Politics, As Usual

Politics, As Usual
— by Lee Pitts

According to news reports, at a White House ceremony Vice President Al Gore, the man who would be President, let his true colors show. And they weren´t red, white, and blue.

It seems Gore was presenting an award to a Colorado FFA member when he asked what field the honoree intended to go into. Upon hearing the young student wanted to go into production agriculture Gore reportedly implied that field wasn´t too fertile. He allegedly suggested that the FFA member should develop other plans “because production agriculture is being shifted out of the U.S. into the third world.”

We shouldn´t be too surprised at Gore´s statement, after all, he helped write the United Nation´s Agenda 2000 which calls for just such an outcome.

Sadly, much of what we do in agriculture is effected by politicians and bureaucrats in Washington. If that isn´t depressing enough, consider these recent actions that will go a long way towards deciding if Gore´s career advice was prophetic.

The Road Not Taken

On October 13 Bill Clinton attempted to paint himself as a “Green President” by prohibiting road building on 40 million acres of U.S. Forest Service land. According to the White House, “these remote lands produce high quality drinking water, provide critical wildlife habitat and offer extraordinary recreation opportunities for hikers, campers and anglers.” Who, by the way, will have a much more difficult time gaining access to such areas without any roads.

In addition, Clinton called on Congress to fully fund his Lands Legacy initiative which would have taxpayers spend between one billion and $2.3 billion per year, presumably forever, to buy up private lands that need protecting. This despite the fact the federal government already owns one third of America´s land mass and state government´s own another 12%. And the feds aren´t doing a very good job of managing the land already under its control. Currently there is a backlog of $10 billion worth of “to do” work on the land it´s already responsible for.

And We All Lived Happily Ever After

When measure HR 1906 was sent to Clinton for his signature it contained a lengthy provision that would require mandatory price reporting for cattle, swine and lamb. The NCBA trumpeted its victory and emphasized that mandatory price reporting never would have happened without their efforts on behalf of cattlemen. End of story?

Not quite. Unfortunately, the legislation if approved, will preempt state laws passed earlier in the year which were much tougher. NCBA´s bill requires daily reporting of cash or spot market prices while allowing packer procurements through forward contracts to be reported weekly. Dr. John Helmuth says that NCBA´s bill creates a strong incentive for packers to shift even more towards captive supply because the reporting requirements are less stringent.

Someone once said you never want to see sausage or laws being made because it´ll make you sick. In an interview in Lobbyists and Advocates, NCBA´s Washington lobbyist, Chandler Keys III, described how the mandatory price reporting bill came to be. “While the packers initially abhorred the idea of mandatory federal price reporting system, they were faced with a growing number of state reporting laws. So the cattlemen (NCBA) eventually found the packers open to their suggestion that the groups work out an agreement.” According to Lobbyists and Advocates, “After months of negotiation the two sides hashed out a deal they took to the staff of the Senate Ag Committee.” Keys said the effort “was aided by the fact that lobbyists could tell that both producers and packers supported the reporting requirement.”

The Grease of Politics

In the same article Keys described NCBA´s lobbying effort. He said the NCBA has increased the amount of contributions to federal candidates from about $140,000 during the 1983-84 cycle to about $368,000 during 1997-98. More than three fourths of the contributions went to Republican candidates. Keys told Lobbyists and Advocates that his lobbying budget consisted of three million dollars and a staff of 23.

Pulling A Babbitt Out Of The Hat

More than 20,000 public lands ranchers won a huge victory in October when the Supreme Court agreed to hear their challenge to Clinton´s 1995 regulations relating to 170 million acres of federal range land in 13 states. The regulations became known as “Rangeland Reform” and the 1996 case against them as “Public Lands Council vs. Babbitt”. The Tenth Circuit Court originally upheld the constitutionality of Rangeland Reform but this action by the Supreme Court means the issue will be revisited.

The Supreme Court voted to study the appeal on the basis that Rangeland Reform violated a 65 year old law and threatened the livelihood of thousands of public lands ranchers. Arguments in the case will be held this winter with a ruling expected by late June. “If successful this case will send a strong message, ” said the California Public Lands Council, “that regulations cannot be used as a tool to circumvent Congress or existing law.” It is expected to cost $250,000 to litigate the case.

Sound Familiar?

The Justice Department is busy investigating more than two dozen price fixing cases, most of which involve food additives, supplements and vitamins. According to Purdue´s John Connor, an expert on price fixing, we can expect more of the same in the future as monopolists conspire to set artificially high prices for their products.

In 1996 Archer Daniels Midland paid a $100 million fine for fixing prices of feed supplements. In the same year Bayer was fined $50 million for fixing the prices of food additives and this year BASF AG, a German company, paid $225 million for fixing the price of vitamins. Connor said the nature of food additive business lends itself to price fixing cartels because the smaller number of companies can organize easily. “There are just two, three or four producers worldwide for each of these chemicals,” said Connor. Adding to the ease of price fixing is that prices for food additives are priced in individual contracts, not the open market. “Creation of International trade associations is another cause of price fixing,” said Connor. “These trade associations provide data about their industry to association members. That information can lead to a cartel being established.”

Own A Pig, Go To Jail

Four members of the Senate have sponsored a bill that would ban packer ownership of livestock. Senator Tim Johnson´s (SD-D) bill is designed to stop the trend toward vertical integration. Johnson says the current situation is anti-competitive. “Packer ownership of livestock increases the likelihood of price manipulation in the marketplace. As a result of having slaughter livestock supplies locked up through captive supplies, meat packers do not have to bid competitively for all of their slaughter needs.”

The Johnson bill would require retroactive divestiture of packer ownership in livestock. Johnson says that there would be no Constitutional problems with a retroactive ban on livestock ownership as long as the packers are given time to divest of their ownership positions. Pork packers would be given 18 months to phase out of hog ownership. His bill would make the proposed merger of Smithfield and Murphy, the marriage of the largest packer and grower, illegal.
The bill would allow packers to own animals up to 14 days in advance of slaughter in order to insure an adequate supply, and it does not outlaw forward delivery contracts between producers and packers. It exempts poultry and would apply only to cattle, hogs and sheep. Another exemption applies to producer-owned co-ops that are also in the packing business, as long as the co-op is controlled by livestock producers who deliver their own livestock to the marketing organization.

The AMI, the packers trade group responded: “We are opposed to that kind of government intervention in the marketplace. Telling packers what they can own would make meat more costly to consumers and hurt the U.S. in world trade.”

Tim Johnson feels that current anti-trust laws fail to address the concerns of livestock producers in the marketplace. “We are at a crossroads in the structure of agriculture,” Johnson said. “We face a choice between the corporatization of agriculture and a fight for free enterprise. I gladly and proudly cast my lot with the free enterprise of family agriculture that has served our country so well.”

Down But Not Out

In October Senator Byron Dorgan of North Dakota and Senator Paul Wellstone of Minnesota each introduced bills in the Senate that would temporarily ban agribusiness mergers. The Agribusiness Merger Moratorium Act of 1999 would declare a moratorium of at least 18 months, or until Congress enacts legislation that specifically addresses the concentration of agriculture, whichever comes first. Both bills were introduced as a result of Cargill being allowed to swallow up Continental´s grain division. Dorgan said, “When Continental Grain and Cargill are allowed to merge something is wrong with our antitrust laws, and I want to fix it.”

Tom Harkin of Iowa joined Wellstone in support of his bill and compared market concentration to a boxing match “Where one contestant has their hands tied behind their back and they are being pummeled. That´s sort of what the farmers are like now with the agribusiness concerns. The Justice Department is supposed to be the referee and for some reason they are not stepping in aggressively enough, or perhaps the rules are not quite fair.”

Food Fight

USDA officials have devised a plan that will allow the American meat industry to resume shipping “hormone free” beef to Europe. The plan requires American producers to develop “written programs” based on USDA guidelines to document that no hormones were used in the beef´s production. The U.S. had an annual quota to ship 11,000 metric tons of hormone free beef to the EU since 1989, when the EU first banned beef from cattle raised with hormones. Last April the EU reported that their tests revealed that 12 percent of the shipments of so called “hormone free beef” actually contained residues of artificial hormones. The U.S voluntarily suspended shipments because of the deficiencies. At the same time we retaliated for the ban on American beef by imposing punitive duties on $117 million worth of EU goods.

The Terminator Lawsuit

A Washington DC group founded by Jeremy Rifkin is putting the final touches on a multi-BILLION dollar lawsuit against companies like DuPont, Monsanto and Novartis for their role in producing genetically altered food crops. It promises to be the largest antitrust suit ever brought, with the possible exception of the Microsoft case.

This action represents the first global challenge to controversial genetically altered seeds and modified crops. Several citizen groups and twenty American law firms have joined together in their resistance to “terminator seeds” and genetically altered foods. The lawsuit will no doubt feature a lively debate on how our food is produced, including topics such as industry concentration and the ability of multinational companies to take over world food production.

Don´t Cry For Me Argentina

Brazil is expected to be able to comply with U.S. sanitary restrictions and begin exporting fresh beef to the United States and Japan by early next year. They are currently in the process of negotiating a quota with the United States.

Brazil has the largest commercial cattle herd in the world at 170 million head and was previously denied access due to health restrictions. Brazil has more cows than people and produced 6.3 million tons of beef last year, tripling Argentina´s output. The USDA´s Animal and Plant Health inspection Service has already made its final visits to Brazil in preparation for their lifting of restrictions.

Brazil hopes to be the largest beef exporter in the world by the year 2002.

Not On Their Christmas List

On September 20, Federal District Court Judge John Tunheim, issued a temporary restraining order ordering USDA NOT to release the names, addresses and phone numbers of those people who signed petitions seeking a referendum on the mandatory pork checkoff. The National Pork Producers Council requested the list and appealed the judge´s decision. The USDA has basically said they would not release the names until the courts have made their final ruling. By then the issue could be resolved by a referendum. (Even with the USDA dragging their cumbersome feet on the vote).

The Livestock Marketing Assn. filed a Friend of the Court brief supporting the Campaign for Family Farms which did not want the names released. The LMA did so in part because they felt the NCBA would ask for the list of 140,000 names, addresses and phone numbers of beef producers who have reportedly signed the petitions for a referendum on the beef checkoff. Our best information suggests those names should be handed over to the USDA about the time you read this article.