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Is the customer ever right at USDA?

by Larry Mitchell, CEO
American Corn Growers Association

(Friday, April 23, 2004 -- CropChoice guest commentary) -- The recent decision to prohibit a request from Creekstone Farms Premium Beef, a small meat packing company in Kansas, to test 100 percent of their beef for mad cow disease is just another example that policy makers at USDA must have forgotten the lesson taught in Business 101 --"the customer is always right."

The customer in this case is an export client in Japan who has agreed to resume purchases from Creekstone if all of the beef processed in the facility can be tested for the disease. Japan and scores of other countries have banned the importation of U.S. beef since the discovery of mad cow disease late last year. The processor is ready, willing and able to oblige the customer. The customer is ready to buy. But USDA's decision has squashed the deal.

As absurd as this might seem on the surface, it is even more absurd when we realize what American farmers and ranchers have endured to expand and preserve our overseas and domestic markets. Under the premise that we must be "more competitive" in the international trade arena, U.S. farm and ranch families have been subjected to devastating reductions in the price of the things they sell in order to meet the challenge. In the case of corn, U.S. farmers have taken an inflation-adjusted reduction in price of well over 67 percent since the early 1970's in order to expand our international market share. But the fact is that U.S. corn exports have remained static at about 2 billion bushels per year.

So we have relinquished our price and our income in return for no gain in markets. This has been further exacerbated by another "customer is wrong" decision by USDA to not segregate and label genetically engineered crops. When found to be safe, farmers should have the right to raise either genetically engineered crops or traditional crops. Our customers should also have the right to buy what they want. But because of this USDA policy decision, U.S. corn farmers have lost the entire European export market for whole corn and suffered marketing disruptions in Japan and South Korea. Recent analysis by the American Corn Growers Foundation reveals that because of these lost market opportunities, U.S. corn farmers may lose as much as $1.50 per bushel on this year's crop. That is a loss of $15 billion just on this year.

Another example of USDA's "customer is wrong" decisions includes its refusal to label meat and many other products so that U.S. consumers can identify what country their food comes from. Our domestic customers overwhelmingly support country of origin labeling and President Bush enacted a law to this effect two years ago. USDA not only refused to implement the program, but led the charge to lobby Congress to eliminate funding for the law. It is a rare case indeed when a government agency asks for less funding!

USDA made a similar decision when the Europeans decided they wanted hormone-free beef. Just as it did on genetically engineered crops, USDA not only decided the customer was wrong, but went to court to force the customer to buy what the customer does not want – and then calls it Free Trade. Farmers should ask, "How much cheaper will we be forced to sell the fruits of our toil if the customer does not want them?"

The USDA's decisions listed here have impacted corn farmers in each case. We have lost considerable corn exports because of one decision. Since our best customer is our U.S. livestock industry, we have experienced an erosion of our domestic markets due to the other decisions.

USDA's "the customer is wrong" decisions have been contrary to the desires of our customers, contrary to the economic viability of the nation’s farming and ranching families and even contrary to its own mission statement. USDA's Creekstone decision is wrong and must be overturned immediately.