EXAMINER Issue # 86 August 24, 2000
Monitoring Corporate Agribusiness From a Public Interest Perspective
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AND ON THE THIRD DAY THEY BOUGHT EACH OTHER:
SMITHFIELD JOINS ADM AS MAJOR IBP STOCK HOLDER
Apparently unsatiated by its own "urge to merge" and the forming of "strategic alliances" corporate agribusiness is now beginning to adopt an even newer means to increase economic concentration --- competing corporations owning one another's stock!!!!
Such a tactic received new emphasis with the report last week by Dow Jones Newswire's Cathleen Egan that since last summer Smithfield Foods Inc. , the nation and the world's largest pork processor, has been amassing shares of IBP Inc., the nation's largest beef processing company, now owning a 6.3% stake in its pork-producing rival.
Currently Archer Daniels Midland (ADM) "Supermarkup to the World" also owns a 13.3% stake in IBP.
According to a 13-G form filed with the Securities and Exchange Commission recently Smithfield, of Smithfield, Virginia., owns some 6.6 million shares of IBP, of Dakota Dunes, South Dakota.
Egan reports that Smithfield spokesman Jerry Hotter would not say whether the company owned any IBP shares at this time last year, "but at least one observer says the company did not. As of March 22, Smithfield held roughly 800,000 shares of IBP, says Prudential Securities Inc. analyst Jeff Canter. That means Smithfield must have aggressively bought the balance, or 5.8 million shares, in the last five months."
Hotter told Dow Jones Newswires that Smithfield has acquired shares of IBP "on and off for some time" and has even sold the stock "at a profit."
While the buying and selling of IBP stock has gone largely unnoticed owing to the fact that the SEC does not require investors who own less than 5% of a company to make a public disclosure of their holdings, Smithfield's current stake, its largest ever in IBP, surpassed that 5% threshold.
UNION ORGANIZERS CHARGE SMITHFIELD:
'CAMPAIGN OF INTIMIDATION AND VIOLENCE
AGAINST WORKERS' EFFORTS TO ORGANIZE"
Charging Smithfield Foods and North Carolina's Bladen County Sheriff's Department with carrying out a systematic campaign of intimidation and violence against workers' efforts at Smithfield's Tar Heel plant to get a union, two union activists --- Rayshawn Ward and John Rodriguez --- recently filed a civil rights lawsuit against the corporation and law enforcement agency.
The lawsuit was lodged under a federal statute commonly known as "Section 1983," which was originally introduced as the Ku Klux Klan Act of 1871. Ward and Rodriguez were beaten, arrested and jailed by the company's security force working in concert with the Bladen County Sheriff Department's deputies during the 1997 campaign to organize for a voice on the job with the United Food and Commercial Workers International Union (UFCW) at the pork plant.
The UFCW activists also witnessed Smithfield, in conjunction with the Sheriff's Department, wage an unprecedented, systematic campaign of violence, intimidation, coercion and harassment against their 4,500 co-workers at the plant for exercising their legal right to join a union. This included a security force of heavily armed Bladen County Deputy Sheriffs armed in riot gear stationed at the entrance to the plant on days that civil rights leader Rev. Jesse Jackson and other religious leaders handed out literature with workers.
On August 21, 1997, the final day of the election, Smithfield used the power delegated to it by the Sheriff's Department to handcuff, mace, and jail Ward, a Smithfield meatpacking worker whose only crime was that he supported the union. Rodriguez, a union organizer, in seeking to help Ward was assaulted, according to the lawsuit, by the Company's Chief of Security, handcuffed, jailed and faced criminal charges.
In their action against Smithfield and the Sheriff's Department the two union activists charge that the arrests occurred in the context of a Company-initiated "riot" following the vote count.
In addition, they told a recent press conference, Smithfield's actions on the day of the election were the culmination of the company's systematic campaign carried out to prevent workers from exercising their legal right to organize a union. During the union drive, the company held forced meetings to intimidate and threaten workers for supporting the union. Smithfield held separate meetings for black and Latino workers to pit worker against worker based on race. During a union rally in Lumberton, North Carolina, the union office was vandalized with racial epithets spray-painted all over the office.
On the day of the election, deputy sheriffs, dressed in battle gear, lined the long driveway leading to the Bladen County plant. The sheriff's menacing presence created a violent mood for the workers who were seeking to exercise their right to vote for a voice on the job. As workers passed the lines of police in riot gear, they saw company management standing with the head of the Bladen County Sheriff's Department near the entrance to the plant.
The company's message was clear to workers, Ward and Rodriguez stressed, if you vote for a union, the law and law enforcement will not be on your side. Smithfield is also currently facing and defending itself, according to the two union organizers, against numerous charges with the National Labor Relations Board for restraining workers' right to vote in a union election.
"America, American justice and America's principles are at a crossroads. Smithfield would have us go back to the dark days of company violence and threats against workers who try to uplift themselves. We are here to say that America's been down that road and we won't go back," said Dr. Bennie Mitchell, Chair of Labor Relations for the National Baptist Convention-USA, Inc.
Smithfield Foods is the world's largest pork processor and hog producer with expected 1999 production of more than 5.3 billion pounds. Its Bladen County plant is the largest hog processing plant in the world.
The UFCW is the largest organization of meat packing workers in North America, with 1.4 million members. UFCW already represents a sizable number of Smithfield Packing employees, including workers at its subsidiaries John Morrell, Patrick Cudahy, Smithfield Packing-Landover, Lykes Meat Group and Northside Foods. Workers at other meat packing companies like IBP, Excel, Swift, Monfort, and Hormel are also members of the UFCW.
THOUSANDS OF ROTTING CHICKEN CARCASSES
DISCOVERED ON COMPANY’S MARYLAND FARM
Thousands of rotting chicken carcasses have been found by the Delmarva Poultry Justice Alliance (DPJA) on a farm owned by Tyson Foods Breeder Operations near Salisbury, MD. The carcasses in differing stages of decomposition, lay in a pool of water draining off into surrounding wetlands. Investigation of other company owned farms in the area revealed more rotting carcasses.
The rotting carcasses were discovered by DPJA while investigating a complaint made by the tenants on the farm about the unsafe conditions of the poultry house they worked in for Tyson. The tenants, William and Sheila Trader, had repeatedly asked Tyson to make repairs on the poultry house to no avail.
Because of Tyson's refusal to take action, the Traders filed a complaint with Maryland Occupational Safety and Health Administration. Tyson retaliated by removing the breeder hens from the farm and telling the Trader's that they were not raising chickens for Tyson.
However, Tyson agreed that the Trader's be allowed to continue living on the farm and pay rent and electric, but when the company became aware that the chicken carcasses had been discovered they sent the Trader's an eviction notice.
"There is a lot going on here that most people don't know about," says William Trader. "Tyson denies knowing about the chicken carcasses, when in fact it was Tyson who instructed us to dispose of them this way." Further investigation revealed a manure shed and composting bins which have never been used. "They (Tyson) even tried to come in here and cover up the dead chickens so no one would see," says Trader.
"We can not allow Tyson to continue with their degradation of our environment," says Rev. Jim Lewis, President of DPJA, "nor can we stand by silently and watch the abusiveness suffered by the people who dare to speak out about it." DPJA released photos of the rotting chicken carcasses and made the Traders available at an August 16 press conference in its Pocomoke City office.
LOUISIANA POULTRY GROWERS:
“IT WAS EITHER PLAY
WITH CONAGRA’S BALL OR DON’T PLAY”
Louisiana poultry grower Frank Fox and six other Sabine Parish poultry growers have filed suit against ConAgra in an attempt to get the corporate giant to reimburse them for expenses associated with upgrades of their chicken houses, increased utility bills and loss of anticipated revenue through a seven-year contract that all of them signed in March 1999.
Lafayette attorney Craig Davis told the Shreveport Times Vickie Walborn that his clients had been the top producers for ConAgra's Natchitoches plant. That's why they were approached last year with the idea of producing a larger broiler chicken. To get a bigger bird, however, the growers had to retrofit their houses at considerable expense.
"They went to the banks and borrowed $100,00 to $150,000 each," Davis said. "They signed seven-year contracts in March 1999."
But after only one flock of bigger broiler chickens was produced, ConAgra apparently decided to back off the deal and stay with the smaller birds. "We believe this was just a ploy to get my clients to retrofit their houses,"Davis said.
Fox, who's been in the business with wife Judy for the past nine years and 14 years prior to that with his father, said his prior experience with ConAgra was trouble-free. "We did what they wanted. But with this, it was either play with their ball or don't play."
ConAgra provides the farmers with hatchlings and the feed to raise them, then buys the grown birds at a per pound price. Because ConAgra is the only integrator in the area, Fox and the rest of the growers still must do business with the company. Davis said his clients also accuse ConAgra of violations of the Unfair Trade Practices Act.
Walborn reports that a typical flock of small birds is produced in 37 to 40 days, weighing anywhere from 3.6 to 3.75 pounds each. Fox said it took 50 to 56 days to produce the bigger birds, which weighed about 6 pounds each. The bigger birds also meant less to sell. Fox commonly could raise about 23,000 of the smaller birds per house, compared to 26,000 of the larger ones.
In not too distant Union Parish, based on a 30-year study by University of Missouri rural sociologist Bill Heffernan, poultry growers have found after working hard all of their lives to pay off their debt they are being left with worthless facilities. Heffernan notes that the enclave represents countless rural areas throughout the South.
"For some of these people, contracted poultry production did allow them to continue to live in that parish," he observes. "Clear back in 1969 when this started, things were really tough in Union Parish. Most families had the choice to leave the parish or here was the alternative, and they chose this route."
"When we went back in 1981, there was competition between integrators, and the growers were much better off," he says. "Some of them had swimming pools and brick houses." They didn't want to talk about the market power of the integrators but were becoming anxious about eventually being tarred and feathered, Heffernan says.
By 1999, the county had only one integrator, and grower concerns had come home to roost, Heffernan observes. "In our most recent survey, of the 21 who were no longer in debt, 90% of those 21 would not recommend a young couple get into broiler production."
"Corporate farming is ripping rural America apart," says Bill and Marinell Strain of Valliant, Oklahoma, who raised poultry for 14 years and was once named Poultry Producer of the Year by their contractor Tyson Foods. "It might put a little money into the economy, but it's not much. It's poverty money. Mentally, we couldn't take the business anymore. Greed is what drives this business."
NLRB TO HEAR UNION BUSTING COMPLAINT
A complaint filed by the United Food and Commercial Workers International Union that ConAgra Inc., the second-biggest United States food company, threatened employees who tried to organize a union at its beef-packing plant in Omaha, Nebraska will be pursued by the National Labor Relations Board (NLRB).
The accusations include videotaping union organizers, threatening to confiscate union papers and prohibiting employees from distributing union materials in nonworking areas, according to Leonard Bernstein, regional lawyer with the NLRB in Overland Park, Kansas. ConAgra denied that it interfered with organizing efforts.
In recent years the nation’s slaughterhouses have been hiring unskilled workers in what they term a tight job market in the Midwest and South. Many of these unskilled workers are immigrants, however, fearful of speaking out regarding their wages and working conditions, thus the unions say they want to organize such workers to improve wages, benefits and workplace safety.
"There was sufficient evidence to warrant placing certain allegations before an administrative law judge," said Bernstein, but Bloomberg reports ConAgra would not face a fine if found in violation of the National Labor Relations Act, according to Bernstein.
“CAPTIVE LABOR FORCE” MAY SOON MATCH
BEEF INDUSTRY’S “CAPTIVE SUPPLY MARKET”
Cargill, the nation’s largest private corporation, may have found a home for its proposed new $100 million Excel beef packing plant in Iowa where it has been repeatedly shunned by communities within the state.
Iowa Department of Corrections officials, according to the Des Moines Register’s William Petroski, are talking about the possibility of offering a state prison as the site for a controversial new beef-packing plant.
Deputy Iowa Corrections Director Roger Baysden said recently that he has visited with Corrections Director W.L. "Kip" Kautzky about the idea, but no decisions have been made. Two possible sites would be at Newton or Rockwell City, where low-risk inmates would be available to work, he said.
The proposed plant, a joint venture between cattle producers and Excel Corp., has already met strong opposition in Des Moines and Cambridge and Iowa Falls residents while some Ottumwa community leaders have said they would welcome the facility, which would generate 1,100 jobs paying from $9.85 to $11.85 an hour. (See Issue #84)
Joel Brinkmeyer, executive vice president of the Iowa Cattlemen's Association, told Petroski his group has discussed the idea of using “non-traditional labor” for the beef plant, such as hiring part-time farmers or college students.
Iowa's labor shortage has caused many private employers to express interest in hiring inmates under special provisions of federal law.
Baysden said officials from Tama Beef Packing Inc. have expressed interest in bringing Newton prisoners to Tama to process meat, but that proposal didn't work out. Even if a state prison site would be used to establish a meat-packing facility, there wouldn't be enough inmates at either Rockwell City or Newton who would be qualified to fill every job at the plant, he said.
Under federal law, inmates can't be used to displace regular law-abiding workers.
CANADIAN NATIONAL FARMERS UNION:
BOLD PLAN TO END FARM INCOME CRISIS
In a bold and dramatic policy initiative the Canadian National Farmers Union has unveiled a plan that could play a significant role in ending a world-wide farm income crisis.
The plan calls for the world's five major grain exporters --- Canada, the U.S., the European Union (EU), Argentina, and Australia --- to take three percent of their land out of production, each year, until the price of grain doubles.
"Despite tight world grain supplies, prices are low. And despite huge profits among processors and grain companies, farmers cannot extract fair revenues or profits. However, it is exactly these low grain supplies and huge pools of money in the food production chain that give me hope," said NFU Vice-President Fred Tait in a recent Winnipeg, Manitoba press conference.
"With supplies low, small changes in supplies can have large positive effects on prices. And the vast profits among processors and retailers demonstrate that they could easily pay higher prices to farmers. Solutions to the farm income crisis are tantalizingly close."
"Given tight supplies, a credible agreement to reduce production could lead to swift results. The mere announcement that the five major exporters were negotiating such an agreement might lead to significant price increases," said Tait.
Higher prices to farmers need not mean higher prices for consumers. Tait noted: "Twenty years ago, the farmer got 7¢ out of a 74¢ loaf of bread. Today, that farmer gets 5¢ out of a $1.33 loaf. Bread went up 59¢ while the farmers' share went down 2¢.
“Millers and retailers raise prices to consumers, and lower prices to farmers --- profiting handsomely while exploiting both. The farmers needs another 5¢ per loaf, but this need not come out of consumers pockets. We think it can come out of the 59¢ increase that millers and retailers are pocketing. In an attempt to protect their large profits, processors and retailers will try to pit consumers against farmers-we mustn't let them succeed."
The NFU plan would also decrease government support payments in the EU, Canada, and around the world.
"The Canadian government is pushing to eliminate EU subsidies. The EU has said it won't stop subsidizing. Canada plans to force the issue during WTO negotiations. Even if Canada can succeed, its plan will take at least ten years to yield results,” Tait added.
“The plan we outlined today would lead to large subsidy reductions in all countries within five years. If governments are serious about reducing subsidy levels in the EU and around the world, a set-aside plan is the quickest way to do so. If governments are serious about ending the farm crisis, a set-aside plan is also an effective way to accomplish that goal.”
In a letter to Federal Agriculture Minister Lyle Vanclief and Canada's Provincial Ministers of Agriculture, NFU President Cory Ollikka outlined details of a proposed multinational set-aside plan. In Canada, the government could pay farmers $40 per acre to voluntarily take land out of production.
With 86 million acres of "land in crops", $344 million per year would be all that is necessary to induce farmers to take 10% of their land out of production. "This will certainly be a money-saving investment in the long term if it restores profitability to farming," said Ollikka.
Ollikka acknowledged that the farm income crisis is a multi-faceted problem related to corporate concentration, trade agreements, control of resources, environmental issues, and a host of other factors. While a set-aside agreement is not a panacea, it would address the most pressing aspect of the crisis: commodity prices far below the cost of production.
"Higher prices alone will not save family farms and rural communities. But continued low prices will certainly destroy them," said Ollikka.
Ollikka concluded: "Farmers need to understand that the federal government has many options to end the farm income crisis; that those options can lead to swift results; and that those options are not unreasonably costly. If the farm crisis continues, it will not be because it is unsolvable, it is because the Canadian federal and provincial governments callously choose not to act."
U.N. HUMAN RIGHTS SUB-COMMISSION:
WTO “NIGHTMARE” FOR DEVELOPING NATIONS
Labeling the World Trade Organization a “nightmare” for developing countries a United Nations appointed sub-commission on protection of human rights dismisses the WTO's open trading rules as based ``on grossly unfair and even prejudiced'' assumptions.
The document, a study of the effect of globalization on human rights, was written by two jurists, J. Oloka-Onyango of Uganda and Deepika Udagama of Sri Lanka.
If approved by the full sub-commission, it will be presented to the annual session of the overall U.N. Human Rights Commission when it holds its annual six-week session in Geneva in March and April next year. The rules of the currently 137-member WTO, the two authors said, ``reflect an agenda that serves only to promote dominant corporatist interests that already monopolize the area of international trade.''
In addition to recommending that the WTO should be brought under the U.N.'s purview the report calls for a ``radical review of the whole system of trade liberalization'' and critical consideration of whether it is geared toward shared benefits ``for rich and poor countries alike.''
But, as Reuters’ Robert Evans reports, “although it echoes criticism of the trade body from Western anti-globalization groupings, the 40-page report rejects the idea many of these groupings promote of linking trade rules to human rights, labor and environmental standards. Many `civil society' groups in developing countries also oppose such linkage, arguing that it would provide Western countries with an excuse to put up more barriers against goods from poorer states.”
Human rights, the U.N. report points out, were given only an oblique reference in the founding documents of the WTO, which was launched at an international conference in Marrakesh in 1994 to replace the old General Agreement on Tariffs and Trade (GATT). “The net result is that for certain sectors of humanity --- particularly the developing countries of the South --- the WTO is a veritable nightmare,'' the jurists declared.
In a discussion on the report, Evans notes, U.N. sub-commission member El-Hadji Guisse of Senegal, accused the WTO --- of which his country is a member --- of carrying out a “second colonialization process in which the only interest was profit,” according to a U.N. summary of his remarks.
If the U.N. were consistent, it would oppose the existence of the trade body --- which is outside the U.N. system and takes its decisions by consensus rather than vote --- whose driving motivation was ``money, domination and exploitation,'' he said.
CALIFORNIA DECLARES A STATE HOLIDAY
HONORING THE FARM WORKER LEADER
A California state holiday honoring the life of farm leader Cesar Chavez has been formally established by Governor Gray Davis.
Before 400 people on August 18 crowded into the Paseo de la Plaza, near where the city of Los Angeles was established in 1781, Davis proclaimed the holiday.
“Cesar Chavez brought hope and inspiration to tens of thousands of farmworkers, some of the hardest --- working people on the face of the Earth,'' Davis said. ``He taught us that injustice anywhere affects all of us everywhere.''
The new holiday will be on March 31, the day Chavez was born in 1927. State Sen. Richard Polanco, Dem.-Los Angeles, who has been working on the bill for three years, praised the Chicano leader. “Cesar was a symbol of hope to workers. He provided a voice for the voiceless and leadership for those who had the will but were unsure of the way.''
As the San Francisco Chronicle’s John Wildermuth in reporting on the Chavez ceremony noted “although Chavez's work as a union organizer was controversial during his life, the stage behind Davis was crammed with politicians and labor leaders from across the state, each anxious to join in singing the praises of a man who never earned more than $6,000 a year and who never owned a house.”
Chavez is the first union leader in U.S. history to be celebrated with a paid holiday, said John Sweeney, national president of the 14 million- member AFL-CIO. “This sends a powerful message that every worker is valued and each can fight for his dream,” he said.
State workers will receive a paid holiday, In addition the bill establishing the holiday also calls for California students to take an hour on the morning of the holiday learning about Chavez and his legacy of nonviolence and social justice and then spend the afternoon in some form of social service. Polanco's bill also provides $5 million for the federal AmeriCorps and the California Conservation Corps to work with school districts to plan public service projects.
“This is a historic day,” said Lt. Gov. Cruz Bustamante. “We honor a man who dedicated his life to improving the lives of the people who pick the food that we eat.''
CORPORATE AGRIBUSINESS RESEARCH PROJECT
WEBSITE SEARCH ENGINE NOW AVAILABLE
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
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
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
The CARP web site was design 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.