JULY/AUGUST 2000 VOLUME 21 NUMBER 7 & 8


CORPORATE PIGS AND OTHER TALES OF AGRIBUSINESS

 
Flimflam on the Farm
The American Farm Bureau and the Betrayal of Family Farmers, Taxpayers and the Environment
 

This story is based on "Amber Waves of Gain: How the Farm Bureau Is Reaping Profits at the Expense of America's Family Farmers, Taxpayers and the Environment," by Vicki Monks, a report issued by Defenders of Wildlife. (c) 2000 by Defenders of Wildlife.

By Vicki Monks

When farm policy controversies erupt in Washington, D.C. or the U.S. heartland, one of the loudest voices inevitably belongs to the American Farm Bureau Federation. With its roughly 3,000 constituent state and county farm bureaus, and its claimed membership of more than 4.9 million members, the Farm Bureau has artfully portrayed itself as the voice and champion of U.S. family farmers for nearly 80 years.

The vast majority of the Farm Bureau's members, however, are either policyholders of one of numerous insurance companies affiliated with state farm bureaus or are customers of other Farm Bureau business ventures. Such members have no say in establishing or carrying out Farm Bureau policies and, in most cases, have no particular interest in agriculture (indeed, the U.S. Department of Agriculture says there are only one million full-time farmers left in the United States).

But there is no disputing the organization's influence. Surveys by Fortune magazine regularly rank the Farm Bureau as one of the top 25 most potent special interest groups in Washington, D.C. The organization is no less formidable a presence in state capitals, county seats and rural communities. And its influence extends into business and financial circles, to which it has major and profitable ties.

"They are an incredibly powerful lobby," says Sam Hitt of Forest Guardians, a Santa Fe, New Mexico, environmental group. Hitt has run up against the Farm Bureau time and again on environmental issues, such as protection of streamside ecosystems. "Legislators seem to go google-eyed when they see them walk through the door, and that's caused the loss of a lot of our wildlife heritage," he says.

The Farm Bureau spends considerable money and energy aggressively defending the interests of factory farms and fighting such environmental initiatives as the Endangered Species Act, the Clean Water, Clean Air and Safe Drinking Water Acts, wetlands laws, pesticide regulations and efforts to curb global warming.

One possible explanation for this agenda is that the Farm Bureau's views may have more to do with the organization's own financial interests than with the needs of family farms. The national, state and county Farm Bureaus also control some 54 insurance companies producing annual revenue of some $6.5 billion and cooperatives producing revenue of some $12 billion.

The Farm Bureaus also have investments in banks, mutual-fund and financial services firms, grain-trading companies and other businesses. Many of those businesses in turn own stock in oil and gas, pulp and paper, timber, railroad, automobile, plastics, chemical, steel, pesticide, communications, electronics and cigarette companies and even a nuclear power plant. The lists of stocks held by Farm Bureau companies read like a who's who of corporate heavyweights: Philip Morris, Weyerhaeuser, DuPont, Union Carbide, AT&T, Ford Motor, Raytheon, International Paper, CBS, Tyson Foods, Archer Daniels Midland (ADM) and many more.

Size Matters
Donna Buss lives just down the road from the Durkee Swine Farm, a confined animal-feeding operation with a record of pollution problems so serious that Illinois' attorney general at the request of the Illinois Environmental Protection Agency last year sued the owner for water quality and odor violations. A state inspector had found concentrated runoff from a waste lagoon flowing directly into a creek where fish kills had been reported.

Buss and her husband have lived in this Henderson County farming community for more than 20 years. "We'd never had problems with any of our neighbors' farming practices before," she says, until the hog operation started up in 1995. "The stench from this place is unbelievable," she says. "You'd think the Farm Bureau would be a little concerned about maintaining the quality of rural life."

But the Illinois Farm Bureau gave exactly the opposite response. In March 1998, its board voted to offer Durkee Swine Farm legal assistance. And when Buss and other neighbors, including several Farm Bureau members, filed complaints and wrote letters to local newspapers, she claims a delegation from the county Farm Bureau paid them a visit to pressure them to back off. "I don't know if this was scare tactics or what," Buss says.

If Buss is angry about the Farm Bureau's failure to take a stand against agricultural polluters, she is not alone. With the exponential growth of huge hog farms in recent years, rural residents in hundreds of communities across the nation have watched their quality of life deteriorate.

Instead of following the small hog farm tradition of using waste for fertilizer, confined animal-feeding operations (CAFOs) with tens of thousands of hogs pipe waste from these huge facilities into enormous lagoons that too often leak and nearly always stink. Leaking lagoons can contaminate water supplies with nitrogen, phosphorus, sediment, pathogens, heavy metals, hormones, antibiotics and ammonia. And as production becomes more concentrated, the pollution threat escalates [see "The Dirt on Factory Farms," page 24].

Farm Bureau leaders insist they do not side with the interests of corporate agribusiness over family farmers.

"We're taking the side of growth in the livestock industry," says Illinois Farm Bureau communications director Dennis Vercler. "We have to have a good political climate, a favorable public climate, a positive regulatory climate to allow this industry to grow. We've said we need to concentrate on making sure we have the ability to expand the size of the industry regardless of the size of individual operations."

Yet in nearly every state that has tried to curb the size of these mostly corporate farms or to control the pollution from them -- including South Dakota, Colorado, Illinois, Idaho, Maryland and Oklahoma -- the Farm Bureau has actively worked to defeat new laws, regulations or rules to control factory farms.

In Iowa, for example, a 1982 "right-to-farm" law in Iowa had protected farmers from public-nuisance lawsuits. As long as the farmers abided by state regulations, neighbors could not sue them over odors, contaminated runoff or other problems.

In September 1998, the Iowa Supreme Court struck down that law as unconstitutional. The court found that a bad stench from hog manure can be the equivalent of a physical invasion and therefore a violation of property rights. In essence, the court said, the government had been allowing hog farms to take odor easements across their neighbors' property without compensation or due process.

Despite its purported aggressive defense of "property rights," the Iowa Farm Bureau joined the hog operator in appealing the decision to the U.S. Supreme Court. In January 1999, the Supreme Court declined to hear the case.

The Farm Bureau saw preservation of the small farmer's right to protect the quality of his or her property as a potential evil. "This has opened a Pandora's box, and it does not bode well for Iowa's farmers," commented Iowa Farm Bureau president Ed Wiederstein.

In Illinois, where more than 160 new factory farms have started up in only the last two years, the Illinois Farm Bureau brags of "maintaining a positive environment for growth in the state's livestock industry through the defeat of a moratorium on new facility construction or expansion." The Bureau also opposed legislation to require annual state inspections of waste lagoons on big farms, odor control and a quarter-mile set-back between dead animal compost and homes. The legislature approved the legislation anyway, along with a measure allowing county boards to hold public hearings on new hog farms.

On the opposite side in most of these battles, other farming groups, including the National Farmers Union and the National Family Farm Coalition, have joined forces with environmentalists in sometimes successful efforts to curb the worst abuses of factory farms.

These farm groups say that factory farms have helped drive independent hog producers out of business. A glut of factory farm-produced hogs has driven down prices to Depression-era levels, they note; and while many of the corporate farms are owned by packers that deliver final products to stores -- where prices have not fallen -- and therefore can withstand or thrive with low hog prices, small farmers cannot survive with rock-bottom prices.


Hog Tied to Agribusiness
One reason why the Farm Bureau defends factory farms and corporate agriculture may be the extensive investment holdings Farm Bureau affiliates maintain in factory farm operations.

For example, when Continental Grain and Premium Standard Farms (PSF) merged in 1998, the combined company became the third largest hog producer in the nation, with 162,000 sows each producing 20 pigs a year. Continental Grain is also the largest U.S. beef feedlot operator, annually moving 405,000 head of cattle through six lots, and the company ranks second in the grain-trading business.

And with its 18,872 shares of stock in PSF, Southern Farm Bureau Annuity Insurance now has a stake in one of the biggest agribusinesses in the world.

Southern Farm is not the only Farm Bureau insurance company investment in big pork. Farm Bureau Mutual Insurance Corp. of Idaho and Western Community Insurance Co., both affiliated with the Idaho Farm Bureau, own more than $500,000 in bonds from Archer Daniels Midland (ADM), according to annual reports.

ADM, one of the largest U.S. agribusinesses, is also an emerging powerhouse in the pork industry. ADM owns 13.5 percent of IBP, the nation's largest pork packer.

In addition, the Idaho Farm Bureau's insurance companies hold 3,000 shares of stock in Tyson Foods, the nation's seventh largest pork producer with 2,470,000 pigs a year and the nation's top chicken producer.

The Farm Bureau's ties to the giants of the pork industry do not stop with insurance company investments. Farm Bureau affiliates are allied in joint ventures or direct partnerships with major players in the pork business.

For instance:

  • Cooperatives associated with the Farm Bureaus of Illinois, Iowa, Wisconsin, New York, Ohio, Indiana and Michigan jointly own two businesses with Farmland Industries. Farmland is the nation's fifth largest pork packer and sixteenth largest pork producer.

  • In 1997, Nationwide Insurance, with close ties to the Ohio Farm Bureau, merged with Farmland Industries Cooperative Service Co., a Farmland-owned insurance company.

  • Land O' Lakes, the fourteenth largest pork producer, with 1.2 million pigs a year, merged with Countrymark Cooperative in the fall of 1998. Countrymark is affiliated with the Ohio, Indiana and Michigan farm bureaus.

  • In Cass County, Illinois, where the Land O' Lakes cooperative runs a 90,000-pig operation, citizens filed a lawsuit after the co-op built a hog manure lagoon that extended into the water table. The Illinois attorney general asked Land O' Lakes to develop a groundwater monitoring plan.

  • Growmark, a cooperative controlled by the Illinois, Iowa and Wisconsin Farm Bureaus, has agreed to joint ventures with Land O' Lakes to market oil, gas, feed, seed, pesticides and fertilizer.

  • Growmark merged its grain terminal division with Archer Daniels Midland in 1985. Growmark traded its grain facilities for stock in ADM. Glenn Webb, chairman of the board and president of Growmark, sits on the ADM board.

Cheering Merger Mania
The Farm Bureau denies that its support for arguably anti-small farmer policies may be due in part to its financial interests in cooperatives and other big businesses.

"What's the influence in Farm Bureau [of Farm Bureau businesses on bureau policy]?" asked former Farm Bureau President Dean Kleckner. "It's zilch. They don't talk to me. They don't pressure me. If they tried to I would say 'buzz off.' They don't drive us. They don't help us pay the bills. Our dues pay the bills. Farm Bureau membership fees pay the bills, so there's no connection."

But doubts persist. Institutional self interest, for example, may account in part for the Farm Bureau's split personality when it comes to antitrust policy.

Worried about the concentration surge in agribusiness, delegates at the Farm Bureau's 1999 convention called for an "immediate investigation into the mergers that are occurring in the agricultural industry" and for "action that will protect producer interests." The resolution declared that "the continued mergers of agribusiness firms" threaten "the free enterprise system that is based on competition."

But when an Iowa delegate offered an amendment calling on Congress to "examine antitrust laws to determine if changes are needed to more effectively protect farmers," Farm Bureau leaders quickly shot the idea down. "Mr. Chairman, I have a terrible time with those additional lines there -- that whole 'examine antitrust.' Think about Capper-Volstead for a minute, where we're at there," said Wisconsin Farm Bureau President Howard Poulson, referring to the antitrust provision that exempts farm coops -- once small farmer-controlled ventures but now often huge enterprises that have moved into nearly every aspect of agricultural production, selling seeds, fertilizer, pesticides, crop advice, market news, livestock feed, antibiotics, additives, growth hormones, oil, gas, tires and batteries; marketing produce, grain and livestock on behalf of farmers; buying grain on behalf of traders; buying and raising livestock; slaughtering hogs and cattle; packaging meat; transporting products; providing financial services; and advertising all this. "I urge that we defeat this additional language," Poulson said. The amendment was defeated.

The Farm Bureau has actively lobbied against legislation that could put the brakes on what Senator Paul Wellstone, D-Minnesota, calls "merger mania." Wellstone's bill, introduced in 1999, would put an 18-month moratorium on mergers between big agribusinesses and set up a commission to review the issues of concentration and market power in agriculture. That sounds like just what Farm Bureau members voted to support at their last convention -- so the Farm Bureau did not at first publicly acknowledge its opposition. Instead, Farm Bureau lobbyists quietly circulated a letter to members of Congress asking them to oppose the bill.

Unfortunately for the Farm Bureau, Mike Callicrate of the Cattlemen's Legal Fund obtained a copy of the Farm Bureau letter and posted it on his website, "nobull.net."

Forced to admit that it had opposed the Wellstone bill, the Farm Bureau now offers the argument that a moratorium would delay better antitrust enforcement. In an article on the Farm Bureau's website posted November 16, 1999, Cheryl Stubbendieck of the Nebraska Farm Bureau called the Wellstone proposal dangerous, saying that "a moratorium can result in nothing of consequence happening until the time out is nearly over. American farmers can't wait 18 months for concrete action on an issue that so greatly affects their livelihoods."

Even some state Farm Bureaus aren't buying those arguments. In December, 1999, the Mississippi Farm Bureau unanimously approved a resolution condemning the Farm Bureau for opposing the merger moratorium. "The national Farm Bureau policy book is full of statements expressing concern about concentration of market power and monopoly in agribusiness," said Mississippi Farm Bureau member Fred Stokes, who introduced the resolution. "Yet [former Farm Bureau] President Dean Kleckner and the national staff consistently sell out their members and jump in bed with agribusiness." Stokes went on to characterize the Farm Bureau's lobbying activity as "a gross breach of faith and detrimental to the interests of producer members."

This challenge from the Farm Bureau's grassroots failed to shake the Farm Bureau's stance on the regulation of big business. At the January 2000 convention in Houston, Texas, the voting delegates again approved resolutions calling for investigations of mergers. The language used was nearly identical to that of the 1999 policies. But delegates also adopted a new policy opposing any moratorium on mergers.

Targeting Wolves
For years, the Farm Bureau has fought laws designed to protect wetlands, wilderness areas, drinking water and streams. It has lobbied aggressively to weaken pesticide regulations and the Endangered Species Act and has been instrumental in blocking Senate ratification of international treaties to safeguard biodiversity and counteract global warming.

Despite the many pressing issues in agriculture and the current economic crisis for family farmers, the Farm Bureau continues to rank opposition to wolf reintroduction at Yellowstone as one of its top 10 priorities. Defenders of Wildlife and other groups hoped to persuade the Farm Bureau to change its policy on wolves at the 1999 Farm Bureau convention, but delegates there adopted a new resolution calling for return of the Yellowstone wolves to Canada.

That plan was never a viable option, however. Interior Secretary Bruce Babbitt told Congress in 1998 that Canada would not take the wolves back.

Defenders of Wildlife ran newspaper advertisements asserting that removing the more than 200 Yellowstone wolves would be "tantamount to a death sentence" because there is no place for the wolves to go.

The Farm Bureau disputed this contention. The "Farm Bureau has never advocated killing any wolves," said Kleckner.

But Montana Farm Bureau executive vice president Jake Cummins acknowledged that the wolves probably would be killed if the Farm Bureau prevailed in its legal challenge. The government "should round [the wolves] up right now and ship them back to Canada where they came from," Cummins wrote in an essay. "But they won't. They'll avoid obeying the law as long as they can by stringing out the appeal. The wolves will keep killing livestock. In the end federal agents will have to shoot the wolves they brought in and all their offspring."

At a news conference during the Farm Bureau's 1999 convention in Albuquerque, New Mexico, Defenders of Wildlife president Rodger Schlickeisen accused the Farm Bureau of exaggerating the threat wolves pose to ranchers. "They picked the wolf as a particular target for their rhetoric, and they have tried to inflame the farming and ranching community well beyond any reasonable measure of the problems that the wolf represents," Schlickeisen told reporters.

Kleckner insisted that wolves and other predators cause ranchers grave economic harm. Losing even a few calves can make a huge difference in a rancher's ability to survive, Kleckner said.

To hear Farm Bureau officials tell it, these predators could destroy the ranching economy. "Our membership really wonders why the federal government is spending millions of dollars putting predators into rural areas where farm and ranch families are having a real difficult time hanging on to the family ranch," said Farm Bureau lobbyist Jon Doggett.

Although Defenders of Wildlife in the last decade has paid more than $100,000 to compensate ranchers for livestock losses to wolves, Doggett says ranchers do not believe they can always prove, or even know for sure, that a calf has been killed by a wolf.

But Defenders' northern Rockies representative, Hank Fischer, says determining whether livestock has been killed by wolves is not difficult.

"Wolf kills are way down on the list of things that harm livestock, way below being struck by lightning or hit by automobiles," he adds. In fact, wolves killed only seven head of cattle in 1996, according to government reports. Domestic dogs killed nearly twice as many cattle as mountain lions, bobcats, bears and wolves combined. "We are talking about a small level of predation," Fischer says.

Department of Agriculture statistics show that in 1996, the last year for which figures are available, all predators combined killed about 117,000 head of cattle -- a small number compared to the 417,000 lost to bad weather and more than 2 million felled by respiratory and digestive problems.

The magnitude of health-related cattle deaths surprised Farm Bureau leaders. "I've never heard that before," Kleckner said in a radio interview during the 1999 convention, "and frankly, I don't believe it."

Unnatural Divides
The hard-line dogmatism from the Farm Bureau is distressing to many family farmers and environmentalists, who would like to concentrate on the common goals of protecting the environment and preserving family farms.

"The Farm Bureau has tried to drive a wedge between the environmental community and the family-farming community, which really should be natural allies," says Defenders of Wildlife President Rodger Schlickeisen. "Family farmers protect the land, we want to promote their continuation. I wish the Farm Bureau would focus attention on bridging the gap, because we'd be the first ones to get up and on that bridge and meet them halfway."

Efforts to build such a bridge, however, seem unlikely as long as the Farm Bureau represents the interests of corporate agribusiness and the big business community generally, rather than those of family farmers.