Robbing Peter to pay farmer Bob

If you were still laboring under the delusion that the implosion of the Soviet Union signaled the end to the notion that central governments could redistribute wealth more equitably than the free market, you probably suffered a rude awakening last week with the signing of an $83 billion farm bill by President Bush.

After all, it was the Kremlin that was most famous for command-and-control agricultural policies that determined what crops farmers planted and how much they were paid. The result, of course, was hunger, food lines, lack of production, shortages of everything the government tried in vain to produce through coercion.

Well, the fall of the Soviet Union was a decade ago, and if we learned any lessons from it, they are apparently long forgotten. The U.S. government is meddling like it has never meddled before in matters that should best be left to the wisdom of the marketplace.

Six years ago, you might remember, the Republican Congress championed the Freedom to Farm Bill. It was designed to curtail government payments to farmers. Along with those subsidies comes control. It always does and it always will.

Despite the limiting of those subsidies for the last six years, I'm not aware of any food shortages. I'm not aware of any skyrocketing food prices. Yet, these are the very reasons supporters of agricultural subsidies cite for continuing them.

The real reason they continue, however, is good, old-fashioned pork-barrel politics. This was demonstrated clearly by President Bush last week when he signed the bill early in the morning "ensuring wide coverage by farm broadcasters while minimizing exposure elsewhere in the country," as the New York Times noted.

One senior Bush official told the Times it would have been "political suicide in the November election" to stand in the way of farm-state politicians who demanded these huge increases in federal support. So glad to know President Bush makes such decisions on high principles, aren't you?

This bill is designed to increase farm subsidies by some 80 percent. In real-dollar terms, however, the costs are expected to be much higher than the $83 billion earmarked by the bill. The 10-year plan calls for $190 billion in new spending.

The new subsidies, of course, also have the effect of closing foreign markets to U.S. farm goods. For six years, the U.S. has argued with foreign governments to lower or eliminate their subsidies, just as the U.S. had done. President Bush's decision makes a joke of the once highly touted free-trade issue.

Of course, the Congress never actually eliminated farm subsidies after 1996. Every year the Congress passed "emergency spending" bills that transferred wealth from ordinary working people to the huge agribusinesses that promote this rural form of corporate welfare.

That's what it's really all about – robbing Peter to pay farmer Bob. But you wouldn't recognize farmer Bob, in this case. He's not the family-farmer stereotype. Actually he is the CEO and stockholders of Archer Daniels Midland Company, one of the largest businesses of any kind in the world.

This bill is a rip-off of the American people. It will mean higher taxes, more coercion, less freedom. It represents two steps forward, after 1996's one step backward, toward the Sovietization of the American economy.

Thank you, George Bush. Would we have gotten anything different from Al Gore? I doubt it. But that was the choice we had. America narrowly chose Bush. Ever since, on the domestic issues, his administration has governed to the left of Bill Clinton and Al Gore. The insiders evidently think this is good politics. I distinctly remember Bush's father thinking the same way and increasing taxes after making a solemn vow against such an action. He was a one-termer, also after achieving record-setting approval ratings for his conduct of a foreign war.

Those who don't learn from history are doomed to repeat it, they say. I guess surrounding himself with so many of his father's advisers and top officials has not helped Bush to avoid making the same mistakes.

There are many good and sound and practical arguments against legislation like the big farm bill signed by Bush. But the best argument of all is the most obvious one – the one that is never even considered in modern American political discourse: "Read my lips! It's unconstitutional."

I wanted to post this article to highlight some of the reasons farmers are going broke. We are building a system that is a lot like the old Soviet model with the large corporations controlling price. If you get in bed with these folks you benefit in the short run but in the end you will be a surf on your own land. These corporations have learned that its cheaper to own the farmer than it is to own the land. Mike Callicrate wrote this article, his address is at the bottom.
jonefab

A Food System Gone Wrong
By Mike Callicrate

Why don’t you sue Wal-Mart?br> When I introduced myself as a plaintiff in the IBP antitrust lawsuit to John Tyson, Tyson Foods, at this year’s NCBA convention, he countered to me, “Why don’t you sue Wal-Mart.” He said, “The retailer is the problem.” I told him, “I agree, your right, but because of the Illinois Brick ruling, preventing suit by an indirect seller, like myself, I have to sue you and you have to sue Wal-Mart.”

For the first time in our history big retailers have become large enough to dictate terms to giant processors…Probably the main motivation behind the Tyson-IBP deal: to match power with and leverage Wal-Mart, now one of the top two U.S. food retailers.

Price Reporting – Keeping the unfairness and corruption a secret
Cattlemen, you’re being cheated – big meat packers and big retailers are stealing your money and your livelihoods. Wal-Mart, Kroger, Safeway, and Albertson’s tell the processor what they will pay. You, the farmer and rancher, get the leftovers. Do you really want to know how much and how fast this theft is occurring? If better price reporting tells you how much the packer is stealing, is there anything that you can do about it? Probably not. Not as long as our designated livestock market policeman, Ann Veneman, is Secretary of Agriculture, and not as long as meat packers control her and the USDA. Last week, in the final hours of Friday’s business, cattle owners finally gave in and dumped their cattle for an outrageously low $70.00 per hundredweight. Record high retail beef prices justify $90 live cattle. To add insult to injury, the packers called for delivery of many of those cattle early Monday morning, proof of how short bought and needy they were. Of course, the blindfolded cash cattle sellers couldn’t have know it

Today, thanks to the power of the big meat packer big/retailer cartel, only the wealthy, well-organized packers and retailers have money and information. Uninformed, weak, and desperate sellers of live cattle only have feed bills, hot weather, and cattle that have to be sold.

Why are rural communities dying? It is called stealing!
Never before has there been so much money in the food system, and never before has so little of that money gone to the producer of the food – the farmer and rancher. Retailers are selling beef at record high prices with record high margins and profits. Packer-processors are also posting record margins and profits.

Contrary to the packer-retailer, and their supporting propaganda machine, the percentage loss of the consumer beef dollar to the producer at the ranch gate is due to market power, not value-added or extra services provided. USDA uses non value-added, raw choice beef for their comparisons. The farm and ranch gate has lost 20% of the consumer beef dollar at the same time as four-firm packer concentration has increased from 36% to over 80%. After subtracting the costs to convert boxed beef to retail ready product, it is clear that the big retailers are making over $500 per head profit while independent cattle feeders and ranchers go broke. Meat cutters are paid less per hour today than they were 20 years ago. Go to: meatpricespreads (http://www.ers.usda.gov/briefing/foodpricespreads).

Producers follow their livestock to slaughter
USDA is fully armed with this shocking and incriminating evidence, plus actual evidence of many antitrust violations including, collusion, price fixing, price discrimination, and retaliation. Yet USDA continues to follow its long history of endorsing a destructive centrally planned, industrialized agriculture in abdicating its duty of policing and protecting the market place. USDA, through their failure to act, instead promotes more concentration and control into fewer hands, enriching their agribusiness friends and destroying the rural landscape. History repeatedly reminds us that the single greatest threat to a free society is concentration of power and wealth into the hands of a few.

USDA Secretary Ann Veneman told an interviewer on the Kansas KSN television network this week, when asked about concentration, “There are many opportunities for producers to become part of the supply chain of the big companies.” In other words, opportunities to become indentured slaves for her agribusiness bosses. By abdicating her duty to enforce the P&S Act, and continuing to keeping livestock prices and terms of contracts secret through the 3-60 rule, Secretary Veneman and others in government are facilitating the packer- processor-retailer cartel in dealing producers in both the pork and beef industries the same crushing death-blow already dealt enslaved poultry growers.

Beef packers continue to illegally give undue preferences to their captive supply providers, some in excess of $100 per head, explaining why the advantaged feeders continue to profit and expand at the same time as smaller independent feeders go out of business…Precisely the tactic used in the early integration of poultry.

Break up the concentration and consolidation – A food system gone wrong!
The meat packer-USDA cartel has snookered us at every turn, including stealing mandatory price reporting legislation, killing legislation to suspend big agribusiness mergers, defeating contract grower bill of rights laws, settling iron clad meat packer antitrust lawsuits with impunity (USDA vs. Farmland National), and misreporting boxed beef prices.

When we lose our free, open, and competitive markets, we lose our freedom. Rural communities, the source of a safe and sustainable food supply, die along with independent farmers and ranchers. All of America is losing with our food supply in the control of a few predatory, profit driven companies. It is time to break up the big multinational agribusiness companies beginning with the meat packers – Tyson/IBP, Cargill, and ConAgra. It is also time to apply the same criminal penalties to corporations and their executives that apply to individuals.

Whether you are a farmer, rancher, or consumer, you may want to ask yourself the question: Is your freedom worth fighting for, or would you and your children rather be serfs?

Mike Callicrate
P.O. Box 748
St. Francis, KS 67756
mike@nobull.net
www.nobull.net

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