The Creature from Jekyll Island (Audio)

The Federal Reserve Bank is a private bank that may have more power than most world leaders. Take a deeper look at the truth behind this privately-held corporation.

A Second Look At the Federal Reserve
An Address by G. Edward Griffin.

Where does money come from? Where does it go? Who makes it? The money magician’s secrets are unveiled. Here is a close look at their mirrors and smoke machines, the pulleys, cogs, and wheels that create the grand illusion called money. A boring subject? Just wait. You’ll be hooked in five minutes. It sounds like a detective story, which it really is, but it’s all true. Based on Mr. Griffin’s book of the same title, this address will shatter your old ideas about money and change the way you view the world. 74 minutes.

End the Fed
by Ron Paul

Before the US House of Representatives, February 4, 2009, introducing the The Federal Reserve Board Abolition Act, H.R. 833.

Madame Speaker, I rise to introduce legislation to restore financial stability to America’s economy by abolishing the Federal Reserve. Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people.

From the Great Depression, to the stagflation of the seventies, to the current economic crisis caused by the housing bubble, every economic downturn suffered by this country over the past century can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial “boom” followed by a recession or depression when the Fed-created bubble bursts.

With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.

Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of special interests and their own appetite for big government.

Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.

In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.

In conclusion, Mr. Speaker, I urge my colleagues to stand up for working Americans by putting an end to the manipulation of the money supply which erodes Americans’ standard of living, enlarges big government, and enriches well-connected elites, by cosponsoring my legislation to abolish the Federal Reserve.

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Obama’s Game of Chicken

The untold story of how the administration tried to stand up to big agricultural companies on behalf of independent farmers, and lost.
By Lina Khan | Print (PDF)

In May 2010, Garry Staples left his chicken farm in Steele, Alabama, to take part in a historic hearing in Normal, an hour and a half away.

The decision to go wasn’t easy. The big processing companies that farmers rely on for their livelihood had made it known that even attending one of these hearings, much less speaking out at one, could mean trouble. For a chicken farmer, that’s no trivial thing.

Getting on a processing company’s bad side can deal a serious blow to a farmer’s income—and even lose him the farm entirely. Still, Staples, a former Special Forces commander, and a number of other farmers decided to risk it. Many felt it was their only chance to talk directly to some of the highest-ranking officials in the country, including Attorney General Eric Holder and Agriculture Secretary Tom Vilsack, about the abusive practices now common in their industry. It was a chance, finally, to get some relief.

Staples and other farmers described a system that is worse in certain respects than sharecropping. It works like this: to do business nowadays, most chicken farmers need to contract with a processing company. The company delivers them feed and chicks, which farmers raise into full-size birds. The same company then buys those same birds back when they are full grown. The problem is that the big processing company is usually the only game in town. So it can—and usually does—call all the shots, dictating everything from what facilities a farmer builds on his farm to the price he receives for his full-size chickens.

As Staples explained, a processing company can require a farmer to assume substantial debt to pay for new chicken houses, tailored to the company’s exact specifications. Staples said he himself had borrowed $1.5 million. Then the company will offer that same farmer a sixty-day contract that can be changed or terminated by the company for any reason at any time. If a farmer gets fed up with the chronic uncertainty and tries to negotiate better terms, the company can punish him by sending lousy feed or sickly chicks, thereby depressing his earnings. Or the company can simply undercount the full-grown chickens’ weight. Whatever the particular abuse, because there are now so few processing companies—often only one or two in a farmer’s geographic area—there’s little way out of the cycle. For many chicken farmers in America, the only real option is to accept the terms, even if those terms are slowly driving them out of business. And even if those terms keep them from publicly speaking their minds.

Staples told the crowd at the hearing that he feared that Pilgrim’s Pride, the processing company with which he contracts, might punish him for voicing his troubles. Later, Christine Varney, the government’s chief antitrust regulator at the time, who was sitting in front of an American flag, spoke up. “Mr. Staples, let me say, I fully expect you will not experience retaliation by virtue of your presence here today,” she said, handing him a piece of paper with her phone number on it. “But if you do, you call me.” The hearing erupted into applause.

The message seemed to be clear: the highest brass in the Obama administration was listening closely to how America’s independent farmers are pushed around by big companies, and they were no longer going to tolerate it.

For the next seven months, Holder, Vilsack, Varney, and other officials from the Departments of Justice and Agriculture toured the country, hearing from more farmers and rural advocates. Along the way, they learned about concentration in the seed, pig, cattle, and dairy industries, as well as in poultry. During this same period, the USDA also worked on revising and updating the main law that regulates the livestock industries to prevent many of the unfair and deceptive practices that now threaten the dignity and survival of farmers and ranchers. From dairy farms in Wisconsin to cattle ranches in Montana, hopes soared.

But today, two years on, almost nothing has changed. Big processing companies remain free to treat independent poultry, cattle, and dairy producers largely as they please. “You had farmer after farmer after farmer telling the same story, basically pleading for help, and absolutely nothing has come of it,” said Craig Watts, a poultry farmer from Fairmont, North Carolina, who drove 512 miles to attend the hearing in Alabama. Staples agreed. “We had really thought something might change.”

A generation ago, it seemed that Americans had solved the problem of monopoly in agriculture. Following the election of President Woodrow Wilson in 1912, the government gradually weakened the plutocrats’ stranglehold over most of America’s agricultural business.

The government’s primary tools were two pieces of law. One was antitrust law, which included the Sherman Antitrust Act of 1890 and the Clayton Act of 1914. In 1919, for instance, the Federal Trade Commission wielded the Clayton Act to reduce the power of the “Big Five” meatpacking companies. These companies, the FTC noted, “had attained such a dominant position that they control at will the market in which they buy their supplies, the market in which they sell their products, and hold the fortunes of their competitors in their hands.”

The other main piece of law was the 1921 Packers and Stockyards Act, signed by President Warren Harding. It broadly prohibited unfair and discriminatory conduct in the marketplace and established standards by which to hold meatpacking companies and stockyards accountable. Often called the “Farmer and Rancher Bill of Rights,” the act made it illegal for big meatpackers to pay farmers less than market value for their livestock or to arbitrarily advantage some farmers at the expense of others. As one congressman noted at the time, the Packers and Stockyards Act was “a most comprehensive measure,” possibly extending “farther than any previous law into the regulation of private business.”

Over the next few decades, independent ranchers and farmers thrived under the protection of these two bodies of law. For the most part, farmers were able to sell their products relatively freely on the open market, and prices were established transparently through open bidding, in public auctions attended by many buyers and many sellers. The effect on the structure of the market was dramatic. In 1918, the five largest meatpacking companies in the country controlled 55 percent of the meat market. By 1976, the four largest controlled only roughly 25 percent of it.

Over the last quarter century, this progress has been reversed. Today, the top four meatpacking companies control 82 percent of the beef market—an unprecedented share of the pie.

The worst abuses in today’s livestock industries can be traced back to two fundamental changes in the structure of the market, acting in combination.

Until the 1950s, most chicken farmers did business the same way their grandfathers had. They bought their chicks, feed, and assorted supplies from various dealers, raised the birds, and then hauled them to a marketplace, where they would sell to whichever butcher offered the best price. This system worked until World War II, when the government’s decision to ration red meat, but not chicken, catalyzed a boom in Americans’ poultry consumption. By 1945, Americans were eating three times the poultry they had been eating just five years earlier. This new appetite for chicken continued after the war. Farmers, though, had a hard time managing production given the short life cycle of chickens, and the result was drastic price fluctuations and volatility in the poultry market.

In the midst of this rapid change, many of the companies that supplied farmers with chicks and feed introduced a new way of doing business: the contracting model. Under this arrangement, farmers would buy all their chicks and feed from a single supplier, raise the birds, and then sell them back to the same company, which had already agreed, according to a contract, to buy the birds at market price. The contracting model, which promised to stabilize prices, hence income, for both farmers and processing companies, took off like wildfire. In 1950, 95 percent of broiler producers were selling into the traditional open market; by 1958, 90 percent were selling on contract. Gradually, the hog and cattle industries adopted the contracting model too.

Some farmers and ranchers mistrusted this new system. At a 1958 meeting in Des Moines, one hog farmer voiced the central worry: “Will we be able to control our own farming?” But through the 1960s and ’70s, such worries seemed largely unfounded. If a farmer didn’t like the terms o-ered by one company, he could, at the end of the contract period, simply switch to another. The basic balance of power between the farmers and the companies remained in place.

The change that finally upended this balance came in 1981. A group of Chicago School economists and lawyers working in the Reagan administration introduced a new interpretation of antitrust laws. Traditionally, the goal of antitrust legislation had been to promote competition by weighing various political, social, and economic factors. But under Reagan, the Department of Justice narrowed the scope of those laws to promote primarily “consumer welfare,” based on “efficiency considerations.” In other words, the point of antitrust law would no longer be to promote competition by maintaining open markets; it was, at least in theory, to increase our access to cheap goods. Though disguised as an arcane legal revision, this shift was radical. It ushered in a wave of mergers that, throughout the course of the following decades, would transform agriculture markets.

Although the change was strongly opposed by centrists in both parties, a number of left-wing academics and consumer activists in the Democratic Party embraced the new goal of promoting efficiency. The courts also soon began to reflect this political shift. In 1983, after Cargill, the nation’s second-largest meatpacker, moved to purchase Spencer Beef, the third largest, a rival meatpacker named Montfort filed a lawsuit claiming that the acquisition would harm competition in the industry. In a 6-2 decision three years later, the Supreme Court ruled in favor of Cargill. The decision set a precedent limiting competitors’ ability to challenge mergers, and helped catalyze a rapid series of buy-ups across the agriculture industry. In 1980, the four biggest meatpacking companies in the country controlled 36 percent of the market. Ten years later, their share had doubled, to 72 percent.

As mentioned above, today the share of the market controlled by the four biggest meatpackers has swelled to 82 percent. In pork, the four biggest packers control 63 percent. In poultry, the four largest broiler companies—Tyson, Pilgrim’s Pride, Perdue, and Sanderson—control 53 percent of the market. In all these sectors—but especially poultry—these numbers greatly understate the political effects of concentration. At the local level, which is what matters to the individual farmer, there is increasingly only one buyer in any region.

The practical result of all this consolidation is that while there are still many independent farmers, there are fewer and fewer processing companies to which farmers can sell. If a farmer doesn’t like the terms or price given by one company, he increasingly has nowhere else to go—and the companies know it. With the balance of power upended, the companies are now free to dictate increasingly outrageous terms to the farmers.

At the hearing in Alabama in 2010, poultry farmers laid out how the arrangement now works. Staples, for example, described how processing companies routinely demand equipment upgrades that push independent farmers into heavy debt. In order to keep up with the companies’ facility requirements, farmers often must mortgage their farms and homes. With contracts often lasting only sixty days, and no real option to switch processing companies at the end of the contract period, farmers must either accept the terms they’re given—and stay on the company’s good side—or risk bankruptcy. “[W]ith the contracts that we’re offered now it’s either a take-it or leave-it situation,” Staples said.

Tom Green, another Alabama farmer at the hearing, recounted what happened when he contested a contract that included a mandatory arbitration clause that would take away his right to a jury trial if a dispute arose. When he took issue with the clause, the processing company refused to work with him. Absent other options, Green and his wife, Ruth, lost their farm. “Ruth and I chose to stand up for our principles,” Green, a former infantryman and pilot in Vietnam, said at the hearing. “We did not give up a fundamental right to access the public court … which is guaranteed by our Constitution, regardless of price. I had flown too many combat missions defending that Constitution to forfeit it. It was truly ironic that protecting one right, we lost another. We lost the right to property.”

Of all the abuses farmers described to officials in Alabama, the one they kept returning to was the “tournament system,” a payment scheme designed, according to the processing companies, to promote efficiency among farmers. Unlike a traditional market, where every pound of chicken of the same grade fetches the same price, the tournament system allows companies to pit one farmer against another by ranking each farmer based on how he performs in “competition” against his fellow farmers. The idea is that the healthier and heavier the chickens a farmer produces with a set amount of feed, the higher he’s ranked in relation to the entire set of farmers who deliver their birds to the same processing plant on that same day. The higher he’s ranked, the more a processing company pays him per pound.

One problem with the tournament system is that no standards regulate the quality of feed and chicks that processing companies deliver to farmers, which means there’s no way for a farmer to know if he’s getting the same inputs as the other farmers against whom the company makes him compete. Another problem is that the processing companies often weigh the full-grown chickens behind closed doors, out of the sight of the farmer who raised them. This enables the companies to favor or punish whichever farmers they, or their local foremen, choose. Any farmer who complains about the system, or about the specific provisions of a contract, or who even signs some sort of petition that a processing company doesn’t like, risks seeing his “earnings” arbitrarily cut.

Farmers are still expected to own their own land and to bear all the risks of investing in facilities, like chicken houses, just as they did when they sold into fully open and competitive markets. But almost all the authority over how they run their farm and what they earn now belongs to the companies. “A modern plantation system is what it is,” said Robert Taylor, a professor of agriculture economics at Auburn University who has worked with poultry farmers for close to three decades. “Except this is worse, because the grower provides not just the labor, but the capital, too.”

In most other industries, labor law protects workers from such forms of manipulation and exploitation. Farmers, though, aren’t protected under labor law because—at least until recently—it was assumed that open market competition enabled them to take their business to another buyer. Today, however, even as they become more like employees, laboring for a single company, the law still treats farmers as if they were their own masters. “The shift to vertical integration means that farmers no longer own what they are producing,” explains Mark Lauritsen, director of the food processing, packing, and manufacturing division at United Food and Commercial Workers, the union that represents workers across many industries, including agriculture and food processing. “They are selling their labor—but they don’t have the rights that usually come with that arrangement.”

The specific type of contract and the payment scheme offered by companies vary by sector, and the hearings indicated that the worst practices are generally found in the poultry industry. What applies across the board—in cattle ranching and dairy and hog farming—is the stark and growing imbalance of power between the farmers who grow our food and the companies who process it for us, and how this imbalance enables practices unimaginable in any competitive market.

Watts, the farmer who drove from North Carolina to attend the Alabama hearing, says he and his fellow poultry farmers are independent only in name. “What I can make through my work is entirely dictated by many hands before it ever gets to me,” he said in an interview. “My destiny is no longer controlled by me.”

Farmers and activists have been fighting to restore fair agriculture markets since the 1980s with little to show for it. Both Democratic and Republican senators have periodically introduced legislation to level the playing field for independent farmers and ranchers, but those measures have repeatedly collapsed under the weight of corporate lobbies.

Most consequentially for farmers, the once-groundbreaking Packers and Stockyards Act has been weakened over the decades by both the courts’ and the executive branch’s narrow interpretation of its broad, sometimes ambiguous language. As a result, the act is no longer sufficiently powerful to protect their rights. The administration of George W. Bush essentially halted enforcement of the act entirely. In 2006 the USDA’s own inspector general reported that the agency responsible for enforcing the act, the Grain Inspection, Packers and Stockyards Administration (GIPSA), had been deliberately suppressing investigations and blocking penalties on companies violating the law. The inspector general found that Deputy Administrator JoAnn Waterfield was hiding at least fifty enforcement actions in her desk drawer.

In 2008, independent farmers seemed at last to have caught two big breaks. First, in the 2008 Farm Bill, Congress instructed the USDA to revise and update specific issues that the eighty-year-old act either had never addressed or had left overly vague. As the agency regulating the Packers and Stockyards Act, the USDA, and, more specifically, its subsidiary body GIPSA, already had the power to revise and supplement its laws. Now it had a political mandate to do so, too.

The second big break came during the 2008 campaign, when Senator Barack Obama spoke directly about the need to address such abuse of independent farmers. Four days before the Iowa caucus, he even organized a conference call with independent farmers to discuss their concerns. In the primary, the farmers’ votes swung toward Obama, helping him beat Hillary Clinton and making him a serious contender for the nomination. In the general election, the appeal may have helped Obama win some rural, traditionally Republican counties in Colorado and North Carolina.

Some farmers and activists criticized Obama’s choice of Vilsack, a former governor of Iowa, to lead the Agriculture Department, mainly because of his close ties to biotech companies, including Monsanto. But the administration soon balanced this out by appointing Mississippi rancher and trial attorney Dudley Butler to head GIPSA. Farmers and ranchers trusted Butler, who had been a private lawyer for thirty years and had long been on the front lines representing chicken farmers against processing companies.

In August 2009, eight months into Obama’s first term, the administration announced plans for a series of hearings the following year—the most high-level examination of agriculture in decades, overseen by the new antitrust chief, Christine Varney. At the opening event in Ankeny, Iowa, in March 2010, Attorney General Holder spoke boldly, assuring the crowd that reform was now a Cabinet-level priority. “Big is not necessarily bad, but big can be bad if the power that comes from being big is misused,” he said. “That is simply not something that this Department of Justice is going to stand for. We will use every tool we have to ensure fairness in the marketplace.”

Over the next nine months, officials held another four full-day hearings, in Alabama, Wisconsin, Colorado, and Washington, D.C., to investigate the poultry, dairy, cattle, and seed industries, as well as to look at the discrepancy between the price consumers pay for food and the price farmers receive for producing it. Each hearing featured several panels with a range of perspectives, and each included time for comments from many of the thousands of farmers, ranchers, industry representatives, activists, and academics who attended. In addition to the hours of testimony collected publicly, the administration provided computers in adjacent rooms where those reluctant to speak out could privately register their concerns and fears.

The administration also consulted experts like Taylor, the professor at Auburn University. At one point, the USDA sent an entire team of economists and lawyers to Alabama with a full day’s worth of questions. “It was clear these were conscientious, committed officials who had spent a lot of care investigating the issues,” Taylor said.

During the course of the hearings, the USDA also began to address Congress’s 2008 Farm Bill instruction that the department revise and update elements of the Packers and Stockyards Act. By midsummer, the USDA had rolled out a series of far-reaching revisions, addressing many of the farmers’ concerns. One of the proposed changes would have specifically banned company retaliation against farmers who tried to negotiate the terms of a contract. Another would have required any company that forced farmers to make capital investments to offer contracts long enough for the farmers to recoup some minimum amount of that investment. This series of proposed updates and revisions to the Packers and Stockyards Act later came to be known collectively as the “GIPSA rules.”

While updating an old law might not sound like a big deal, farmers widely regarded the proposed GIPSA rules as serious game changers. “Before, they would throw us a little bone once in a while,” Watts said. “But with these rules we knew they meant business.”

Because the USDA has the legal authority to revise the rules under the Packers and Stockyards Act, Congress didn’t actually have to formally vote on the new rules. Congress has the right to discuss them and request additional information, but it has no direct authority over them. In the Senate, Tom Harkin, Chuck Grassley, and Tim Johnson, longtime advocates of reform in the agriculture industry, voiced their support for the proposed updates. Many House members, however, began to attack the rules, especially once the processing companies came out strongly against them.

In July 2010, less than a month after the USDA published its proposed rules, the House Agriculture Committee, which was led by Michigan Democrat Collin Peterson, called a hearing to question USDA officials on the revisions. At the hearing a group of mostly Republican lawmakers, joined by Jim Costa of California and a few other Democrats, assailed the proposed rules for their wide-reaching impact. They accused the USDA of ignoring the concerns of industry groups like the National Cattlemen’s Beef Association and the National Chicken Council, which represent processing companies like Cargill and Tyson. After the House hearing, the USDA agreed to extend the period for public comments on the proposed rules from the regular sixty days to a total of 150.

Then, in October, House members—led by Peterson, Agriculture Committee Ranking Member Frank Lucas (Republican from Oklahoma) and Livestock, Dairy, and Poultry Subcommittee Chairman David Scott (Democrat from Georgia) and Ranking Member Randy Neugebauer (Republican from Texas)—delivered a letter to Vilsack. The letter argued that the USDA, despite nationwide hearings and dozens of investigations, interviews, and fact-finding missions, had not sufficiently justified the need for some of the new farmer protections, and urged the agency to subject the rules to more thorough economic analysis. The letter was signed by sixty-eight Republicans and forty-seven Democrats.

In the November 2010 midterm elections, a surge of successful Tea Party candidates handed Republicans control of the House. In the aftermath of the election, the administration continued its reform efforts. If anything, by the last of the five hearings in December the tone of the reformers had become more radical, centering on the political and moral nature of what many American farmers now suffer. “We’ve got to be looking at power,” explained Bert Foer, head of the American Antitrust Institute, at the hearing. “We’ve got to be looking at the negotiating realities that occur in the marketplace and not simply what the effect on the consumer price is going to be.”

But in the new year, a new political reality set in. In January 2011, Obama appointed Bill Daley, former commerce secretary and top executive at JPMorgan Chase, as his chief of staff. Part of a wider post-election shake-up at the White House, Daley’s appointment signaled that the administration was now intent on compromising with Republicans, especially on economic issues. Many Republicans, though, viewed the election as a mandate for even more radical obstruction.

In February 2011, the House Agriculture Committee again pushed Vilsack on the economic analysis of the proposed Packers and Stockyards rules, and over the next few months various subcommittees orchestrated hearings for trade groups to voice their objections. According to one industry report, paid for by the National Meat Association, the proposed USDA rules would levy a $1.64, billion blow to the meat industry and lead to 22,800 job losses. The report also claimed that the rules would, over time, decrease beef, pork, and poultry production across the board.

In May 2011, Costa, the Californian Democrat, Reid Ribble, a House Republican from Wisconsin, and Lucas, now the chairman of the Agriculture Committee, circulated a letter asking Vilsack to withdraw all proposed rule changes entirely. “[W]e are confident that any such rule will not be looked upon favorably by Congress,” the congressmen wrote. Though their letter was signed by 147 members—more than a third of the House, including twenty-five Democrats and thirty Tea Party Republicans—the USDA didn’t accede to the request. But officials did begin to water down the proposed rules.

The next month, in June 2011, the House Appropriations Committee included a crucial rider in its funding bill. The rider was designed to strip the USDA of the funds it needed to finalize and implement the strongest of the proposed rules. Farmers and activists tried to fight the rider, which was backed by corporate livestock and poultry lobbies. Advocacy groups flew in farmers from around the country to meet with members of Congress, and 6,000 people called in to the White House to express their support. During a debate over the rider, Ohio Democrat Marcy Kaptur, the only representative to come out strongly in favor of the rules, slammed the House for “standing with the few big meatpackers and against the many thousands and thousands of producers.” Even the American Farm Bureau, a group that often champions policies favorable to agribusiness, wrote an open letter to Congress opposing the rider.

But the farmers and activists found that they were now largely alone. By late 2011, the administration was in full retreat. “The White House and USDA became very timid and really didn’t do much to disabuse the critics spreading untruths about the reforms,” said Patrick Woodall, research director with Food & Water Watch, which organized some of the efforts in support of the proposed rules. “They all fell silent.”

The Senate supported the Packers and Stockyards revisions in its appropriations bill in September 2011. But the House, as Woodall put it, “went on a full-out offensive,” holding hostage everything from food stamps to food-safety measures. “Nobody wants to have to defend a policy position where the victims are low-income kids, and that’s where the balance ultimately was,” Woodall said. Even Senators Harkin and Johnson, who only a month earlier had strongly voiced their support for the GIPSA rules, backed down.

By November 2011, it was clear that the reformers had lost. The rider had passed. The rules as they had been intended were dead. The most ambitious, far-reaching campaign to reform the agricultural industry in forty years was over, less than two years after it had begun.

In early December, the USDA published four watered-down revisions and updates to the Packers and Stockyards Act. The only full-fledged rule to come into effect prohibits mandatory arbitration clauses in poultry farmers’ contracts—vindication for many, including Tom Green and his wife, Ruth, but hardly a sweeping victory. The other three revisions are vague “guidelines” for the USDA. None of them explicitly prohibit arbitrary and exploitative conduct by the processing companies under the notorious tournament system.

In January 2012, Butler resigned from the USDA. Then in May, the DOJ quietly published a report summarizing the five nationwide hearings conducted in 2010. The report detailed both a lack of competition in the industry and abusive behavior. It went on to claim that the DOJ couldn’t act to address these wrongs because, no matter how outrageous the conduct of the processing companies, their actions did not amount to “harm to competition” as defined by the current antitrust framework.

Administration officials who took part in the hearings say two factors thwarted their attempts to protect farmers from exploitation by processing companies. One was a deliberately obstructionist Republican-controlled House set on derailing countless reforms, not only in agriculture, and on protecting big industry from any tightening of regulation.

The other factor the administration blames is the weakened state of America’s antitrust laws. In the past, antitrust law was used to promote competition and to protect citizens from concentrated economic power. But today, enforcers say they are handicapped even when confronting markets that are no longer competitive. “However desirable, today’s antitrust laws do not permit courts or enforcers to engineer an optimal market structure,” the DOJ wrote in its recent report on the 2010 agriculture hearings. Far-reaching actions—like the Wilson administration’s challenge of the meatpacking industry ninety years ago—are, they say, simply unimaginable under today’s narrow antitrust framework.

Varney, who has since left the DOJ for private practice, says that the Justice Department pushed the law as much as it could under her tenure. “If you overreach in the courts you will lose, and the very behaviors you are calling illegal will be validated by the court,” she said. “This is not about a fear of taking risks or a fear of losing. It’s a fear of setting the producers back.”

One wonders, though, whether the administration’s actions—taken as a whole—did not set the farmers back as much as would a loss in court. By documenting the big processing companies’ exploitation of independent farmers, then failing to stop that exploitation and retreating in almost complete silence before entirely predictable resistance from the industry, the administration, for all intents, ended up implicitly condoning these injustices. The message to the processing companies is, after all, absolutely clear: you are free to continue to act as you will.

It is no stretch to assume that, from the perspective of the White House, the choice to abandon an apparently failed effort to protect independent farmers from such abuses may have seemed politically pragmatic. But over the longer term, it may prove to have been a strategic political failure. By raising the hopes and championing the interests of independent farmers against agribusiness, the administration effectively reached out to the millions of rural voters who don’t normally vote Democratic but whose ardent desire to reestablish open and fair markets for their products and labor often trumps any traditional party allegiance. Instead of translating that newfound trust into political capital, the administration squandered whatever goodwill it had begun to earn. Worse, the administration’s silent retreat amounts to a form of moral failure. Having amply documented the outrageous abuse of fellow citizens, it decided it was not worth expending more political capital to right this wrong.

The message to the farmers, it seems, is also clear. “A lot of farmers have gone pretty quiet around here,” Staples said, “from being scared.”

Lina Khan is a reporter and policy analyst with the Markets, Enterprise and Resiliency Initiative at the New America Foundation.

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Edible Schoolyard Project: Continuing the Conversation with Mike Callicrate

Watch Mike Callicrate’s recent presentation at UC Berkeley with Edible Education 103:
Edible Education 103: The Politics and Economics of Meat by Mike Callicrate and Bob Martin with Michael Pollan

Sponsorships
Edible Education is a lecture course at UC Berkeley, funded by the Edible Schoolyard Project www.edibleschoolyard.org and the Epstein Roth Family Foundation. Instructor Michael Pollan.

About
Edible Education 103: Telling Stories About Food and Agriculture is a Fall 2012 course at UC Berkeley, Graduate School of Journalism and College of Letters and Science. The course is moderated by Michael Pollan, a Knight Journalism Professor at UC Berkeley.
Course

Course
As the costs of our industrialized food system—to the environment, public health, farmers and food workers, and to our social life—become impossible to ignore, a national debate over the future of food and farming has begun. Telling stories about where food comes from, how it is produced—and how it might be produced differently—plays a critical role in bringing attention to the issue and shifting politics. Each week, a prominent figure in the debate explores: What can be done to make the food system healthier, more equitable, more sustainable? What is the role of storytelling in the process?

Please visit the The Edible Schoolyard Project

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Feeling grateful yet? Teenage poultry farmer dishes straight talk

Posted:   11/10/2012 12:01:00 AM MST

Updated:   11/11/2012 12:12:20 PM MST
 
By Shelby Grebenc
Special to The Denver Post

http://extras.mnginteractive.com/live/media/site36/2012/1109/20121109__20121110_C1_FE10AHFARM~p1.jpg
Shelby Grebenc has been raising chickens for both eggs and meat at her family’s Adams County farm. In this 2011 photo, she holds Chipmunk, one of her Americana hens. (Cyrus McCrimmon, The Denver Post)

Over the past year I have been trying to earn money. I have been doing this by helping plant a big garden and then selling lettuce and other vegetables that I raise at farmers markets.

I also have chickens and I sell eggs at a local dairy, farmers market, and from roadside signs telling people how to get to my house. I also sell live chickens and broilers.

People around me use words like “organic,” “farm fresh,” “local-food movement,” “free range” and “sustainability,” and I thought farming might be a good idea since we sort of do this for our family anyway. My dad raises our own cows because he does not want my brother or me exposed to growth hormones and antibiotics that are used to raise commercial meat.  

http://extras.mnginteractive.com/live/media/site36/2012/1109/20121109__20121110_C1_FE10AHFARM~p2_200.jpg
Shelby Grebenc, 13, collects eggs at her family’s farn in unincorporated Adams County. She’ll get as many as nine dozen in a winter afternoon from her 100-plus hens. (Cyrus McCrimmon, The Denver Post)
 
Dad thinks this is one of the reasons that my brother and I are thinner and smaller than our friends. I think it could just be that we work our tails off.

I charge $4.25 for a dozen of my eggs and $20 per broiler chicken based on my costs. Baby chickens cost me around $2 each. I lose around 10 percent of them because they just die for no reason when they are little.

An egg-layer chicken takes around 28 to 32 weeks to lay its first egg. A broiler chicken takes six to 20 weeks before it is ready to eat. All during this time, I have to feed, water and keep them warm. The layers are not laying eggs to sell yet. Heat lamps use electricity, and an electric bill can be around $200 per month.

A pound of chicken feed costs me 23 cents a pound if I order it in 6-ton batches. Each chicken eats around 2 pounds of food each week and produces around seven to 12 eggs per week. Egg cartons cost me a nickel each. I have to clean the chicken coop, gather, wash and package eggs, and then I have to have sawdust for bedding and nesting boxes. I pay $5 for each broiler chicken to be slaughtered, USDA inspected, packaged and flash frozen.

I also have to pay my dad for diesel to drive the chickens to the only USDA-inspected chicken processor in this state, which is in Nunn, close to 100 miles from my house, and a day or two later we have to drive back and pick them up.

I had to buy fencing for a pen because the foxes and the coyotes eat a lot of my birds because they are free-range and run around in the pasture. You can see there is not a lot of profit for me, but I don’t do too bad for being 13 years old.

Thing No. 1 that I have learned about farming: People talk a lot, but it does not mean much. I have people who want lots of eggs tell me to deliver a certain amount every week. I have to save up the eggs to do this, and then they change their minds and don’t want them.

Thing No. 2: People all say words like “farm fresh,” “sustainability,” but they don’t want to actually pay for what it actually costs me to make it. Almost everyone tries to talk me into lowering my price or asks me to give my eggs away for free.

Thing No. 3: Perception is everything. I have chickens that lay both white and brown eggs. The chickens are raised side by side. They all get the same feed, and they all run around in the same pasture together. People perceive the brown eggs are better, so I have trouble selling white eggs.

When we are at the farmers markets, if Dad is sitting with me, I don’t sell very many eggs or vegetables. If Dad is not sitting with me, I sell like crazy. Just how do the people shopping at the farmers market think that I got the great big F-350 truck that I am selling the eggs and vegetables out of down to the farmers market?

Thing No. 4: Farming takes a lot of time. I have to get up early so that I can feed and water everyone and be on the school bus by 7:50 a.m. When I get home I have to collect eggs, feed and water everyone again, and then package eggs. Then I get to do my homework.

Thing No. 5: Marketing. I collect my eggs in a 5-gallon bucket. This is practical, because it holds them all in one trip. If I have customers coming over when I am gathering eggs, I put my hair in pigtails, and I use a small straw basket and make lots of trips. People like to buy eggs from little kids skipping through the pasture with a basket of eggs.

Last thing: Farming is very hard work. I don’t make a lot of money doing it, and people do not support what you are doing. I live out in the country. As new folks move in, they complain about the name of your farm, smells, mooing cows, bleating sheep and crowing roosters, even though these things were there before they built a million-dollar house and moved in. I do not plan on farming in the future.

If you want sustainable, wholesome, pasture-raised organic, hormone- and antibiotic-free food, you have to support it. You can not get these things by talking about it and not paying for it.

The next time you shop at a farmers market, think about what it cost me to grow it. Don’t ask me to take less and then tell me you can get it cheaper at a big-box store. I know you can — but it will not be as fresh or as good as what I have, and you won’t make me cry.

Read more: Feeling grateful yet? Teenage poultry farmer dishes straight talk – The Denver Post http://www.denverpost.com/ci_21967690#ixzz2C7laBTjl 


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In Praise Of Cowdung

November 15, 2002
By Vandana Shiva

In India we worship cow dung as Lakshmi, the goddess of wealth. Gobur-dhan puja is literally the worship of gobur (cowdung) dhan (wealth).

Cow dung is worshipped because it is the source of renewal of soil fertility and hence the sustainability of human society. The cow has been made sacred in India because it is a keystone species for agro-ecosystems — it is key to the sustainability of agriculture.

When Monsanto and biotech industry spokesmen parading as “farmers” presented me with cow dung at the WSSD in Johannesburg, I accepted their “award” as a tribute to organic farming and sustainable agriculture.

The small farmers convergence at the W.S.S.D. with farmers from across Africa rejected GMO’s, and chemicals and committed themselves to organic farming, and defense of farmers rights. They are freely choosing seeds they can save and technologies that are sustainable. Farmers organizations in India and in Africa are saying “no” to GMO’s on the basis of their freedom to choose to be organic which means being free of genetic contamination that results from GM crops. Genetic contamination robs farmers of their freedom to be GM free. Patients and intellectual property rights on seed rob farmers of their freedom to save, exchange, develop seed. Farmers are treated as “thieves” and “criminals” for exercising farmers rights. The worst example is that of Parcy Schmeiser whose canola fields were contaminated by Monsanto’s GM canola and he was sued for “theft” of genes. That is why those of us who farm organically and want to maintain our freedom to farm and uphold farmers rights are resisting the irresponsible corporations which are trying to own life on earth, including seed, contaminate our crops and food and have total control over farming and farmers.

GM seeds and chemicals are a threat to farmers survival, a threat to consumer health and a threat to the environment. Farmers in Punjab and Andhra Pradesh are committing suicides because the costly seeds and chemicals from corporations like Monsanto/Mahyco have pushed them into deep, unpayable debt.

The claims of Monsanto and its apologists like Swaminathan Iyer (who called me a “Green Killer” in the Times of India on 22nd Sept 2002, because I practise and promote organic farming) that GM can feed the world is totally false. Monsanto’s Bt cotton has failed across India in its first year of commercial planting. In Khargone in Madhya Pradesh Bt is a 100% failure and farmers are demanding compensation. In Maharastra, the Bt crop has failed on 30,000 hec and farmers are asking for Rs. 500 crore compensation. In Gujarat, in Bhavnagar, Surendranagar and Rajkot Bt cotton has been destroyed by a heavy infestation of bollworm, the pest for whose control the toxin producing Bt. gene has been engineered into cotton. The genetically engineered Bt cotton is not a miracle, it is a fraud on farmers.

In Rajasthan, the hybrid corn which Monsanto claims will give 20 — 50 quintals per acre is giving 1.5 to 1.7 quintals per acre while demanding intensive water and chemical use, aggravating the draught and famine.

The pseudo scientific claims of irresponsible biotech corporations like Monsanto are killing our farmers, our agriculture, our biodiversity.

Organic agriculture is increasing farm productivity by 2 to 3 times, increasing farmers incomes, and protecting public health and the environment. That is why the Time Magazine identified Navdanya as a pioneer for the new century and stated that “In India atleast, Navdanya sets an eco-friendly standard that agribusiness must show it can out perform. The challenge for genetic engineers is to create seeds adapted to particular locales that enable farmers to reduce, not increase, the use of chemicals” (Time, Aug 26, 2002, “Seeds of self Reliance, p 36)

Monsanto and its lobbyists profit by selling and promoting poisonous, toxic seeds and corporate control. Movements like Navdanya celebrate biodiversity, farmers freedom and cow dung. The corporations and corporate spokespeople are getting desperate because people are seeing through their lies and deceptions. With organic farming growing worldwide, and the failures and non-sustainability of genetic engineering and chemical engineering becoming evident, the chemical corporate lobby is getting desperate. I view their personal assaults on me as a symptom of the desperation caused by the failure of non-sustainable industrial, corporate agriculture in removing hunger or improving farmers livelihoods. Sustainable systems are growing because they offer real solutions to the hunger and poverty crisis. And cow dung, biomass and biodiversity are at the heart of sustainability and the non-violent organic alternative to genetic engineering and chemicals.

Ecologically the cow has been central to Indian civilization. Both materially an conceptually the world of Indian agriculture has built its sustainability on maintaining the integrity of the cow, considering her inviolable and sacred, seeing her as the mother of the prosperity of food systems. The integration of livestock with farming has been the secret of sustainable agriculture. Livestock perform a critical function in the food chain by converting organic matter into a form that can be easily used by plants. According to K.M. Munshi, India’s first agriculture minister after independence, “The mother cow and the Nandi are not worshipped in vain. They are the primeval agents who enrich the soil – nature’s great land transformers – who supply organic matter which, after treatment, becomes nutrient matter of the greatest importance. In India, tradition, religious sentiment and economic needs have tried to maintain a cattle population large enough to maintain the cycle, only if we know it

A century ago, Sir Alfred Howard, the father of modern sustainable farming wrote in his classic, An Agricultural Testament, that, ‘In the agriculture of Asia we find ourselves confronted with a system of peasant farming which, in the essentials, soon became stabilized. What is happening today in the small fields of India and China took place many centuries ago. The agricultural practices of the Orient have passed the supreme test – they are almost as permanent as those of the primeval forest, of the prairie, or of the ocean.

Howard identified the principles of sustainable agriculture as those of renewability as seen in the primeval forest. The agricultural Testament is a record of practices that had maintained the soil fertility of India over centuries. Historical records indicate that the alluvial soils of the Gangetic plains have produced fair crops year after year, without falling in fertility. According to Howard, this has been possible because a perfect balance had been reached between the manurial requirements of crops harvested and natural processes which recuperate fertility. The conservation of soil fertility has been achieved through a combination of mixed and rotational cropping with leguminous crops, a balance between livestock and crops, shallow and light ploughing, and organic manuring.

That is why we organize the Howard Memorial Lectures on 2nd October as a remembrance of India as the source of non-violent, sustainable agriculture. This year’s lecture was given by Fukuoka, the Japanese agriculture thinker and chaired by Dr. Tewolde Egziabher, the Ethiopian Environment Minister who has led the Biosafety negotiations in the United Nations.

Howard saw in India’s peasants a knowledge of farming far more advanced than that of the west. He recognized the secret of India’s sustainable land use as lying in the return of organic matter and humus to the soil. A balance between livestock and crops was always kept in order to maintain the food cycle and return organic matter to the soil. The method of mixed cropping is part of the adaptation of nature’s ways in which cereal crops like millet, wheat, barley and maize are mixed with pulses, providing nutrition to give better results than monocultures; Howard notes that, “Here we have another instance where the peasants of the East have anticipated and acted upon the solution of one of the problems which western science is only now beginning to recognize.”

Biodiversity conservation and organic agriculture is increasing food output by 200-300%. Biodiversity intensification rather than chemical intensification is the way forward for Indian agriculture. Organic farming is necessary to increase food production and strengthen food security, conserve natural resources — soil, water, biodiversity, improve farmers incomes and well being, protect rural livelihoods, prevent indebtedness, and stop debt linked farm suicides. It creates freedom from debt, domination and disease.

Corporations are creating poverty by diverting the hard earned income of peasants and farmers to the seed/pesticide industry. The new seeds besides being costly are also ecologically vulnerable to pests and diseases leading to more crop failures and higher use of chemicals. These are killer technologies which are undesirable and unnecessary.

The corporate hijack of agriculture is based on pseudo science and false claims. The violent technologies of genetic engineering and toxic pesticides, and the dishonest, deceitful promotion of these poverty creating capital intensive and non-sustainable technologies is leading to the death of our farmers and the destruction of our ecological security and food security. These are primitive, crude and obsolete technologies that are efficient in destruction, not production.

The agriculture technologies of the future have to work for people, not corporations, they have to work with nature, not against nature. If farmers and farming have to have a future, it has to be organic. Neither the planet nor the poor can afford the waste, inefficiency, deceit, pollution and violence of chemicals and genetic engineering.

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