representative,  have accused China of dumping citric used in carbonated drinks onto the U.S. market at below fair-market  value, and  have asked the government to impose  duties of 350% or more. ADM ("Supermarkup to the World"), Cargill and Tate & Lyle Citric Acid Inc. have alleged that Chinese exports of citric acid and sodium citrate to the U.S. has tripled since 1996 while prices have declined consequently China's share of the U.S. market more than doubled in 1999, according to the companies.

GENERAL MILLS, the Minnesota cereal maker, which counts Cheerios, Wheaties, Total and Lucky Charms among its brands, has surpassed Kellogg Co. as the biggest U.S. cereal company. Based on figures for the four-week period that ended December 5, 1999 General Mills had 29.8% of the market, based on pounds sold, while Kellogg dropped to 27.9%, according to supermarket data collected by Information Resources Inc..Purchases of General Mills' cereals rose 4.1% during the reporting period, while purchases of Kellogg cereals dropped 14%. Kellogg makes Corn Flakes, Rice Krispies, Froot Loops, Special K, All-Bran and other cereals. General Mills has worked out a deal with the U.S. Mint and has rolled out a special Cheerios boxes with a new 2000 penny in every box and a new Sacagawea dollar coin in every 2,000th box. The redesigned, gold-colored coin features the Shoshone woman who guided the Meriwether Lewis and William Clark expedition to the Pacific in 1805


The Corporate Agribusiness Research Project (CARP) web site is now posted on the World Wide Web featuring: THE AGBIZ TILLER, THE AGRIBUSINESS EXAMINER and "Between the Furrows."

THE AGBIZ TILLER, the progeny of the one-time printed newsletter, now becomes an on-line news feature of the Project. Its initial essay concerns one Hillary Rodham Clinton, the almost declared candidate for a U.S. Senate seat in New York State.

In "HILLARY RODHAM CLINTON'S $99,537 MIRACLE: IT'S THE PITS!!!" now available through THE AGBIZ TILLER you'll learn some of the messy details behind her cattle futures "miracle." You will also find in this section the archives for past editions of the THE AGBIZ TILLER.

By popular reader demand THE AGRIBUSINESS EXAMINER section includes not only an issue-by-issue and verbose index of this weekly e-mail newsletter, but an archive of all the past issues.

In "Between the Furrows" there is a wide range of pages designed to inform and educate readers on the inner workings of corporate agribusiness. In addition to CARP's "Mission Statement," "Overview" and the Project director's "Publication Background," the viewer will find a helpful "Fact Sheet" on agriculture and corporate agribusiness; a "Fact Miners" page which is an effort to assist the reader in the necessary art of researching corporations; a "Links" page which allow the
reader to survey various useful public interest, government and corporate web sites; a "Feedback" page for reader input, and a page where readers can order directly the editor's The Corporate Reapers: The Book of Agribusiness.

The CARP web site was designed and produced by ElectricArrow of Seattle, Washington.

Simply by clicking on either of the addresses below all the aforementioned features and information are yours to enjoy, study, absorb and sow.

Although there is no subscription fee for THE AGRIBUSINESS EXAMINER, donations will, as always, be gladly accepted.Checks made out to A.V. Krebs, P.O. Box 2201, Everett, Washington 98203-0201 [NOT to "Agribusiness Examiner"] will continue to be received with much gratitude. A reminder also to those who might wish to receive a weekly e-mail edition of THE AGRIBUSINESS EXAMINER, please provide your NAME and E-MAIL ADDRESS. At this time THE AGRIBUSINESS EXAMINER is not available in printed form. --------------B8477CC79B5E0712408499D1--