Tim: is this a reason why you don't support Gov't intervention?
According to a study by the right-wing think-tank the Cato Institute, at least 43% of ADM's annual profits are from products heavily subsidised or protected by the American government" [3].
An excellent article in Mother Jones magazine in 1995 demonstrates that "No other U.S. company is so reliant on politicians and governments to butter its bread" [4]. It notes 3 core areas where ADM is helped along by US government programs:
1) maize subsidies - these make a relatively small contribution to ADM's finances, but with its heavy focus on processing ADM benefits (unlike Cargill) from the stability they provide in a volatile market;
2) the sugar program - by limiting US sugar production, the government keeps the price high, and so keeps customers like Coca-Cola favouring ADM's maize sweeteners over cane sugar (which they used to use);
3) ethanol subsidy - this is by far the most significant, a tax credit to producers of ethanol used as car fuel, amounting to $3.5 bn over 5 years (about half of which goes to ADM) [5].
ADM pays well to ensure the continuation of such favourable treatment. For example, in the 1992 election Andreas and his associates contributed $1.4m to party organisations and $345,000 to individual candidates; in 1994 they gave $657,000 to parties and $224,000 to individuals. In 1994, at the same time as President Clinton pushed through legislation requiring 30% of petrol sold in America's most polluted cities to contain ethanol products, he was given a $100,000 donation [6]. Other beneficiaries have included Richard Nixon and Bob Dole.
A further example was revealed by Mother Jones in 1998. AARC (Alternative Agricultural Research and Commercialization) Corp is a venture capital firm wholly owned by the US Department of Agriculture, which aims to boost the development of "environmentally friendly" non-food products from farm and forest materials. In 1995, AARC Corp.'s then chairman, Martin Andreas, was found to have steered $2.4 million in research money to ADM projects or business interest [7]. Martin was a senior vice president of ADM and a nephew of Dwayne Andreas,.
The Centre for Responsive Politics reports that in the 1997/98 election cycle, ADM paid $200,500 to federal candidates (53% Republican, 47% Democrats), in 1999/2000 so far (as at 1/6/00) $142,000 (49% Democrats, 51% Republicans). As for contributions to parties, in 1997-1998 it was $518 000 (51% Democrat Party, 49% Republican Party), and so far in 1999/2000 has paid $245,000 to the Republican and $50,000 to the Democrat Party[8].
In 1993, Dwayne Andreas and his wife, Inez, were among 10 individuals who agreed to pay civil fines for exceeding campaign contribution limits in the 1988 campaign [9]. |
