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ADM and the New York Times

by AL KREBS

Readers of THE AGRIBUSINESS EXAMINER are already quite familiar with the fact that in the past eight years when it comes to reporting the various price fixing and corporate crime stories involving the Archer Daniels Midland Corp. the New York Times aphorism “all the news that’s fit to print” rings hollow.

As David Hoech, ADM Shareholders Watch Committee co-founder, recalls when Kurt Eichenwald, the Times correspondent who authored the paper’s articles on the ADM lysine price fixing scandal and would later write The Informant, a book loosely based on the scandal, “told me that he controls what is printed in the Times concerning Archer Daniels Midland, I can now believe him.”

In a series of 36 documented letters — all of which went unanswered —- to the Times Managing Editor William Keller, Hoech accused Eichenwald of “unethical conduct” and the Times’ “actions and inaction’s” as just “another example of a `Corporate Predator’ that will do whatever it takes to make a buck.” (See Issue #111)

Two books have been written about the ADM case, the other being the authoritative and well-documented Rats in the Grain: The Dirty Tricks and Trials of Archer Daniels Midland The Supermarket to the World by James B. Lieber (Four Walls, Eight Windows Press, New York: 2000). Leiber’s book not only details the coverup that surrounded the ADM scandal and the company’s contempt for the public — “the competitor is our friend, the consumer is our enemy” being the popular ADM corporate mantra — but shows how the law was indeed prostituted by ADM.

In his Letter #4 Hoech wrote Keller: “I don’t know if you are aware that Lieber had a book deal with Simon & Schuster, and the book deal was canceled even after he was complimented on the material submitted. Eichenwald told me that he knew Lieber was going to lose his book deal after Eichenwald spoke with Lieber’s editor. I sure would like to know what that conversation was all about. He had said before there is only going to be one book on this story, and it looks like he tried. Rats In The Grain contains facts that should have been reported in the Times, and these same facts were also omitted from Eichenwald’s book.”

In his widely read October 1, 2000 “Farm and Food File” national syndicated column Alan Guebert also voices his skepticism regarding some of the “facts’ used in Eichenwald’s book. “The errors of fact are troublesome because the author is peddling this book as the `true story’ of the ADM scandal. . . . . “What else in `The Informant’ is not accurate? . . .

“Even more troublesome than Eichenwald’s literary license,” Guebert continues, “is his liberal flair for the dramatic. From the book’s opening scene to its last, the author writes as if he has one eye on the facts — when two certainly would have served readers more fully — and the other on Hollywood. . . . ”

The Times penchant for looking the other way when it comes to the questionable activities of ADM was also on exhibit recently in David Barboza’s September 16 article dealing with the fate of the bankrupt Farmland Industries. “(Facing Huge Debt, Big Farm Co-op Is Closing.” (See below)

In detailing the demise of Farmland Industries, in addition to an overview concerning the plight of small agricultural co-ops in the U.S., Barboza conveniently not only overlooks what has been happening to other large co-ops — Growmark and Minnesota Corn Processors at the hands of ADM, but also takes no note of the “unique” arrangement between Cenex Harvest States Cooperatives, the nation’s largest co-op, and Cargill, the world’s largest grain trader, and their 50-50 operation of the Tacoma Export Marketing Co. a 3,000,000 bushel grain elevator in Tacoma, Washington.

It was ADM which corralled the Illinois’ coop,Growmark, by placing its Chairman on the ADM board and then taking quiet control of key Farm Service outlets that Growmark and the Illinois Farm Bureau jointly operated as nonprofit services. Farmers were forced to put up their river elevators as collateral to secure ADM “loans” The same thing happened in Indiana with Countrymark. When Countrymark’s farmers learned that their CEO was about to benefit from ADM’s largess with a board seat they threw him out, but not before ADM’s deal for the elevators was clinched. Now across much of Ohio, Indiana and Southern Michigan one can see ADM/Countrymark on the elevators.

Relative to Farmland Industries, as Joy Powell reported in the Minneapolis Star-Tribune, the September 2002 sale of MCP to ADM “has heightened concerns among antitrust experts over market concentration in two key agricultural markets — ethanol and fructose.” Both law professors and economists contended that the Justice Department failed to disclose essential facts about the merger of the nation’s top ethanol producers.

“Even as good a reporter as Barboza is,” Nicholas E. Hollis of the Agribusiness Council observes, ” the all important joint venture between ADM and Farmland made back in 2001, as Farmland was foundering, goes completely unmentioned.

“Yet, as we have seen with the Supermarkup to the World before — when a predatory, profiteering outfit with criminal history targets non-profit, farmer-owned coops — and like the wolf in Granny’s clothes offers Little Red Riding Hood a sweet loan deal (usually with the co-ops grain elevators secured as collateral) — it isn’t long before the farmer coop is swallowed. In most instances, the devouring takes almost no time — a blink of an eye — since the predator has been on the inside, weakening the struggling partner as part of a larger, takeover strategy — and there is little, if any, national press.

“But the ADM assault on MCP earlier this year perhaps has changed all that, Hollis continues, ” and perhaps now, as the ADM-led attack on farmer owned cooperatives is gaining altitude — someone will call for an investigation by DOJ — and/or a congressional hearing into this particular form of non competitive behavior pioneered by ADM. I’ll bet you that when the smoke clears on Farmland’s bankruptcy — ADM will be in control of many new elevators, while everyone else watches the Cargill/Smithfield bidding war for Farmland Foods, the real `winner’ on the Farmland debacle will remain in the shadows.

“In the wake of the collapse of trade talks in Cancun,” he concludes, “perhaps we should start reflecting on the anti-farmer strategy we are countenancing here, illustrated by this latest ADM raid on a heretofore successful farmer coop.”

AL KREBS is the editor of the Agribusines Examiner, one of our favorite newsletters, where this commentary originally appeared. We encourage all of you to subscribe. He can be reached at: avkrebs@earthlink.net

 

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