EXAMINER                                                Issue # 83   August 3, 2000

Monitoring Corporate Agribusiness From a Public Interest Perspective

A.V. Krebs

                                                        EDITORS NOTE
For nearly two years now THE AGRIBUSINESS EXAMINER has been regularly (ok! almost regularly!) appearing in an ever-increasing number of people’s e-mail boxes. In the course of these two years generous readers have supported THE AGRIBUSINESS EXAMINER with their contributions, earning them the undying gratitude of this editor\publisher. It is earnestly hoped that in the weeks and months ahead that such munificent reader financial support WILL continue. Checks may be sent to “A.V. Krebs.” To receive the issues of THE AGRIBUSINESS EXAMINER send name and e-mail address to


It seems that ABC News corporate apologist John Stossel has “misspoke.”

In a February 4 essay on organic food for the network’s “20\20” news program Stossel, citing research he said was commissioned by ABC News, reported that organic food appeared more likely than conventional food to be contaminated by E. coli bacteria. Stossel went on to claim that conventional produce does not necessarily have more chemical poison residue than organic produce.

"Our tests, surprisingly, found no pesticide residue on the conventional           samples or the organic," Stossel reported.

However, according to the New York Times Jim Rutenberg, two researchers who were commissioned to do the testing --- Dr. Michael Doyle, a scientist with the University of Georgia, and Dr. Lester Crawford, director of Georgetown University's Center for Food and Nutrition Policy --- said they never tested produce for chemical poison residue for ABC.

The network is now  looking into whether the statement about produce, a key premise on which Stossel built his case, was made without any basis in fact. "All I agreed to do was test for indications of pathogens," Dr. Doyle said. "I didn't do tests for pesticides."

Dr. Crawford indicates also that while he did not test produce for chemical poisons, he did test chicken --- and found residue on the samples of conventional poultry but not on samples of organic poultry. Stossel made no mention of poultry.

Despite Doyle and Crawford’s disclaimers, David W. Fitzpatrick, producer of the segment, claims that the chemical poison tests were done and that the results were forwarded to the Organic Trade Association, a group which spoke in defense of organic produce in the “20\20”segment. OTA’s executive director Katherine T. DiMatteo, however, said that to date the organization had not received results from any tests for chemical poison residue on produce.

Despite being told of the doctors' denials, ABC repeated the report on July 7. During an on-the-air conversation with Cynthia McFadden, a "20/20" anchorwoman, Stossel again said, "It's logical to worry about pesticide           residues, but in our tests, we found none on either organic or regular           produce."

Last week, Rutenberg reports, ABC News executives still had not addressed the questions raised in the February report. At first they claimed that the chemical poison tests were performed on produce by Dr. Crawford. Told that Dr. Crawford maintains he did not do such testing, they later released a statement saying they would look into the matter and "if a mistake was made, we will correct it." Stossel had no comment and  Fitzpatrick was on assignment in Africa and unavailable.


It has been said that Bill Clinton is a blank check for corporate America and recently that truth was born out again with the appointment of a fellow Arkansas friend and corporate lobbyist to "represent" U.S. consumers on a transatlantic committee set up to avoid a trade war over genetically engineered foods.

Last May, in an effort to settle a transatlantic trade war and their differences over food issues, U.S. and European leaders agreed to create a 20-person Biotechnology Consultative Forum, representing industry and consumer interests on both sides of the Atlantic.

Secretary of State Madeleine Albright, in appointing the U.S. members of this advisory forum asked the two sides to suggest a compromise on labeling, safety testing and other regulatory issues, and to present it to the next U.S.- European economic summit in December.

Although the State Department asked environmental and consumer opponents of genetically engineered foods to nominate their representatives to the forum, it subsequently ignored the nomination of consumer representative Michael Hansen --- a scientist with Consumers Union -- and instead named Carol Tucker Foreman, who recently took over food issues for the Consumer Federation of America after 18 years as a lobbyist.

An Arkansas native, Foreman came to Washington in 1961 as a Senate staffer, was executive director of the Consumer Federation of America in the early 1970s and was appointed an assistant secretary in the U.S. Department of Agriculture during the Carter administration. While Foreman help persuade Congress to eliminate a co-payment requirement that had kept millions of people from getting food stamps, she also relaxed poultry inspection rules that favored big chicken farmers like Arkansas' Tyson Foods.

After she left USDA in 1981 and formed her own lobbying firm she helped Monsanto get USDA approval for bovine growth hormone (rBGH), lobbied for Olestra, Procter & Gamble's fat substitute, and consulted with tobacco giant Philip Morris. Her corporate affiliations, however, never damaged her
Democratic Party credentials nor her Arkansas roots.Her brother is Jim Guy Tucker, the former Arkansas governor and Whitewater figure, and a long-time FOB (Friend of Bill).

“It didn't surprise me at all when the White House nominated her to this
international committee,” John Stauber, co-founder of the Center for
Media and Democracy, a Madison, Wisconsin, nonprofit that tracks lobbyists, told the San Francisco Chronicle’s Tom Abate.

“She's trusted and tight with the Democratic Party, she isn't threatening
to industry and she has managed to retain consumer credentials,” Stauber
said. “Who better to try to smooth over these differences (between Europe
and the United States) and make the world safe for the export of genetically
engineered foods?”

Currently, former U.S. trade representative and long-time Democratic Party operative Mickey  Kantor also serves on the Monsanto Corp. board of directors.

“We think it's a big mistake to appoint a person to represent consumers
who's been so closely tied to the biotech industry,'' said Dan Seligman, the
Sierra Club's representative on trade issues.

Other Foreman critics, according to Abate, seem to prefer that the transatlantic compromise effort fail. “Lori Wallach, a trade specialist with Public Citizen, a nonprofit advocacy group in Washington, D.C., said if U.S.-European differences over genetically engineered foods spark a trade war, it could topple the entire World Trade Organization (WTO) framework which, in her view, favors corporate profits over worker and consumer interests.”

In Foreman’s defense CFA Executive Director Stephen Brobeck says that it is `”absurd” to suggest that Foreman, who has worked on Capitol Hill for 40 years, would be beholden to Monsanto because she did some “modest consulting” for the company five years ago.

“I would challenge anyone to identify any statement or action since she's
returned to CFA that did not serve the public interest,” Brobeck said.
“People in this town move between the private, public and nonprofit sector
all the time.”


Expressing disappointment that USDA’s much awaited announcement of new regulations to promote fair competition in livestock markets, Gilles Stockton, a rancher from Grass Range, Montana who chairs the Northern Plains Resource Council Ag Task Force, feels the newly issued rules fall short of the expectations of many  family farmers, ranchers and consumers.

“What Secretary Glickman has proposed is a step in the right direction, but this proposal does nothing to stop the vertical integration that is threatening to eliminate independent cattlemen like myself, and that’s what we’re really concerned about.”

On July 28 Secretary of Agriculture Dan Glickman announced that the USDA’s  Grain Inspection, Packers and Stockyards Administration (GISPA) will issue  new rules in order to ensure fair competition in the livestock, poultry, and  meatpacking industries.  Specifically, the new regulations will require full  disclosure of contract terms, clarify packers’ record-keeping requirements,  prohibit some conditional purchases, and require that packers specify the  basis on which they pay different prices for like quality cattle.

Glickman, however, has once again postponed a decision on the Western Organization of Resource Council’s (WORC) petition for rulemaking on captive supplies, which seeks to restrict the way packers use forward contracts and cattle they own and feed themselves.  Glickman said that USDA still needs to gather more information, prompting pointed criticism from the two citizens’ groups.

“The USDA has been studying the proposed rules for over four years, and I do not understand what further evidence is needed,” said Stockton, pointing out that WORC’s proposed rules are supported by extensive legal analysis, economic evidence, and have wide public support from agricultural and consumer groups representing hundreds of thousands of individuals.

WORC’s proposal has likewise been endorsed by a bipartisan group of Mountain and Plains State Congressional delegations and state officials, including Montana Senators Max Baucus (Dem.) and Conrad Burns (Rep.), Attorney General Mazurek, and Congressional candidates Brian Schweitzer and Nancy Keenan.

Shane Kolb, a rancher from Meadow, South Dakota who chairs WORC’s Ag Issue Team, observed that Glickman’s decision to gather more evidence is
well-meaning, but a classic case of too little, too late. “Glickman has
side-stepped a decision on our proposal to end the secret deals undermining our livestock markets.  With the small amount of time he has left to act, that big step sideways looks very disappointing from here in the country.”

USDA statistics indicate that in the four years that have passed since WORC’ s petition for rulemaking was published in the Federal Register, the average level of captive supplies in the major cattle-feeding states has increased from 20% to 40% of total slaughter.

Two subsequent USDA economic studies demonstrate that higher levels of captive supplies result in lower cattle prices, resulting in less money for cattle producers. This explains why cattle feeders have received less and less for their cattle while retail beef prices have steadily increased.  Estimates based on USDA’s own Texas Procurement Study show that at today’s levels of captive supplies, cattle producers may be losing more than $1 billion a year to secret cattle deals.

Partly in response to WORC’s concerns, Glickman appointed a Commission on Concentration in Agriculture in February of 1996, and in the following year formed the National Commission on Small Farms, each of which conducted hearings and gathered evidence.  In June of 1996, the Committee on Agriculture Concentration reported to Glickman that he had the power and discretion to enact the market reforms proposed by WORC, and the minority report endorsed WORC’s proposal.

The National Commission on Small Farms endorsed WORC’s reforms outright.  Members of both NPRC and WORC expressed dismay at Glickman’s refusal to follow the recommendations of the commissions he had appointed to examine the issue.

“That Secretary Glickman, at the end of his tenure in office chooses to not
address the problem of market structure is indefensible,” said Stockton.
“The Packers and Stockyards Act clearly gives him the authority and
obligation to stop anti-competitive practices.  Since he has chosen not to
meet this responsibility, we are left to try and understand why.  We can
only conclude that he is sacrificing independent cattle producers and the
free market for big money and global corporations.”


The United Nations Food and Agriculture Organization (FAO)  has published a report admitting that food supplies are set to grow faster than the world population.

The report, "Agriculture: Towards 2015/2030," notes that the world
population of around eight billion people projected for 2030 is expected to be better fed with more people having an adequate access to food than in earlier times.

The report says "growth in agriculture will continue to outstrip world  population growth of 1.2% up to 2015 and 0.8% in the period to 2030."

Despite such forecasts, proponents of genetic engineering, such as Dennis Avery, director of global food issues for the Hudson Institute, a right-wing public policy think-tank, continue to claim that without the development of more geneticically engineered food  future generations throughout the world will go hungry.

He also believes that  the “European Union has embarked on a quixotic global tour to explain why it should be allowed to block imports of transgenic foods under a `precautionary principle’ because its consumers are frightened of them --- even though there is no proof that any of the foods are dangerous.”

Writing in a recent op-ed essay for Knight Ridder/Tribune News Service, Avery argues that “if Europe is allowed to block imports for reasons of public fear, then fear campaigns could become trade barriers against virtually all imported products . . . Today's globalizing world could be pitched back into the tariff-war days of the 1930s --- and perhaps another Great Depression.

Avery believes that “activists opposing bio-technology in food production” are “already are fighting a futile, rear-guard action. “

Despite recent reports to the contrary, Avery claims that “transgenic crops have swept across the world more rapidly than any previous farming technology, mainly because they protect crops more effectively, using less pesticides. The world's farmers are likely to plant record amounts of land to biotech crops in 2000, to reduce pesticide usage and get modestly higher yields.”

Avery notes that Dr. Norman Borlaug, who won the Nobel Peace Prize in 1970 for breeding the "miracle wheat" of the Green Revolution, “is enthusiastic about biotech crops. He warns that organic farming could not feed more than four billion people --- the world already has more than six billion  --- even if we plowed down all the forests on earth for more plantings."

Concluding his defense of genetically  engineered foods as the future panacea for meeting the world’s nutritional needs Avery notes,  “surprisingly, the activists opposed to bio-foods are not protesting the use
of bio-technology in medicine, where new developments hold the promise of saving millions of people from colon and breast cancer and AIDS

“Ethically, of course, there's no justification for using biotechnology to
help the sick, but not the hungry. Fortunately, the activists won't have to
wrestle with that dilemma much longer. The march of progress already is
leaving them behind. “


“The Philip Morris-Nabisco merger is a major event in the new wave of
acquisitions that is sweeping the global food manufacturing and retailing industries. Antitrust law, as it is currently applied, takes a very narrow view of the consequences of market and product extension mergers.

“Such mergers must pass antitrust muster only if the two firms compete in a particular market such as the manufacturing of cookies, and if their combined market share raises concerns about the possible exercise of power in that market after the merger.

“Yet the Philip Morris-Nabisco merger raises the issue of market power in a more general fashion, and in much the same way that market extension mergers among large supermarket retailers raise it. Firms with dominant positions in several markets and large overall aggregate sales can play the game differently than their smaller rivals.

“We may be moving to an economic system of very large bureaucratic
corporations that replace markets with bargaining and contractual
integration. This version of "supply chain management" and "category
management" has very little to do with logistic cost efficiency. Ultimately, it is the triumph of Chicago school antitrust economics.

“In a world of sequential market power at two or more stages in the food
marketing channel, vertical competition by firms at different stages of
the channel reduces total channel profits. The economic problem reduces
to how to coordinate sequentially powerful firms so that they extract
only the one monopoly tariff that maximizes channel profits.

“Please, no more than one monopolist to a distribution channel! Moving from sequential monopoly to a single monopoly actually increases output and lowers consumer prices. Since outright integration between food
manufacturers and retailers is unfeasible, the preferred strategy is
bargaining and contractual integration, in other words, "supply chain

“This analysis assumes that these mergers generate barriers to entry at
the manufacturer and at the retailer level so that the titans need deal
only with each other. Since this emerging system allows them to increase
their profits over alternatives that allow entry, this will be true.

“One might think that retailers would encourage entry at the manufacturing
level and vice versa to increase their power relative to the other side;
however, this process would cause both sides to lose market power, and
the result would be a reversion towards competition in a market. This is
a classic example of the prisoner's dilemma in game theory. Since neither side wants this option, it is doubtful that it will occur.

“The system is moving towards gridlock with power being effectively
exercised jointly by very large manufacturers and very large retailers,
behind closed doors. Intervening markets die and are supplanted by John
Kenneth Galbraith's technocracy and planning.

“A valid question is how many markets does an economy need? If one projects the Chicago school thesis to its logical endpoint, we need only one market, an efficient capital market. Then investors can compete for the right to own the sole surviving, and therefore "efficient", firm that runs the world's

“Reductio ad absurdam!”

--- Editorial: from Food Marketing Policy Center Newsletter, University of Connecticut, June 2000 (Vol. 7 No. 2) by Ronald W. Cotterill


* Land O'Lakes and Farmland Industries said that they had agreed to merge their animal feed production units into a joint venture that will be the largest feed producer in North America. The joint venture, Land O'Lakes Farmland Feed L.L.C., will have initial annual sales of about $1.6 billion and annual feed production capacity of about 9 million tons, the two large farmer-owner cooperatives said in a statement.

* McDonald's, Sysco, Tyson Foods, the nation’s largest poultry producer and Cargill, Inc., the nation’s largest private corporation, have announced that they will be forming an online marketplace to facilitate sales and purchases to the food service industry. The new Network will be based in Chicago and will reported be open to all segments of the industry.

“Tremendous opportunities exist in the foodservice supply chain to gain greater efficiencies and drive out costs,” said Robert Lumpkins, Vice Chairman of Cargill.

According a Network press release, “Fragmentation in the foodservice industry and a complex supply chain provide tremendous opportunities to cut costs and create efficiencies. eFS Network's' neutral web-based marketplace will streamline information flow between participants and                                           promote industry-wide technology standards. It will feature both a public exchange that will promote connections between participants in the foodservice industry and private exchanges that will enable confidential  customer-supplier interactions. Initially, the exchange will focus on U.S and Canadian foodservice distribution, a $150 billion industry.”


“We believe that if American voters were asked who should raise their food:
family farmers or factory farmers, they would clearly vote for family
farmers. If they were asked who they trusted to take care of our air, water, biodiversity, and beautiful countryside, and who they trusted to produce safe, high quality, healthful food, they would say family farmers.

“Also, without question, there are more family farmers in your districts
than factory farmers --- family farmers are voters, too.  The National Family
Farm Coalition concludes, therefore, that if democracy is to mean anything
in this great republic, Congress must legislate a system that supports a
future for family farms and assures that the nation's food is produced on
family farms, not factory farms.

“We ask you today to end the madness of the so-called `Freedom to Farm Act' and support provisions of a new farm bill we call `The Food from Family Farms Act.'

“Some people, even some farmers, believe it is too late to change the
sickening trend toward factory farms and the increasing corporate control
of our food supply. The National Family Farm Coalition believes now is the
time to change the direction of our failed farm policy.

“We need to have food and farm policies that encourage young people to stay on the land or return to the land.  Every year our communities send young farm people to agricultural colleges with their secret hope that they might return someday to become family farmers. Many farm families own land and rent land that could be turned over to this next generation except for one thing: farm prices are too low to make a living.

“There is no sense in letting this situation, along with our crumbling small towns and polluted landscape, get any worse. Let's join together to make the year 2000 the beginning of the end of factory farming  and the beginning of a hopeful future for family farmers, the consuming public, and our forsaken countryside.

“Let me make one thing clear. If we are to have a family farm system in this
country, it is farm commodity prices that need raising, not more direct
government payments --- a record $32.3 billion this fiscal year. If farm
prices were raised so that the corporations that make record profits from
buying these cheap commodities were paying a fair price in the first place,
then the $32.3 billion could be spent on many other important national
needs. We spend only a little over $4 billion on Head Start for instance.
We could also make conservation grants and low interest loans to young
people returning to the land to farm in sustainable, earth-friendly ways.  . . .”

--- Excerpt from testimony before the U.S. House of Representatives Agriculture Committee’s  “Review of Federal Farm Policy” hearings, July 12, 2000 by George Naylor. Naylor, representing the National Family Farm Coalition (NFFC), is a family farmer from Churdan, Iowa and a member of the Iowa Citizens for Community Improvement (Iowa CCI) and has been farming for over 25 years raising corn and soybeans on 560 acres in Iowa.


Denise O"Brien, an organic farmer,  political activist from Atlantic, Iowa and long-time friend of the Corporate Agribusiness Research Project has been named to the Iowa Women's Hall of Fame.

O"Brien is founder and coordinator of the Women, Food and Agriculture Network and is past president of the National Family Farm Coalition. She speaks frequently on world trade and agricultural issues and has addressed the United Nations General Assembly.

The Iowa Women's Hall of Fame is sponsored by the Iowa Commission on the Status of Women.

O’Brien and her husband Larry and family operate a dairy farm in west central Iowa.


The Corporate Agribusiness Research Project (CARP) web site now contains a  streamlined search engine which will not only allow viewers to  find needed
information by simply using key words, but they will be able to also access
Issues #1 through #77 of THE AGRIBUSINESS EXAMINER.

The CARP web site, which is now posted on the World Wide Web, features: 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 Democratic Party 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.

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
page of "Quoteable Quotes" periaing to agribusiness and corporate power; 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 design and  produced by ElectricArrow of Seattle,

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