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American Farm Bureau Federation : The Enemy Within

Monitoring Corporate Agribusiness From a Public Interest Perspective

Issue # 73
May 8, 2000
By: A.V. Krebs

Alarming as Mike Wallace's recent "60 Minutes" essay on the American Farm Bureau Federation (AFBF) was to millions of Sunday evening television viewers, the scandalous history of the 80-year old organization also reveals that time after time it has ignored the best interests of its farm members in favor of those goals and objectives favoring corporate agribusiness.

When one reads Dale Kramer's timely The TRUTH About the Farm Bureau, published in the mid-30's and reprinted in 1950, or Wesley McCune's well-documented The Farm Bloc, published in 1943, or Samuel R. Berger's telling Dollar Harvest: An Expose of the Farm Bureau, published in 1971, or Grant McConnell's thoughtful The Decline of Agrarian Democracy published in 1977 it is clear to see that the Farm Bureau has indeed been the "enemy within" agriculture, that it's leadership has paid scant attention to the needs of family farmers while enriching themselves at the expense of those same members.

Indeed with the long train of policy manipulations and abuse of its farm membership as its legacy being exposed by such investigative reports as "60 Minutes" and the recent Defenders of the Wildlife Amber Waves of Gain, the Farm Bureau's day of reckoning may be at hand and Nebraska's famed U.S. Senator George Norris's thundering prophecy seven decades ago may now become a reality: "The time will come when the rank and file of American farmers will realize by whom they are being deceived."


An enduring mystery of the post-World War II era is that while the American Farm Bureau Federation has grown so politically powerful, both within the farm community and in the halls of congress, pushing both its legislative agenda while destroying agencies and organizations it saw as a threat, there has Keen an almost total lack of critical analysis by farmers or their elected representatives about the ways and the means and the goals the Farm Bureau often employs in its pursuit of political and economic power.

The story of Rep. Joseph Resnick (Dem.-N.Y.) and the fate of his 1967inquiry into the affairs of the Farm Bureau possibly clarifies why we have seen so few "profiles in courage" in evidence in the Congress of the United States in all the years that the Farm Bureau has claimed to be "the voice of American agriculture."

In June, 1967, Resnick, Chairman of the House Agriculture Subcommittee on rural development, was holding unprecedented hearings on the affects of Federal programs in rural America and their role in alleviating rural poverty. The AFBF was invited to testify in regards to the role they were playing in meeting the needs of the rural poor, but at the initial hearing time expired before the Farm Bureau representative could complete his testimony.

At the following week's hearings and before the completion of the Farm bureau representative's testimony, Resnick had uncovered material strongly indicating that the Farm Bureau had substantial nonfarm membership and that it was conducting widespread and questionable financial and commercial activities. Resnick further noted that the Bureau was a gigantic interlocking, nationwide combine of insurance and reinsurance companies which were unrelated to the interests of farmers.

Once again, however, time expired before the Farm Bureau could complete its testimony or challenge Resnick's charges, so the Congressman invited the Bureau representative to come back before the committee and complete his remarks.

In the following week, however, Roger Fleming, the then AFBF secretary-treasurer, dispatched a letter to House Agriculture Committee chairman W.R. Poage, with copies to each committee member, specifying those terms by which he would appear before Resnick to continue the Bureau's testimony. In effect the letter was what Resnick later called "a blueprint for Agriculture Committee action to silence me and prevent me from making further revelations about the Farm Bureau." In part the letter stated:

"In the interest of justice and fair play we urge the full committee give immediate consideration to the charges made by [Resnick] against the Farm Bureau organization (county, state and national) . . . if the Committee does not concur in these charges, then we feel that the Committee should clear the record by adopting a resolution in which it disassociates itself from the attacks on the Farm Bureau made by [Resnick] and by making known to the public at an early date its disposition of this matter."

Within 24 hours of receiving the letter five members of Resnickís subcommittee, four of which were reportedly Farm Bureau members, issued a statement attacking their chairman's criticisms of the farm Bureau with language almost identical to that in the Bureau letter.

Their statement was followed by action unprecedented in the history of the U.S. Congress. Within 48 hours of receiving Fleming's letter, the full Ag Committee met behind closed doors in executive session without Resnick present and issued a statement declaring it did "in no manner endorse, condone or support the personal attack launched by the Chairman of the Subcommittee on Rural Development upon the AFBF."

At the same time, the committee was issuing its statement, the Farm bureau's Fleming was distributing a press release which stated: "This judgment by his Congressional colleagues should make it clear that Congressman Resnick's charges against the Farm Bureau Federation are reckless, unwarranted, and unfounded." Later,in a speech to the House of Representatives Resnick reflected:

"While any reading of the committee resolution would make it obvious that Mr. Fleming's statement did not contain a single grain of truth, and was in no way related to the specific and documented charges I have made against the Farm Bureau, not one single member of the committee has risen to criticize him for it . .. [The AFBF] reaction, and the reaction of the Committee on Agriculture is all the more remarkable when we recognize that I am being attacked --- not for telling lies about the Farm Bureau --- but for revealing the truth. The plain fact is that this powerful organization has at no time denied or contradicted any of the revelations I have made about its operations. But before my subcommittee they were evasive, tight-lipped and downright untruthful."

Later, Resnick added:

"The leaders of the Farm Bureau run their organization with the heavy-handed tactics of a rural Mafia. As long as the members pay their dues and their insurance premiums, keep the Farm Bureau gas bill paid up to date, and do not run up too sizable a bill at the Farm Bureau's so-called cooperative, they are entitled to all the benefits that membership in the Farm Bureau bestows on an individual. But, if anyone dares to question policy or voice disapproval loud enough, the wrath of the magnates of the Merchandise Mart will rain down upon him and his."

Or as one former woman officer of a county Farm Bureau wrote to Rep. Resnick: "Most people talk to convey a meaning, the Farm Bureau talks to keep you from figuring out the meaning."

A review of Congressman Joseph Resnick's "revelations" today concerning the American Farm Bureau Federation's operations in the 1960's has led an ever increasing number of angry and disillusioned family farmers to realize that a similar, if not identical set, of charges could legitimately be made against the present AFBF organization. Resnick's charges included

* The Farm Bureau is not the organization of farmers it claims to be. Substantial portion of its membership --- possibly less than half --- have no agricultural interest whatsoever. (The USDA Agricultural Census reported in 1997 that there were 1.9 million farmers in the U.S. The Farm Bureau boasts a membership of 4.9million members.)

*The Farm Bureau has used the American farmer to build one of the largest insurance and financial empires in the United states.

* The Bureau has misrepresented itself to the Internal Revenue Service in order to obtain a tax exemption, and to the clerks of both Houses of Congress.

* The directors and officers of the Farm Bureau are also directors and officers of insurance companies directly and indirectly controlled and owned by various State Farm Bureaus. As a result of these interlocking directorates the Farm Bureau could well be in violation of antitrust laws.

* The Farm Bureau has taken advantage of its tax exempt status in order to expand its business activities which cover the fields of insurance, real estate, shopping centers, fertilizer, mutual funds, gas stations, oil wells, grain storage, petroleum refineries, and a considerable variety of other such ventures.

* Because of its widespread commercial interests the Farm Bureau has misrepresented its true nature in its dealings with farmers and its statements to Congressional committees.

* As a tax-exempt organization the Farm Bureau has been improperly competing in commercial activities with private taxpaying business concerns, thus enjoying an unfair competitive advantage.

* The Farm Bureau has torpedoed American farmers by posing as an organization representing their interests when in fact, the Bureau's widespread commercial activities --- which include the operation of businesses which sell to the farmer and buy from the farmer --- puts them into a position of representing a point of view antagonistic to the interests of the farmer.

* The Farm Bureau's commercial activities have generated funds which have found their way illegally into political and lobbying activities.

Despite the admonition from his Congressional colleagues Rep. Joeseph Resnick continued his investigation and attacks on the Farm Bureau. In the meantime, he received hundreds of letters from farmers throughout the country ("One might say that the farmers of America have been my unofficial investigative force in the field") calling his attention to a plethora of questionable Farm Bureau practices.

Charging that the Farm Bureau had done more to prevent economic and social advancement than any other organization in America, Resnick told the pathetic stories he had heard about the misery of migrant workers and the poverty of rural communities throughout the nation, such as Belle Glade, Florida (which in later years would become known as "the AIDS capital of the world") where the second largest industry was the manufacture of baby coffins.

"The Farm Bureau," Resnick declared, "is entitled to its full share of the blame for the fact that our rural areas are burdened with the most poverty, highest unemployment, least social and economic development, and poorest health facilities in the Nation. Their crime has not been mere indifference. Quite the contrary. They have intensively fought every attempt to correct the ills."

There is nothing to which the Farm Bureau has dedicated more of its resources, save the dismantling of Federal farm programs, than fighting to destroy attempts by farm labor to achieve economic and social justice.

From both legislative and often times physical prevention of the organization of farm workers to the prohibiting of strikes, from promoting the importation of foreign migrant laborers to denying coverage of social security and unemployment insurance to farm workers, from opposing coverage of field workers by minimum wage and hour laws to restricting enforcement of health and safety laws in the field (e.g., its 1985 platform called for the repeal of the Occupational Safety and Health Act (OSHA)), the Farm Bureau has devoted countless time and effort to stifling progress in rural America.

When organized labor won their right to collectively bargain with their employer under provisions of the Wagner Act in the 1930's it was the AFBF that successfully campaigned and lobbied against the inclusion of farm labor, a stance they still maintain to this day as farm workers continue to struggle to obtain those rights under law enjoyed by the rest of organized labor.

Also, as recently as 1985 the Texas Farm Bureau voiced its opposition to federal minimum wage for farm workers and reaffirmed its long-standing opposition to child labor legislation, workers' compensation and unemployment compensation, and the abolition of the back-breaking short-handled hoe.

Here too, the Bureau's vested interests are blatant. In many farm areas, the Farm Bureau has not only operated farm labor camps, but served as a contractor service in providing local growers with seasonal workers. Despite fatal fires in what have been described as "squalid" labor camps and fatal accidents involving over-crowded work buses, the Farm Bureau has constantly opposed legislation to correct unsafe conditions claiming each time that such federal or state action would be inappropriate since no "dire emergency" exists.

The Bureau's role as a farm labor contractor no doubt explains why when in 1983 the North Carolina State Farm Bureau opposed anti-slavery legislation.

Nothing typifies the Farm Bureau's attitude toward rural poverty and the people who are forced to suffer inhuman conditions in rural America more poignantly than a statement by the AFBF's one time president Charles Schuman in an interview with the St. Louis Post Dispatch a number of years ago.

First, he defined poverty as "a combination of lack of education, training and lack of ambition . . .I don't think the Federal Government can do anything about it except spend a lot of money . . .thievery things which have made our Nation relatively free of poverty --- freedom to work or play, freedom to spend or save, freedom to own a TV set and a Cadillac but live in a shack in order to do so. We are already too far down the road that lead to socialism --- a morally decrepit philosophy which destroys the initiative to do better."

Later, Schuman, while conceding that the U.S. indeed had "poverty-stricken families," wrote in Nation's Agriculture: "What kind of poverty is this. With abundant educational and job opportunities on every hand, it must be primarily a poverty of the mind and soul --- a lack of desire."

In all of its public policy statements, which include everything from pornography (there against it!), to off-track betting, from the libraries of ex-presidents to pay TV, from ROTC to the National council of Churches, the Farm Bureau never quite gets around to addressing itself to rural poverty. Moreover, it has openly fought against the establishment of Volunteers in Service to America (VISTA) and attempted to stop the activities of the National association for the Advancement of Colored People's (NAACP) Legal Defense Fund and the National Migrant Ministryís efforts to assist farm workers and the rural poor.

In other areas of agriculture the Farm Bureau has distorted the issues, used scare tactics and opposed pro-family farm legislation that conflicted with its own self-interests. In March, 1985,for example, in the midst of the nation's farm debt crisis, it called on Congress to defeat national legislation requiring the secretary of Agriculture to grant deferrals and forego foreclosures on FmHA loans.

During his late 1960's investigation of the AFBF, Congressman Joseph Resnick sought to show how both the Farm Bureau supply and marketing cooperatives ranked as "one of the most gigantic and successful shell games ever practiced."

By transferring their tax burden from themselves to their patrons, Resnick charged, these "farm cooperatives" evaded federal income taxes. The vehicle for such a transfer --- worthless dividend certificates --- was one many farmers had learned about the hard way. Federal tax laws allowed the Farm Bureau co-ops to distribute such worthless pieces of paper instead of money, and then deduct their face value from the co-op's earnings before figuring their taxes.

At the same time the Farm Bureau had used such "kept money" to expand into contract farming and drive independent millers, supply houses, oil dealers, warehouses, and grain elevators out of business. It had likewise made individual farmers captives of the Farm Bureau Co-op and/or its feed companies. Through this process the co-ops had been taking over the farm supply and commodity marketing business by buying up and absorbing private independent companies and becoming gigantic businesses with management effectively insulated from the farmer patron, who by now had little real voice in the decision making.

The Farm Bureau, Resnick also noted, had been repeatedly telling the IRS that its membership was limited to people who "are engaged in carrying on a farm or farms or who have a major agricultural interest." Branding such reports to the IRS as "an outright lie" Resnick pointed out in Illinois (in a pattern that persists to this day) in 1967, the state where the Farm Bureau has its national headquarters (often referred to as the "agricultural pentagon") and its largest state organization, there was a loss of 9000 farms while the State Farm Bureau showed an increase in membership of 10,681.

Discussing the Farm Bureau's membership policies, Resnick told many stories he had heard of what some farmers called the "gestapo-like tactics" on the part of the Farm Bureau management; how they waged (in the Bureau's own words) "neutralization" campaigns against ministers who spoke out against them and how members who questioned policy would suddenly find their Farm Bureau insurance policies canceled.

Another area of AFBF activity that Rep. Resnick found alarming at the time was the Farm Bureau's close ties with the political far right in the U.S. "What might once have been conservative, business-oriented organization is now considerably more," the New York Congressman declared in 1968. "By my calculation, the farm Bureau is the most efficient conduit now in existence for the dissemination of right-wing propaganda. The bureau is a perfect sewer line for transporting right-wing ideology, particularly to our young people."

It would be unfair to blame the AFBF entirely for the recent spate of fascist, racist, anti-Semitic vigilante farm groups which have sprung up throughout the U.S. in the past 20-25 years, born in frustration and nurtured by a continuing farm depression. However, the Farm Bureau, through its long-standing role as a visible propaganda agent for right-wing extremism, certainly made itself the spawning ground for the misdirected, unsocial and violent behavior that has become the hallmark in many of the nation's farm communities.

JOSEPH RESNICK, 1924-1969 --- R.I.P.
In the spring, 1969 Congressman Joseph Resnick left Washington, D.C. and returned to private law practice. He still harbored, however, a deep and abiding interest in the AFBF. He and his former staff person, Samuel R. Berger, decided to co-author a book detailing the activities of the Farm Bureau and attempt to answer those questions that the Congressman's earlier probes had raised. Berger traveled across the country, interviewing hundreds of people and reviewing pages and pages of Congressional documents amassed during and after Resnick's hearings. Suddenly at age 45, Resnick died in October, 1969.

Berger, now head of Clinton's National Security Agency (NSA) doggedly pursued the investigation and in 1971 authored Dollar Harvest: An Expose of the Farm Bureau. Curiously, in Bergerís official biography the book is now simply referred to as "a book on American rural politics" and in all the newspaper accounts and profiles of Berger since he has taken over as the head of the NSA no mention is made of his authorship of Dollar Harvest.

Nevertheless, in chapter after chapter Berger details how the Farm Bureau could more accurately be described not as a farm organization, but as a multi-billion dollar business combine with interests ranging from insurance to oil, fertilizer to finance, mutual funds to urban shopping centers.

"The farmer" he noted, "has increasingly become the customer, not the constituent of an organization that today regards agriculture largely as the market for its own goods and services, as the cornerstone of a commercial empire."

Berger goes to show how the Farm Bureau's political power stemmed first from its huge business earnings that are frequently siphoned off (while the IRS is busy elsewhere) into tax-exempt state and national Farm Bureau chapters to be used for lobbying and other political ventures. Second, the Farm Bureauís political power has been enhanced by the public and the Congress's long-standing acceptance of the AFBF as "the voice of American agriculture," when in fact a near majority of the membership joined the Bureau only as a prerequisite to buying its insurance.

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