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USDA, Inc.

(Friday, July 23, 2004 -- CropChoice news) -- The research report, “USDA, Inc.: How Agribusiness Has Hijacked Regulatory Policy at the U.S. Department of Agriculture,” examines the industry connections of key agency officials, the role of trade associations in influencing policy and offers recommendations for correcting this classic example of a captured agency. The report by Philip Mattera, director of the Corporate Research Project of Good Jobs First, was released this morning at the Organization for Competitive Markets "Food and Agriculture" conference in Omaha, Nebraska. The theme of the conference is “Agency Capture: Has the People’s Agency Become the Lobbyist’s Agency?”

The paper was conceived by the ORGANIZATION FOR COMPETITIVE MARKETS ( http://www.competitivemarkets.com ). It was commissioned by a working group of the AGRIBUSINESS ACCOUNTABILITY INITIATIVE ( http://www.agribusinessaccountability.org ).
The following working group members helped research and edit the paper:

The Agribusiness Accountability Initiative thanks the working group members and THE JESSIE SMITH NOYES FOUNDATION for their financial support to this project.

The report's executive summary follows:
IN ITS EARLY DAYS, the United States Department of Agriculture (USDA) was dubbed the “People’s Department” by President Lincoln, in recognition of its role in helping the large portion of the population that worked the land. Some 140 years later, USDA has been trans-formed into something very different. Today it is, in effect, the “Agribusiness Industry’s Department,” since its policies on issues such as food safety and fair market competition have been shaped to serve the interests of the giant corporations that now dominate food produc-tion, processing and distribution. We call it USDA Inc.

The reorientation of USDA has been occurring over many years, but it has now reached a dra-matic stage. Thanks to its growing political influence within the Bush Administration, Big Agribusiness has been able to pack USDA with appointees who have a background of working, lob-bying, or performing research for large food processing companies and trade associations. Conversely, there are virtually no high-level appointees at USDA with ties to family farm, labor, consumer or environmental advocacy groups.

The extent to which agribusiness has packed USDA with its people is apparent when looking at the biographies of the top officials of the Department, up to and including Secretary Ann Veneman. In addition to her time as a public official, Veneman served on the board of biotech company Calgene (later taken over by Monsanto). Many of Veneman’s key aides and the heads of various USDA agen-cies are political appointees who spent much of their career working for agribusiness companies and trade associations.

For example, Veneman’s chief of staff Dale Moore was executive director for legislative affairs of the National Cattlemen’s Beef Association (NCBA), a trade association heavily supported by and aligned with the interests of the big meatpacking companies, such as Tyson and Cargill. Deputy Secretary James Moseley was a co-owner of a large factory farm in Indiana. Floyd Gaibler, a Deputy Under Secretary, used to be executive director of the dairy industry’s National Cheese Institute. Assistant Secretary for Congressional Relations Mary Waters was a senior director and legislative counsel for ConAgra Foods, one of the country’s largest food processors.

These industry-linked appointees have helped to implement policies that undermine the regula-tory mission of USDA in favor of the bottom-line interests of a few economically powerful compa-nies. This paper documents USDA’s abandonment of its public mission from two perspectives. Through five case studies, it both reviews the questionable policies the Department has adopted in key areas and the background of the key officials who helped to determine those policies.

BOVINE SPONGIFORM ENCEPHALOPATHY (BSE). The assumption that the United States was immune to this livestock affliction, popularly known as “mad cow disease,” came to an end last year, when the first confirmed domestic case was found in a cow originating in Canada. Since that time, USDA has resisted imposing the strict safety measures and testing procedures recom-mended by most independent experts. At the same time, the Department has blocked an effort by a Kansas-based meatpacker called Creekstone Farms to install its own BSE testing lab, claiming that comprehensive testing by the company might lead consumers to think that meat from other providers was not safe. The USDA Inspector General is now investi-gating the actions of agency officials who secretly allowed beef imports from Canada to resume shortly after a BSE out-break in that country-while at the same time opposing country- of-origin labeling of meat. These reckless policies are best explained by the fact that numerous key positions in the Department are held by former staffers at NCBA, which, along with the dominant meatpacking firms, has also opposed stricter safety and testing measures as well as country- of-origin labeling.

CAPTIVE SUPPLY IN MEATPACKING. The handful of giant corporations that dominate meatpacking in the United States have used their economic muscle to deny live-stock producers (ranchers) access to open markets and have forced them to enter into private contracts heavily weighted in favor of the packers. This one-sided arrangement is known as captive supply. Under legislation enacted in the 1920s, USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) is supposed to oversee livestock markets and guard against anti-competitive practices. Instead, GIPSA has repeatedly downplayed the problem of captive supply and has all but abandoned its enforcement of fair competition rules. This “see no evil” approach has appar-ently been embraced by the current Administrator of GIPSA, Donna Reifschneider, who previously served as pres-ident of the National Pork Producers Council, a trade group closely aligned with dominant meatpacker interests.

MEAT INSPECTION POLICIES. Americans used to think that tainted meat was a problem that disappeared with the reforms of the Progressive Era in the early 20th Century. Recent years have seen a resurgence of E.coli bacteria, listeria and other hazards that are widely linked to a weakening of traditional slaughterhouse inspection practices. Bowing to the wishes of the major meatpackers, USDA has endorsed a system called Hazard Analysis and Critical Control Point (HACCP). But instead of using HACCP to supplement traditional inspection, USDA implemented a watered-down version of the system while at the same time allowing meatpackers to rely more heavily on questionable procedures such as irradiation to deal with contamination. The federal official most directly responsible for meat inspection policies is Dr. Elsa Murano, Under Secretary of Agriculture for Food Safety. Before joining the Bush Administration, Murano was an academic who strongly supported irradiation and who did research funded by Titan Corporation, a leading player in food irradiation through its creation of SureBeam Corporation.

BIOTECH FOODS. Resistance to genetically modified (GM) wheat among farmers has become so strong that Monsanto Co. announced recently that it was abandoning active efforts to develop GM wheat. USDA, nonetheless, remains one of the strongest proponents of agricultural biotechnology. Like her predecessor Dan Glickman, Secretary Veneman has promoted GM foods in international forums, downplaying the safety issues and charging that biotech critics are impeding efforts to reduce world hunger. As noted previously, Veneman once served on the board of a biotech company. Neil Hoffman, the Biotechnology Regulatory Services Director of USDA’s Animal and Plant Health Inspection Service, formerly worked for the biotech firm Paradigm Genetics. Nancy Bryson, USDA’s general counsel, was formerly a partner in the law firm of Crowell & Moring, where she co-chaired the firm’s corporate biotechnology practice.

CONCENTRATED ANIMAL FEEDING OPERATIONS (CAFOS). These overgrown livestock facilities, which house and feed 1,000 or more animals in a confined area, are among the biggest contributors to agricultural pollution. Also known as factory farms, CAFOs produce enor-mous quantities of manure that contaminate water supplies and cause other environmental problems. USDA has promoted the growth of CAFOs with little or no regard to their public health conse-quences. Specifically, USDA has supported the misguided policy of using conservation dollars out of its Environmental Quality Incentives Program to subsidize CAFOs’ attempts to solve their manure problems. The official who oversees the day-to-day activities of USDA, Deputy Secretary James R. Moseley, has been described by the Chicago Tribune as “a champion of industrial-style hog production.” Before taking office, he was a partner in Infinity Pork LLC, an Indiana CAFO that raised 50,000 hogs annually.

Each of these case studies demonstrates an alarming correlation between controversial policies adopted by USDA and the financial interests of the companies and trade associations that previously employed many key Department officials. Rapidly disappearing from USDA is a diversity of per-spectives, particularly those that give priority to family farmers and consumers. There is no longer any balance between USDA’s traditional dual roles of promoting the agriculture industry and pro-tecting food safety and the livelihood of family farmers. USDA Inc. now appears to slavishly follow the wishes of Big Agribusiness.

This paper concludes that until there is greater stakeholder representation inside USDA, a substantive movement toward more balanced farm and trade polices is impossible. Excessive industry influence is the central obstacle to redirecting U.S. agriculture in a more sustainable and fair direc-tion. The paper thus calls for broad collaboration on an alternative agenda for addressing the prob-lems at USDA, including:

  • Reappraisal of ethics rules to prevent government officials from overseeing policies that directly affect the interest of their former employers;
  • Enhancement of Congressional oversight over regulatory appointees;
  • Evaluation of whether USDA can continue to serve both as a promoter of U.S. agricultural products and a regulator of food safety; and
  • Further research on revolving-door conflicts of interest at USDA.

Progress on these measures will begin to turn USDA Inc. back into an arm of government that represents the public interest.

To see the full report, go to http://www.agribusinessaccountability.org/page/325/1