Today's Opinions, Tomorrow's Reality
ADM: Supervillain to the World
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
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
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
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.