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The Packer's Professors
— by Lee Pitts

In 1862 our Congress passed the Morrill Act which gave every state some federal land which the states were then free to sell. As with all things regarding the federal government, there were a couple strings attached to the gift. The proceeds from the land sales were supposed to be used by the states to educate their residents in agriculture and mechanical arts. (Each state got 30,000 acres per Congressman). The other stipulation was that the work of the land grant institutions, created with the money from the sale of federal lands, must primarily benefit America´s family farmers. I wonder how those Congressmen would feel now when their beloved land grant system is often used against the very people it was intended to benefit.

Big Man On Campus

Perhaps David Harvey summed up the problem best four years ago in his book, University Inc. Harvey wrote, "A revolution is a foot in higher education. Those who pay the piper, (corporations and governments) will surely call the tune. The relevance of universities is on the line. And a recent flood of books, commentaries and reports all depict the University as a deeply troubled institution."

Along with everything else these days, the cost of upkeep on the old Ivory Tower has skyrocketed, while federal formula funding has decreased eight percent in the last ten years. As federal and state funding went steadily down, college administrators were forced to find new revenue streams. They found the best fishing in the big corporate pond.

The cost squeeze has wreaked dramatic changes on college campuses across the country. Professors who used to teach three classes per quarter or semester can often be found these days teaching only one class: The rest of their time is spent researching, submitting grant proposals or working with the private sector to raise cash. The big man on campus these days is a fund raiser. Step foot on almost any large university and you´ll find the place has been sold to the highest bidder. Either Coke or Pepsi, but not both, might be sold in campus vending machines because they bought exclusive rights. Buildings are named after big benefactors. In Berkeley, Laura Tyson, previously of the Clinton cabinet, is now known as the BankAmerica Dean of the Haas Business School. Corporate logos can be seen everywhere. It has gotten so out of hand that the University of Missouri is derisively called the University of Monsanto. In some universities signage space in lecture halls and on computer screens is sold to corporate sponsors. Colleges in need of new labs work with corporations to build new buildings. Naturally, such benefactors expect to have input as to what is taught inside those hallowed and corporate- sponsored halls.

The universities have proven to be good fund raisers. In 1985 about $850 million was given by corporations to universities. In less than ten years that figure was multiplied by a factor of ten. The universities have now come to depend on that money and if it comes with strings attached, well then, so be it. That´s a price they´re willing to pay. The academics know which side their bread is buttered on and the result has been the creation of what critics call "The Academic-Industrial Complex." And they don´t mean it as a compliment.

The financial figures don´t begin to tell the whole story. As I travel around I´m often given the opportunity to speak to classes of college students. I am always amazed at how little they know about concentration, captive supply and globalization. It seems they are being taught so that they may be plugged right into the system: The corporate system. And most students I visit with see nothing wrong with that.

Research This

In 1980 this country´s politicians were concerned that we were not keeping up with the Japanese. So, they changed the ground rules. The Bayh-Dole Act was offered as an incentive, paving the way for universities to patent the results of federally- funded research. Lobbying on the bill was intense and the day was won by the Business and Higher Education Forum, a group of captains of industry who saw the universities as a cheaper alternative to building their own research labs. The Bayh-Dole Act allowed universities to subsidize big business by doing a lot of their research. More laws have since been passed that allow corporations big tax breaks for investing in academic research. The Bayh-Dole Act, and a continued lack of government funding for ag research, has forced colleges to make countless deals with private companies to the point where 60 percent of all funds for ag research now comes from corporations.

From 1980 through 1998 industry funding for academic research expanded at a rate of 8.1 percent each year. Before the Bayh-Dole Act was passed professors and researchers at universities produced about 250 patents per year. In 1998 they filed 4,800 patent applications. According to the Chronicle on Higher Education, in 1998 the top ten research universities held 1,921 patent licenses which earned the schools $370 million per year in licensing income. Universities started up 78 for-profit companies and many professors used their research to lay the foundation for their own new companies when they left campus to try their hands in the real world.

Familiarity has bred some contempt. At a conference several years ago a poll was taken of the researchers in attendance and the result was that the professors thought that 10-15 percent of the work being reported at universities was fraudulent, tipped in favor of the corporations or the entity sponsoring the research. It´s like beef checkoff money being given to a professor to research how successful the checkoff is. If you want to continue to receive those research funds in the future you´d better come up with a favorable report. Act on behalf of your benefactors and you are apt to be rewarded with lucrative speaking engagements and more research money.

This has created some doubt as to the reliability of corporate sponsored research. According to the New York Times, "Scientists who report research findings are expected to divulge any financial ties that might influence their work. But often they do not, according to the first comprehensive analysis of disclosure policies in science and medical journals. In reviewing 61,134 scholarly articles published in 181 academic journals in 1997, researchers at Tufts University and the University of California at Los Angeles found just one half of one percent detailed personal financial interests, including consulting agreements, honorariums, expert witness fees, company equity and stock and patents. It is possible," said the New York Times, "that scientists have few conflicts to report. But experts say previous studies have shown that as many as half of all academic researchers consult with industry, and roughly eight percent have stakes in biomedical companies related to their research."

This leads some to wonder: Is the university research system being compromised and were ag schools meant to become profit centers for universities?

Gentlemen: A Little Decorum Please

The debate over the corporate/college relationship is heating up, sparked by comments like those of Jim Minert of Kansas State University. He allegedly referred to R-CALF, the grass roots organization for cow-calf producers, as "a radical fringe organization." Minert writes a column twice a month that urges producers to contract their production and thus become part of some packer´s captive supply. Minert also made the comment that "from a long-term perspective, concentration of the ag sector has provided innumerable benefits to society."

We do not know if recent million-dollar donations from Archer Daniels Midland and Cargill to Kansas State for a new grain center might have influenced Minert´s statements. Another Kansas State professor, Roger McEowen, said "I am concerned research results are skewed on the side of the hand that is feeding them."

Fred Stokes, President of the Organization for Competitive Markets, has long been critical of the role of academics in pushing us toward a world dominated by multinational conglomerates. Even before his organization was formed Stokes talked to this reporter about how universities were taking too much money from big business to develop new seeds, chemicals and genetically modified organisms. "I believe this violates the mission of our land grant institutions, promotes concentration of agriculture, and contributes to the de-mise of the family farm," says Stokes. "At land grant universities today the guy who puts up the loot is the guy who benefits, and that´s not always farmers and ranchers."

Professor Luther Tweeten struck back at Stokes during A Debate on the Structure of Agriculture, at Iowa State in September 2001. "When we pass around innuendo," said Tweeten, "as the Organization for Competitive Markets (OCM) does, for example, as to agribusiness, for people who are on the edge, that is enough to throw them over the edge. In a bunch of cases bankers were killed by farmers because of that atmosphere of innuendo and fear and hate and so we´re creating left-wing hate groups such as the Organization for Competitive Markets, that I think is very damaging to the country."

If this reporter knows anything it is that the OCM is NOT a left wing hate group!

Bought And Paid For

This brings us to the latest salvo from academia. Senator Tim Johnson (D-S.D.) introduced an amendment, which passed the Senate 51-46 on Dec. 13, that would prohibit beef and pork packer ownership, feeding, or control of livestock for more than 14 days prior to slaughter. An analysis regarding the amendment was issued by eight economists from seven land-grant universities. They were: Dillon Feuz, University of Nebraska; Glenn Grimes, University of Missouri; Marvin L. Hayenga, Iowa State; Stephen R. Koontz, Colorado State; John D. Lawrence, Iowa State; Wayne D. Purcell, Virginia Tech; Ted C. Schroeder, Kansas State and Clement E. Ward, Oklahoma State.

The group came to several conclusions about the bill, that in this reporter´s opinion could go a long way towards fixing the problems created by captive supplies. Here´s a sampling of the professors´ almost laughable conclusions.

  • The proposed legislation would constrain the ability of packers to accomplish the coordination and quality control they need for new branded products and put these important investments at risk.
  • The new legislation would block independent livestock producers from access to new branded product lines that offer producers a larger share of the consumer´s food dollar and better profit opportunities. If contracts that specify genetics, weight ranges, feeding regime, slaughter intervals, etc. would be banned because they constitute packer "control", producers would have less access to these developing product lines and the added margins coming from them.
  • The bill would limit the role and diminish the gains carcass merit pricing has made. Carcass merit pricing is possible without contracts and marketing agreements. However, part of the benefit of carcass merit pricing for buyers and sellers is having supplies of known quality committed well in advance of harvest. Gains in product development and consistency, meeting consumer demands, are clearly related to the use of carcass merit pricing.
  • Johnson´s legislation would threaten the viability of current and future investments in areas that produce fewer cattle or hogs than needed to maintain efficient and viable packing-processing operations. In deficit producing areas, packers attempt to control supplies of cattle or hogs to keep stable flows of the correct raw material through the plant. This legislation could threaten the future of processing operations in the very areas where producers have access to fewer buyers.
  • The bill would make it more difficult for producers to obtain financing for their operations. Many financial institutions require a marketing contract for a producer to acquire financing to grow and become more efficient.
  • The bill would restrict producer access to packer contracts and other risk management tools. By partnering with processors, producers can diversify their risk and share in the processor´s return.
  • The professors say prices for cattle would not increase as a result of passage of the bill. They say "There is almost no scientific research concluding packer ownership of cattle or packer actions through forward contracting and control of ownership of cattle hurts producers. It is a popular belief that concentrated processing industries have market power enabling processors to reduce livestock prices. But there is almost no evidence of this in the output from a broad and comprehensive research review on this subject." (Whose review, we wonder?)

Pat Goggins, President of the LMA and one of the men bringing a class action suit against IBP says, these professors all have something else in common besides their opposition to banning feeders from owning cattle just prior to slaughter. According to Goggins all of these professors, and 30 more, were on a list as to receiving grants from the various packers. They could not testify in the IBP case, says Goggins, because "They had already been purchased."

I´m not saying these are evil people. No, not at all. But I am saying they are reacting to current market forces within the university system. Anyone reading their comments would be well advised to remember the old adage: You get what you pay for.