Rep. Ted Winter

News that agribusiness giant Cargill Inc.

Monday, January 21, 2002

News that agribusiness giant Cargill Inc. posted a 34 percent increase in profits – and is on track to have its best year since 1997, having made $522 million in the last half of 2001 – might take some people by surprise. After all, prices for farm commodities still haven’t improved and farmers keep losing money and leaving the land. So how is it that Cargill can make money in agriculture, but thousands of family farmers across Minnesota can’t?

The answer to that question is Cargill itself. The company was once primarily a buyer and seller of grain. Now its main business is selling the inputs that farmers have to buy and marketing and trading the grain those farmers produce. And in more and more places, Cargill is displacing the farmer and taking over the operation itself – evading and defying state laws designed to prevent direct corporate ownership of farms through various contracting schemes.

Cargill makes its money by selling the farmer feed, seed, fertilizer and chemicals at retail – and buying the farmers’ grain at wholesale. Is it any wonder that Cargill makes a profit while the typical farmer loses money?

Cargill swings a big club. It has a battalion of lobbyists in Washington and the state capitals. It’s held great influence over American farm and trade policy under both Democrats and Republicans. It has prevented enactment of any effective supply-management initiatives, such as restoring the farmer-owned grain reserve. It has opposed higher loan rates. It has promoted a farm program that encourages overproduction, so that farmers have to bid to sell their grain instead of having buyers bid to purchase it. And it promotes taxpayer-subsidized overseas sales that don’t put a dime in the farmers’ pocket.

Moreover, Cargill is largely unaccountable to the public or the government. Because Cargill’s stock is not traded in the public stock exchanges, it does not have to comply with a whole host of auditing, reporting and disclosure requirements imposed on companies listed on the stock exchanges.

Cargill is posting near-record profits despite the fact that even this country’s most-efficient farmers can’t survive without government subsidies. A recent study by farm-management analysts found that a 600-acre corn and soybean operation would lose an average of $38,000 a year before government aid. And even with government aid, that farmer would still be $8,000 in the hole. And those figures assumed better yields and slightly higher prices than most of us who drive tractors actually receive. The farmer doesn’t even receive a minimum wage for his labor – or for his wife’s labor or his kids’ labor.

This situation benefits Cargill because it lets Cargill buy grain at low prices, with the government helping pick up the tab. If farmers were able to charge Cargill a price for grain that enabled them to support themselves and their families without a government subsidy, Cargill sure wouldn’t be posting profits like it is. The farm subsidy doesn’t really support the farmer – it really supports Cargill, because it lets them buy grain cheaply from farmers living on government payments.

Many people have been calling for an overhaul of federal farm programs that will reduce the cost of these programs to taxpayers. Certainly, most farmers want to make their living in the market, not off the government. Will Cargill let that happen? Or will this monolithic, unaccountable corporate behemoth continue to hold farmers hostage to its own selfish interests?

The people of rural Minnesota can have a voice in this. Congress will be debating the new farm bill in February and March. Now is the time for every rural resident – not just farmers, but all of us who live in rural Minnesota and depend on the farm economy – to be in contact with our U.S. Senators and Congressman. Tell your elected federal legislators you want payments targeted to family farmers, a ban on packer ownership of livestock, higher loan rates and farmer-controlled supply-management mechanisms. If the people of rural Minnesota speak with one voice, we can be louder than Cargill. And if we get a farm program designed to help farmers instead of giant agribusiness, maybe some of us will begin showing profits like Cargill’s.

State Rep. Ted Winter (DFL-Fulda) operates a family farm outside Fulda in rural Nobles County. A former Majority Leader in the Minnesota House of Representatives, he has represented District 22A in southwestern Minnesota since 1986.