The Multinational Monitor


N E W S   M O N I T O R

Corporate Farming in the Pacific Northwest

by Dan Mintie

American agriculture is in crisis. This can be seen by the record numbers of farm foreclosures during 1982, the rapid disappearance of family farms, and the growth of corporate agribusiness. One of the areas where the increasing economic concentration of U.S. agriculture is most pronounced is the Pacific Northwest.

In Washington State, the number of farms has dropped from 80,000 a half-century ago to fewer than 29,000 today. And in Oregon, 5% of the state's farms now control over 90% of the farmland.

As small family-run operations have declined in size and number, they have been replaced by multinational corporations, which have transformed much of the region's agricultural land into "super farms" geared towards supplying giant U.S. food chains and the growing export. markets of East Asia.

Agribusiness got its biggest boost in the Northwest during the late 1960s and early 1970s, when agricultural exports began to be promoted as the answer to the country's balance of trade problems. Large producers found themselves in a position to cash in on huge federal subsidies by bringing marginal land into production, greatly increasing production of crops such as wheat and corn. The size and scope of these operations - and the large capital and energy inputs they required - gave the corporate farms an advantage over smaller producers; the catch-phrase in agriculture became "expand or die. "

The leading investors in Northwest agriculture are U.S. Tobacco, AMFAC and Burlington Northern. More recently, non-farm interests such as Boeing and Seattle First National Bank have been added to this list, signalling a new era of absentee corporate landlords.

Many of these firms are vertically integrated (a process in which a single company controls the various stages of production - from acquisition of raw materials to marketing - of a particular good).

A prime example of this phenomena in Northwest agriculture is the J.R. Simplot Company, based in Boise, Idaho. Owner Jack Simplot - who grows more potatoes than anyone else in the world - sits astride a conglomerate that includes:

  • phosphate mines and fertilizer plants in the U.S. and Canada;
  • timber holdings and mills throughout the U.S. and South Africa which supply Simplot's crating needs;
  • potato processing plants from Minnesota to Argentina;
  • feedlots and ranches in five states, Canada and Columbia which produce offal for Simplot's cattle;
  • Ore-Ida Foods, Inc. Simplot's distribution and marketing arm.

Simplot also holds a seat on the board of the McDonalds Corporation, which buys 80% of its french fries from Simplot.

Vertical integration gives corporations the power to put smaller producers out of business - practically at will. A 1% increase in potato production will drive down the price of potatoes by 7%, according to one estimate. And while a vertically integrated producer can make up this loss in some other area, few small farmers can survive a succession of price cuts, and are forced to sell out. Most of the Idaho potato farms that existed when Simplot was getting started 60 years ago have long since disappeared.

The timber industry: a new form of agribusiness

Simplot's potato empire is dwarfed by another Northwest giant: the Weyerhauser Corporation. This Tacoma-based conglomerate holds title to 1.7 million acres of prime timber land in Washington and 1.1 million acres in Oregon.

A major aspect of Weyerhauser's operations has been log exports to East Asia, particularly the huge Japanese market. Since the late 1960s, Japan has become a major importer of logs from all over the world, especially from British Columbia and the Pacific Northwest. Taking advantage of this growing market - and U.S. laws that favor log exports - the major timber corporations export millions of dollars worth of logs to Japan each year. These log exports - about 20% of the Washington and Oregon harvest - have become crucial to the profits of the companies. In 1978, for example, Weyerhauser sold some 5335 million worth of logs to Japan. Profits from these sales accounted for a quarter of the company's $791 million in operating earnings. One Weyerhauser executive told the Wall Street Journal in 1980 that "the exports here are our only salvation. The Northwest is busting its tail to export."

"We're all accustomed to thinking of timber as a natural resource," sociologist and community organizer Don Comstock said in an address to a recent conference on Northwest agriculture in Molalla, Oregon. "Well, this is simply no longer the case. Trees are now planted and harvested like any other crop and we're seeing the inception of the same petrochemical cycles (of fertilizers, pesticides, etc.) in the timber industry that we have in agribusiness. We're even beginning to see migrant labor; Weyerhauser has started using migrants to replant seedlings.

"Seen in this light," Comstock continued, "timber is the agricultural export of the Northwest, and this raises some interesting questions. How many family tree farmers do you know? Weyerhauser's Northwest farm makes Tenneco's holdings look like a few cotton plants in somebody's backyard."

Farmers, economists and activists in the Northwest are raising questions about the region's preoccupation with agricultural exports and the relationship of such exports to the country's trade deficit. Mort Hantman of the San Francisco-based Institute for Food and Development Policy (IFDP) pointed out to the Siolalla conference that in 1980 the 1; .5. spent the equivalent of 25� for imported oil for each dollar earned exporting food. IFDP's research now indicates that the U.S. uses the equivalent of 2.1 billion gallons of fuel each year in the form of fertilizers to offset the effects of soil erosion - a problem many experts believe is caused by the stress on export agriculture.

But escalating costs of fuel and fertilizer are beginning to hurt agribusiness; a 40,000 acre potato farm partially owned by Simplot was liquidated recently. And on the other side of the scale, there has been a slight increase in the last few years of the number of small farms operating in both Washington and Oregon.

Dan Mintie, a writer and food activist, lives in Seattle.

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