Us: Department of Agribusiness By James Ridgeway Washington, D.C. Each year the U.S. Department of Agriculture spends about $350 million through two different programs supposedly both to subsidize small farmers and to help provide needy people with food. In addition, these schemes are meant to assure proper supply and demand in the market place. As several different congressional investigations have made plain, too little of this food ever reaches the poor. A recent study by Martha Hamilton of the Agribusiness Accountability Project suggests the money is no help to small farmers either. Instead this $350 million goes to a small group of big processing companies, some of which are owned in turn by larger conglomerates. The money, in effect, is part of a slush fund employed to strengthen agribusiness. The study reports that most of the food purchased by USDA is processed food, which means the money goes to the middleman processing operator, not to the farmer. It relies on the middleman to pass on the benefits to producers, but makes no attempt to determine whether or not processors it buys from are paying a fair price for the raw produce. Most of the products are produced under vertical integration. Commodities are produced under contracts, the terms of which are established before the middleman makes his deal with the Agriculture Department. In the case of products produced under vertical integration, processors, not farmers, determine how much of the products will be on hand to sell to the government every year. They welcome the USDA buying programs as convenient ways to jettison stocks of products that may build up due to poor management decisions. THE LARGEST suppliers to the, Agriculture Department include space age conglomerates, lumber companies and bus lines. Wilson & Co., the third largest meat packer in the nation and a subsidiary of Ling Temco Vought, was the largest supplier in fiscal 1971, providing $17 million of meat and poultry. Among other things, LTV owns Jones & Laughlin, the steel company. Wilson is a major force in building a concentrated agricultural industry. An annual report says of the company’s hog operations, “Wilson works with farmers and breeders to help produce this delicious Meat for Moderns. . . . Wilson pioneered a program of Forward Contracting to help stabilize prices and 20 The Texas Observer Hard Tames assure a more adequate raw material supply.” Wilson goes on to describe “integrating poultry production by building feed mills and hatcheries and establishing our own egg flocks.” Armour & Co., a subsidiary of Greyhound, is another major supplier. It sells Agriculture cut chicken, frozen turkeys, beef and pork, worth $5.2 million in 1971. Armour also peddles drugs, “personal care” items and institutionalized food systems. Sunkist Growers got $3.3 million in USDA contracts in 1971 for processed orange juice and frozen orange juice concentrate. The company accounts for 45 percent of the money spent by USDA for processed orange juice. Sunkist orchards are held by small groups of professionals, doctors, etc., who are in oranges for leisure time profiteering. One of its suppliers is the Pacific Lighting Corp. of Los Angeles, a public utility. Other companies among the top 10 USDA suppliers are Carnation Co., $13.2 million of canned chopped meat sold to the government through its Trenton Foods subsidiary; Oscar Mayer, the nation’s sixth largest meat packer, $12 million of canned and frozen meat; Tri/Valley Growers, $4.7 million in fruits and vegetables; Needham, a regional meat packer, $4.1 million in frozen ground beef; Sunsweet Growers, $3.9 million of dried prunes; Hygrade Food Products, $2.9 million in meat; California Canners & Growers, $2.1 million in processed foods and vegetables. Michigan Bean Co., a division of Wickes Corp., sold USDA dried beans worth $1.9 million. Wickes is a diversified company dealing mostly in lumber products. Former Secretary of Agriculture Hardin was once on the board of a Wickes subsidiary. Stokely Van Camp sold $1.8 million in canned pork and beans. Agriculture Secretary Butz was on the company’s board of directors at the time of his nomination. THE THEORY is that the purchases made by USDA will trickle down among farmers, but as Hamilton’s report indicates, this is not the case. Vegetables used for processing \(as opposed to the and boilers are no longer produced by independent growers, who, acting individually occasionally create price depressing surpluses. Instead 95 percent of all vegetables grown for processing are produced under vertical integration. Boiler production is even more integrated. Only three percent of total national production is raised independently. “Production of other commodities purchased by USDA under surplus removal programs is becoming increasingly integrated as well. Vertical integration in the production of every commodity the programs handle \(except potatoes and to 1971.” The study adds, “Unless USDA buys from cooperatives which have vertically integrated from farming into processing, financial ripples from the money spent may never reach the farmer. In the long run, very little of the money USDA spends on surplus removal and school lunch purchases get there. Just as the farm-retail spread accounts for most of the consumer food dollar, the farm-processor spread accounts for most of the money USDA spends in these programs. In fiscal year 1971, USDA paid an average price of 11.5 cents per pound for canned corn purchased under Section 32 \(one of the programs average price of corn for canning received by farmers was 1.2 cents per pound. Of the $1.1 million USDA spent on corn under Section 32, only $11,084 or 10.4 percent, ended up in the producers’ hands. The rest went for transportation, processing costs, processor’s margins and other refinements.” National D. Fence A giant rocket squats in the darkness of Arkansas, armed and quivering on its faintly glowing alcoholic loyal American aluminum ass. Its needle nose pokes into radar-illuminated heaven, potent with little impatient atoms buzzing behind a shell of saintly purest white. As a precaution against dirty Red saboteurs, the firing switch is at the local zoo, where they would never think to look: in the monkey house. G. N. GABBARD Reno
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