Cargill scrutinized for plight of farmers

Max Rust

A group of more than 100 local activists, including many University students, heard arguments against one of the largest privately held companies in the world on the corporation’s own front yard Tuesday in Minnetonka.
“Guilty” was the resounding verdict found by the demonstrators who set up a mock court trial to determine if grain-distribution giant Cargill Inc. has contributed to the decline of crop prices, and ultimately, of rural communities.
Several members of the “court,” clad in white suits and gas masks, also voiced arguments against Cargill’s support of genetically altered foods. Two of these people received trespassing citations from police after blocking traffic and for blocking access to the Cargill building for an hour and a half.
“This company which controls a third of all grain exports has escaped public scrutiny. This company which has been so central to exporting genetically modified crops to countries who often don’t want them has escaped public scrutiny,” said Joel Wainwright, a geography graduate student. “It’s time to start a long struggle to revoke Cargill’s public charter.”
But despite several charges levied against Cargill, the protesters have it all wrong, said company officials. Other circumstances, including the recent Asian financial collapse and America’s reluctance to reach trade agreements with China, are the real culprits behind the farmers’ demise, said Rob Johnson, Cargill’s vice president of public affairs.
The plight of farmers is sending shock waves through rural America. As more farmers are unable to continue their livelihood because of low commodity prices, many small towns that depend on the farmers’ income are losing money and people move away to larger cities.
The two-day “Rally for Rural America” in Washington, D.C., this week drew thousands of farmers demanding higher prices from companies like Cargill, the world’s largest trader of farm-grown crops.
But while those in Washington voiced their troubles with politicians, activists in Minnesota took their concerns to what they feel is the source of the problem.
“There are a lot of people that traveled far from their farms and homes to go all the way out to that distant place when there’s a lot of work to be done right here,” said Steve Schwen, a farmer who travelled from Oak Center, Minn., to the Minnetonka office. “This is where the godfather lives. This is the cartel.”
Schwen testified to the crowd that most of his farming neighbors are now gone from the community he has lived in for 25 years. Like the other protesters, Schwen attributed the farmer exodus to low farm prices because of companies like Cargill keeping the prices down.
“Where are decisions made about these prices? They’re not made on the open market; they’re made in boardrooms, and some of those boardrooms are right here,” Schwen said, motioning to the office building in the distance.
Inside that office, however, Johnson had a different take on the farm situation. Despite the company’s Web site indicating increasing annual net worth, from $5.5 billion in 1995 to nearly $7.5 billion in 1999, Johnson said Cargill’s profits rise and fall with the farmers’ income. He illustrated this point with a chart showing that both the U.S. net farm income and Cargill’s earnings rose in 1996, but have since gradually declined.
“When their prices are good, our business does better,” Johnson said. “In the last three years as prices have come down and farm earningshave declined, our corporate earnings have plummeted, so we have all the incentive we need to turn the demand around.”
Johnson said he thinks the best way to turn the demand around is to open up trading relations with China so American farmers can access that large market.
But expanding global markets would further doom developing countries that are already flooded with cheap American farm commodities, said other “witnesses” at the demonstration.
“As we all know, the lack of competition lets the buyers command a low price below the farmers’ cost of production,” said Kristin Dawkins, who works with the Institute for Agriculture and Trade Policy. “This allows the dominant traders like Cargill to dump cheap grains in markets overseas, driving out the local competition. In many countries of the world, what they mean are peasants.
“In dozens of these countries where the peasants have been driven off the land, the local food supply disappears, shortages occur and, when one of these poor countries can’t afford to buy imported grains and food from the Cargill company and the other exporters, hunger and food insecurity result,” Dawkins said.
Johnson again pointed to the benefits of open markets to ease the problems for citizens of developing countries. Poor farmers will be able to get higher prices for their goods because they will have access to richer markets, he said.
Johnson also addressed the issue of genetic engineering, pointing out that Cargill actually sold its biotech division to Monsanto, one of the world’s biggest biotechnology companies, last year.
Last September, Cargill gave the University a “no-strings-attached” $10 million grant to develop a genomics laboratory, contingent on the state Legislature matching the funds.
“It was our belief that if the University becomes a global leader, it will be good for businesses in Minnesota, it will be good for farmers in Minnesota,” Johnson said.

Max Rust covers University communities and agriculture and welcomes comments at [email protected]