Archive for the ‘Agribusiness’ Category

Taking Corporate Farmers Off the Dole

Thursday, May 5th, 2011

The signal from House Majority Leader Eric Cantor that Republicans are ready to consider cuts in farm subsidies may be a false alarm, like the one that Speaker John Boehner recently set off with regard to oil industry tax breaks.

It’s quite possible that once Cantor and his colleagues take a closer look at the agricultural giveaways, they will realize that the biggest recipients are not traditional farmers but large corporations—the GOP’s primary constituency these days.

Unlike the oil subsidies, which consist of tax preferences available to the entire industry, farm subsidies are direct payments from Uncle Sam to specific parties. A large portion of those payments go to a small number of beneficiaries. Of the $247 billion paid out since 1995, one-quarter of the total has gone to the top 1 percent of recipients, and three-quarters to the top 10 percent.

Thanks to the efforts of the Environmental Working Group—whose president Ken Cook describes the subsidy system as a “contraption that might have sprung from the fevered anti-government fantasies of tea party cynics if Congress hadn’t thought it up first”—you can go to a website and search by name or ZIP code to see exactly how much has been paid out to any individual or business.

EWG also helpfully provides various national compilations that show which beneficiaries have had their snouts deepest into the federal trough. By far the biggest cumulative winners are Riceland Foods ($554 million) and Producers Rice Mill Inc. ($314 million). These are both technically cooperatives, but there is little to distinguish them from other agribusiness giants. Riceland, with revenues of more than $1 billion, is the world’s largest rice miller and one of the country’s largest grain storage firms. It sells rice products to foodservice operators and directly to consumers.

A more interesting entry in the top ten is Pilgrim’s Pride, with cumulative subsidies of $26 million. With a history of health and safety problems, labor abuses and financial instability, it is one of the most controversial corporations in the U.S. agribusiness sector.

The company, which tends to refer to itself these days simply as Pilgrim’s (apparently, the pride is gone), was built by Texas chicken farmer Lonnie “Bo” Pilgrim into a poultry powerhouse through a series of aggressive acquisitions that began in the 1970s. Bo did not let the niceties get in the way. He once handed out campaign contribution checks to Texas lawmakers right on the floor of the legislature. His chicken plants were criticized by labor advocates for creating an epidemic of worker injuries and by animal rights advocates for treating the chickens inhumanely.

In 2002 the company had to recall a record 27 million pounds of poultry products after an outbreak of Listeria at a plant run by its Wampler Foods subsidiary. In 2007 Pilgrim’s was sued by the U.S. Department of Labor for overtime violations and later had to distribute more than $1 million in back pay. In 2008 federal officials raided Pilgrim’s plants in five states and arrested hundreds of workers for immigration violations. The company later paid $4.5 million to settle charges of hiring undocumented workers.

Saddled with debt from a $1.3 billion acquisition of rival Gold Kist, Pilgrim’s filed for Chapter 11 bankruptcy in 2008, leading to the closing of plants, the elimination of thousands of jobs and the cancellation of contracts with many of its captive farmers. In 2009 Pilgrim’s emerged from bankruptcy after being taken over by Brazilian meat mega-producer JBS, which also gained control of Swift & Company.

Federal farm subsidies have no doubt provided essential assistance to some family farmers in times of need, but too much of the money has gone to the likes of Pilgrim’s Pride. After years in which this waste has survived despite endless criticism, perhaps the time has finally come when these corporate giveaways will be curtailed.

The Dark Side of Family Business

Friday, August 27th, 2010

Americans love entrepreneurship, and no form of it is more celebrated than the family business. Most of us distrust big banks and giant corporations, but who doesn’t have warm feelings about mom and pop companies or family farms? These are the types of firms that politicians of all stripes want to shower with tax breaks and other forms of government assistance.

The problem is that family enterprises, like pet alligators, may start out as small and cuddly but can grow into large and dangerous monsters. We’ve seen two examples of this recently in connection with the family-owned oil company Koch Industries and the egg empire controlled by the DeCoster Family.

Koch Industries and its principals David and Charles Koch are the subject of a detailed article in The New Yorker by Jane Mayer. Much of the information in the piece has previously come out in blogs, websites and muckraking reports by environment groups, but she does a good job of consolidating those revelations and presenting them in a prestigious outlet.

Mayer describes how the Kochs, who are worth billions, have for decades used their fortune to bankroll a substantial portion of rightwing activism and are currently the big money behind groups such as Americans for Prosperity that are helping coordinate the purportedly grassroots Tea Party movement. What makes the Kochs especially insidious is that they use the guise of philanthropy to fund organizations promoting policy positions – environmental deregulation and global warming denial – that directly serve the Koch corporate interests, which include some of the country’s most polluting and greenhouse-gas-generating operations. The Kochs also contribute heavily to mainstream philanthropic causes such as the Metropolitan Opera and the Sloan-Kettering Cancer Center to win influential allies and gain respectability.

The DeCosters, whose egg business is at the center of the current salmonella outbreak, are not in the same social circles as the Kochs, but they have an even more egregious record of business misconduct. Hiding behind deceptively modest company names such as Wright County Egg, the family, led by Jack DeCoster, has risen to the top of the egg business while running afoul of a wide range of state and federal regulations.

As journalists such as Alec MacGillis of the Washington Post have recounted, the DeCosters have paid millions of dollars in fines for violating environmental regulations (manure spills), workplace health and safety rules (workers forced to handle manure and dead chickens with their bare hands), immigration laws (widespread employment of undocumented workers), animal protection regulations (hens twirled by their necks, kicked into manure pits to drown and subjected to other forms of cruelty), wage and hour standards (failure to pay overtime), and sex discrimination laws (female workers from Mexico molested by supervisors).

Their lawlessness dates back decades. A November 11, 1979 article in the Washington Post about Jack DeCoster’s plan to expand from his original base in Maine to the Eastern Shore of Maryland states that he was leaving behind “disputes over child labor, union organizing drives and citations for safety violations.” In 1988 the Maryland operation was barred from selling its eggs in New York State after an outbreak of salmonella. In 1996 the Occupational Safety and Health Administration fined the DeCosters $3.6 million for making its employees toil in filth. Then-Labor Secretary Robert Reich said conditions were “as dangerous and oppressive as any sweatshop we have seen.”

The DeCosters were notorious enough to be featured in a 1999 report by the Sierra Club called Corporate Hogs at the Public Trough.  The title referred to the fact that concentrated animal feeding operations (CAFOs) such as those operated by the DeCosters were receiving substantial federal subsidies despite their dismal regulatory track record.

Articles about Jack DeCoster invariably describe him as self-made and hard-working. “Jack doesn’t fish, he doesn’t hunt, he doesn’t go to nightclubs,” a farmer in Maine told the New York Times in 1996. “He does business — 18 hours a day.” He was recently described as a “born-again Baptist who has contributed significant amounts of money to rebuild churches in Maine and in Iowa.”

Like the Kochs, DeCoster apparently thinks that some philanthropic gestures will wipe away a multitude of business transgressions. Yet no amount of charitable giving can change the fact that these men grew rich by disregarding the well-being of workers, consumers and the earth. Such are the family values of these family businessmen.