Glickman: Cottoning Up to China
Depriving China of Most Favored Nation trading status would be "a catastrophe" for U.S. agriculture, according to U.S. Department of Agriculture Secretary Dan Glickman. Speaking before the National Cotton Council's board of directors meeting in Washington Glickman pointed out the cotton industry, of which China is its No. 1 market, would suffer.
"I can tell you that we have nothing to gain and everything to lose by walking away from China right now," Glickman said.
On June 24 President Clinton's recent decision to renew China's MFN status was approved by the House of Representatives over the objections of the Christian Coalition and liberal Democrats.
Glickman protested that if the U.S. doesn't maintain normal trade relations with China, it will not only be hurt economically, but will be hurt by having no influence over China's human rights policies.
"If we're concerned about human rights, if we're concerned about the pace of democratization, we have to keep our leverage, and that is economic leverage. Without (trade), we've got nothing to bargain with,' he said.
Over half of China's cotton imports - valued at more than $1 billion - comes from the U.S. That figure will likely rise in the coming years, Glickman claims, as more cotton-growing land in China is shifted to food production.
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Pointing out that there were 30% fewer small farms in 1993 than there were just two decades earlier USDA Secretary Dan Glickman has announced plans to create a National Commission on Small Farms. Farmers, academics, financial leaders and others will be asked to hold hearings around the country and then offer recommendations for inclusion in the fiscal 1999 budget.
In recommending such action Glickman stated that the ability of rural Americans to make a decent living on small farms across the USA is being threatened due, in large part, to big, corporate-owned operations. Small farms, he noted, still comprise two-thirds of the 1.9 million U.S. total, but account for just 4% of the nation's agricultural sales.
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Soybean stockpiles, projected at a 20-year low, scarce and too expensive to buy in the U.S., according to industry sources, "have forced the soybean-processing industry to idle about one-third of its capacity," according to a June 4 Cargill news release, and thereby made it necessary for the world's largest grain trader to import Brazilian beans this summer.
The tactic, as the WALL STREET JOURNAL's Aaron Lucchetti notes, "politically sensitive because of the possible negative implications for U.S. farmers, showed traders that soybean processors such as Cargill plan to sidestep high prices on U.S. soybeans by looking abroad." The most immediate reaction was on the Chicago Board of Trade where July soybeans fell the daily allowable limit of 30 cents, ending the June 4 session at $8.30 a bushel. The last week of May soybeans in Brazil's 26-million-ton crop traded at a discount of about 50 cents-a-bushel to U.S. beans.
Cargill, according to company spokesperson Linda Thrane, was worried that lacking the supply of soybeans to crush into animal feed and oil the nation's largest private corporation with 1996 sales of $56 billion and profits of $902 million wouldn't be able to fulfill contracts to provide soymeal to dairy, poultry and hog farmers in the U.S..
The grain company took its case directly to U.S. farmers, Ms. Thrane acknowledged in talks with the WALL STREET JOURNAL, explaining that the Brazilian soybeans "are needed to keep livestock and poultry herds at high levels."
Chicago Board of Trade's soybean pit traders estimated that Cargill plans to bring in four or five cargoes, or about 200,000 metric tons, of soybeans into the U.S. Already Owensboro Grain Co. in Owensboro, Ky., reportedly brought in to the U.S. earlier this spring about 50,000 tons.
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Jack L. Williams, a Washington lobbyist for Tyson Foods, the nation's largest poultry producer, who was found guilty on two counts of making false statements to federal investigators by a jury in March, 1997 has been granted a new trial by U.S. District Court Judge James Robertson.
The lobbyist was convicted of lying in the government's probe of favors allegedly received by former Agriculture Secretary Mike Espy. Williams faced a sentence of up to five years in prison and a fine of up to $250,000 on each count brought by Donald C. Smaltz, independent counsel in the Espy investigation.
Federal prosecutor Robert Ray told the court in his closing arguments at the trial that Williams ''lied because he had to protect what he knew'' of his involvement in providing favors on behalf of Tyson Foods to Espy and Espy's girlfriend, Patricia Dempsey. Those favors included $1,009 in air travel and a $1,200 scholarship for Dempsey, as well as tickets, meals and limousine rides for Espy and Dempsey for a 1994 National Football League playoff game in Dallas.
The judge set the verdicts aside after Williams' attorney argued that prosecutors did not disclose that an FBI agent who was one of their chief witnesses had committed perjury in the past. A new trial date was not set.
Espy, who resigned from the Clinton Cabinet in December 1994, has steadfastly denied any wrongdoing, however, Smaltz has said his investigation is continuing. Don Tyson, the retired chairman of the Springdale, Ark.-based agribusiness, was questioned before a federal grand jury last month in the Espy probe, but has declined to discuss his closed-door testimony.
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Originally the Occupational Safety and Health Administration had proposed penalties totaling more than $3.8 million against the DeCoster Egg Farms of Turner, Maine for health and safety violations. However, OSHA has now agreed to a $2 million fine with the stipulation that DeCoster will have to pay the full amount if it fails to meet standards set out in the agreement.
OSHA had cited DeCoster in 1996 for health and safety violations, including some relating to its trailer park, which housed DeCoster workers where employees were living amid rat and cockroach infestations, and units which had severe sewage problems.
DeCoster has also agreed to pay $21,000 to settle claims brought by the government for wage and hour violations involving 105 of its workers, according to the U.S. Department of Labor. Then-Labor Secretary Robert B. Reich likened conditions to those at big-city sweatshops.
Current Secretary Alexis M. Herman agreed, citing such violations as unguarded machinery, electrical hazards, exposure to harmful bacteria and other unsanitary conditions that she characterized as "simply atrocious." Such conditions at the farm and at housing units it provided for workers triggered boycotts of DeCoster eggs by several large supermarket chains.
If the compliance rate of standards set in the settlement falls below 90 percent, DeCoster will have to pay the remaining $1.8 million in penalties. An independent consultant will make an unannounced inspection at the farm within a year.
DeCoster is among the top ten egg producers in the nation and controls half of the nation's brown egg market. His farm's 4.5 million hens lay more than 21 million eggs a week. DeCoster operates businesses involving eggs, poultry, hogs and grain in Vermont, Massachusetts, Rhode Island, New York, Delaware, Ohio, Kentucky, Minnesota, Iowa and Maryland.
This is not the first time, however, that DeCoster has had problems with health and safety inspectors. In New York in 1988 the state health commission put an embargo on DeCoster's eggs after some 500 cases of gastrointestinal illnesses from eating the eggs, which were contaminated with salmonella bacteria, were reported. The same year over 100,000 maggot-infested dead chickens were found on DeCoster's farm ---- birds left over from barn fires the previous year --- after a neighbor followed the stench.
In recent years DeCoster has been the center of controversy in Iowa as he has attempted to construct massive corporate hog facilities in that state.
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Smithfield Foods has been found liable for repeatedly dumping illegal levels of hog waste into a Chesapeake Bay tributary over a five-year stretch -- 5,330 violations. The Environmental Protection Agency is currently seeking fines of up to $125 million while the state of Virginia has sought only a $2 million fine.
In January of this year the former manager of Smithfield's waste-water treatment plant was sentenced to 30 months in federal prison for polluting waterways, destroying documents and falsifying records.
The former Smithfield official pleaded guilty to 23 criminal violations of the federal Clean Air Act. According to a report in the RICHMOND TIMES DISPATCH, Terry L. Rettig, claimed that his bosses at Smithfield had encouraged him to "cook the books" to conceal pollution violations and that state regulatory agencies failed to find damage because the agencies had given the giant agribusiness as much as two weeks' notice before inspections. Smithfield and state officials have denied the former manager's claims, but Rettig's lawyer says his client is prepared to testify in any criminal or civil cases filed against Smithfield.
Smithfield Foods, with 1996 sales of $2.3 billion, is a producer, processor and marketer of pork and has been the nation's leader in the vertical integration of the pork industry, second only to IBP in pork processing capacity. It has also been a leader in the move to genetically improve hogs for leaner and better tasting meat. Its brand names include: Smithfield Lean Generation Pork, Smithfield Premium, John Morrell, Gwaltney, Patrick Cudahy, Esskay, Jamestown, Valleydale, Dinner Bell, Kretschmar, Tobin's First Prize, Lykes, Peyton's Realean and others.
The Federal Government suit against Smithfield Foods and two of its subsidiaries is based on its polluting of the Pagan River at the company's meat plants in Smithfield, Va. The E.P.A. says it filed such a suit because the Virginia suit had sought far lighter penalties than the agency wanted.
Virginia Governor George Allen, in commenting on the criticism that the state has been easy on such polluters, notes: "I guess what they would prefer, these people who are carping and whining, is we just shut down these businesses, run them out of the state and all the people who work for them lose their jobs."
The close by WASHINGTON POST, however, in a June 8 editorial observed: "Gov. George Allen's disdain for federal water cleanup runs deep. Labeling the Environmental Protection Agency as an interloper, he talks the talk of enforcement but weakens any serious action against polluters. A federal judge has so ruled in a case involving Virginia's largest pork producer -- also the fattest contributor to the governor's efforts to elect Republican legislators. . . .
"Gov. Allen insists that Virginia, not the EPA, can best rule the state's waters. But in finding Smithfield liable, U.S. District Judge Rebecca Beach Smith in Norfolk dismissed the company's claim that Virginia is the appropriate enforcement authority. Judge Smith said that federal authorities were entitled to seek fines because state law had fewer "teeth."
"I think that it is unfortunate that you have a lack of leadership in the state," Carol M. Browner, Administrator of the E.P.A told the NEW YORK TIMES last January. "There is a disregard for the requirements of Federal laws, and I think there is a belief on the part of some in Virginia that ignoring the environment and public health standards is what the business community wants."
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Despite a recent drop in supermarket prices, Los Angeles, California's supermarket milk prices for consumers continue to be high. In late May, Consumers Union surveyed 77 food markets in Los Angeles and Orange Counties and found that specific gouging by supermarket chain retailers, continues to be a primary cause of high milk prices in the Los Angeles area. The survey is the second one of Los Angeles area milk prices that Consumers Union has conducted in the past seven months.
The latest survey of LA milk prices showed an enormous range of prices at which Los Angeles consumers pay for a gallon of milk. Prices varied from $2.19 per gallon at the low end to $3.99 per gallon at the high end, a difference of $1.80 (or 82%) per gallon.
"Large supermarket chains in the Los Angeles area continue to charge among the highest prices in the area -- as much as $1.80 more for a gallon of milk than the local Mom-and-Pop grocers," Elisa Odabashian, Policy Analyst for Consumers Union and the author of the report points out.
Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization, serving only the consumer.
"There is little competition on milk between the big chains, as evidenced through the lack of advertising and price-cutting . . . Milk retailers know that there is no reasonably-priced, nutritional alternative to milk, particularly for the healthy growth of children, and that consumers will continue to buy it at almost any cost," Odabashian said.
"Supermarkets move a great volume of milk and most of them process the milk themselves, driving down their costs considerably. The fact that supermarkets are charging so much more for a gallon of milk than many smaller markets runs counter to economic sense, and certainly to what most consumers expect. Retailers are taking advantage of consumers' need for milk."
While most major supermarket chains accept food stamps and Women Infant and Children (WIC) milk coupons, the smaller markets do not accept food stamps, and few accept WIC milk coupons.
"The poorest consumers know that their coupons will be accepted at the major chain supermarkets. So tax dollars for food stamps and WIC coupons are being spent on the highest-priced milk, enriching the biggest retailers," Odabashian charged.
"When food dollars are wasted on excessive milk prices, poor children get less food to eat."
While many Los Angeles area supermarkets dropped their retail milk prices by 6 to 10% after Consumers Union's last survey in October 1996, a decrease in response to a 20% drop on February 1 in milk farm prices. Stores lowered their retail prices by $0.22 to $0.40 (to the current $3.55-$3.99 retail price per gallon). The price farmers were then receiving for milk dropped $0.30 (to $1.26 per gallon) in February. Farm prices for milk dropped another 9% (to $1.16) on June 1, 1997.
"We commend the retailers for the recent drop," Odabashian adds, "but we must point out that when the farm price increases even a penny, grocers generally raise the price to consumers quickly and exponentially. When the farm price drops, as it has three times in the past two years, grocers have slowly passed on a fraction of the decrease to their customers."
"If that historical trend continues," she adds, "the large gap between the farm price and the price consumers pay will steadily grow. The gap translates into higher costs to consumers and higher profits for grocers. We encourage retailers to give consumers a break and pass along the June 1 farm price decrease."
Currently the supermarket industry in Southern California is dominated by Safeway Stores, who recently bought up a remain financial interest in Vons, Ralphs and Lucky Stores.