WASHINGTON, DC, September 22, 1998 --  

Just as a federal jury was convicting Archer Daniels Midland executives of a conspiracy to fix agricultural prices, Republican congressmen were making a back-room deal to funnel $4 billion in new farm subsidies into the same corrupt price-fixing system that brought about the scandal.¹

At issue for Congressional leaders is pressure from the farm lobby to do something about declining agricultural prices. Eager to please everyone in an election year, Congressmen figure they curry favor with agricultural contributors while claiming to be working to save the family farm.

But the timing of the Republican decision with the verdict in the ADM case should be enough to give anyone pause. The court ruling against ADM means that Michael Andreas, son of ADM Chairman Dwayne O. Andreas, will likely face time in prison for his efforts to fix the price of the feed additive lysine.²

This scandal is just the tip of the iceberg, for both ADM and America's farmers. ADM's shady role in setting agricultural prices in the United States is so pervasive that it is impossible to separate the company from the issue of farm subsidies. Unlike the lysine case, ADM's efforts to set the prices of other agricultural products are not technically illegal. The company uses a corrupt system of farm subsidies, tax breaks and other forms of corporate welfare.

Start with the sugar program. ADM successfully lobbied for sugar price supports during the 1970s that force Americans to pay almost twice the world price for sugar. This program makes corn sweeteners-which ADM produces in great quantities-competitive enough to capture the lucrative soft drink market and send billions of dollars into ADM's coffers. It's a great deal for ADM, but a terrible one for most Americans. Instead of buying soft drinks made with inexpensive cane sugar, each year U.S. consumers are forced to spend billions of dollars more on products containing ADM's more expensive corn sweeteners.

But ADM's corrupt practices don't end there. The company has also successfully lobbied the Clinton administration to mandate use of ethanol blends in gasoline. This mandate, when combined with huge tax-breaks given to ethanol-based fuels, has proven extremely lucrative for ADM, since it is the nation's largest producer of ethanol. As in the case of corn sweeteners, ADM makes this money on the backs of consumers. The Cato Institute's James Bovard estimates that "every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30."³

Of course, none of this swindling would be possible without the helping hand of Congress and the President. ADM's Dwayne Andreas rewards politicians for their loyal service with massive contributions. In each election, Andreas gives hundreds of thousands of dollars to personal campaigns and PACs controlled by House Speaker Newt Gingrich, President Clinton, and other leaders in Congress. The effects of these contributions were shown recently when Gingrich quashed Republican efforts to remove tax-breaks on ethanol.⁴

Equally disturbing is ADM's corrupting influence on the press, which may explain why it has avoided high-profile scrutiny. ADM is a major media advertiser, and targets its ads towards influential network news programs. Anyone who has watched Sunday morning talk shows knows that ADM's "supermarket to the world" spots often make up the vast majority of paid advertising on newsmaker programs. The company's influence has grown so strong that after retiring from the ABC Network's This Week program last year, veteran journalist David Brinkley actually became the spokesman for ADM.

What does this have to do with farmers? Plenty.

Besides being a boon to ADM, the government's price supports and mandates artificially increase the price of agricultural commodities and thus enrich many farmers as well. That a new "farm crisis" has developed despite this pervasive corruption proves just how inefficient and obsolete some farmers have become. The more profitable operators have abandoned all pretense of making a traditional living, and instead pursued strategies that rake in the government money made possible by ADM's system of corruption.

Such ideas are insulting to the American ethos, which has an almost religious reverence for the concept of the "family farm." But the sad truth is that the family farm is all but dead. Today, the population working in farm-based jobs has declined to 2.5 percent of the population.⁵ Those that remain bear little resemblance to the family farm that is so romanticized in our culture. Much more typical is the large-scale corporate farm that is wrapped up in ADM's corrupt web of government subsidies, price supports, and usage mandates.

It is time for Americans to overcome their irrational support for "pro-farm" policies. Such legislation enriches a small number of politically-connected, large-scale operations while often hurting farmers who make a living from livestock and non-grain-based products. If they begin to recognize the innate flaws and corruption of the government-dictated pricing scheme, the 97.5 percent of Americans not employed in farming can easily overcome the lobby's choke-hold on politics.

Notes:

1. The Washington Post, With Crops Up and Prices Down, Farmers are Looking East, September 20, 1998
   
   
2. The Chicago Tribune, Three ADM Execs Found Guilty, September 17, 1998
   
   
3. The Cato Institute, Archer Daniels Midland: A Case Study in Corporate Welfare, 1995
   
   
4. The Chicago Tribune, Compensation, Role Diminish for Longtime Leader of Grain Processor, September 17, 1998
   
   
5. The World Almanac and Book of Facts 1998, U.S. Department of Agriculture statistics, 1996