I
n
late April 2003, U.S. Agriculture Secretary Ann M. Veneman, understanding
that “the opportunities are immense,” appointed Dan Amstutz
to head Iraq’s agricultural reconstruction. Amstutz will also
serve as Veneman’s personal liaison with American military
officials in the country. By naming Amstutz, Veneman ensured U.S.
agribusiness interests that they will play a significant role in
the future agricultural development of the country.
“We
are extremely pleased to be able to draw upon someone with Dan Amstutz’s
background and experience for this extremely important task,”
Veneman said in a USDA-issued News Release. “He will help us
achieve our national objective of creating a democratic and prosperous
Iraq while at the same time best utilize the resources of our farmers
and food industry in the effort.” The USDA will play a “key
role in the U.S. Government’s overall efforts to create a democratic,
market driven economy in Iraq.”
Amstutz
brings a silo-full of government and corporate experience to the
project. He was Undersecretary for International Affairs and Commodity
Programs from 1983 to 1987 during the Reagan administration, and
served as ambassador and chief negotiator for agriculture during
the Uruguay Round General Agreement on Tariffs and Trade (GATT)
talks in 1987-1989. He is a former executive with the Cargill Corporation—the
biggest grain exporter in the world—and is a former executive
with the International Wheat Council, as well as a past president
of the North American Grain Export Association.
More
recently, he has been president of Amstutz & Company, a Washington,
DC-based consulting firm specializing in agribusiness and international
trade issues.
While
Veneman was effusive in her praise of Amstutz, Oxfam, the international
aid agency, wasn’t nearly as enthusiastic. “Putting Dan
Amstutz in charge of agricultural reconstruction in Iraq is like
putting Saddam Hussein in the chair of a human rights commission,”
said Kevin Watkins, Oxfam’s policy director. “This guy
is uniquely well placed to advance the commercial interests of American
grain companies and bust open the Iraqi market, but singularly ill
equipped to lead a reconstruction effort in a develop- ing country.”
In
his first press conference—on May 1 in Kuwait—Amstutz
was upbeat in his “assessment of Iraq’s food growing potential
and the country’s swift recovery from what he later termed
its experiment in collective farming,” reported Alan Guebert,
an award-winning free- lance agricultural journalist and syndicated
columnist. Amstutz believes that the future of food production in
Iraq is inextricably linked to getting the country’s oil fields
up and running. “We need the oil, the fuel, the turbines to
generate the power and we need power to mill the wheat into flour
and to pump the water in the irrigation areas,” he said.
Iraq’s
rapid decline in agricultural production since 1991 was largely
due to United Nations sanctions that hampered its ability to “modernize”—buy
new technology, machinery and parts—and a food price system
that lacked “incentive,” Amstutz said. “Individual
Iraqis paid 12 cents, not $12, 12 cents a month for their food basket
which included flour, rice, vegetable oil and poultry. Clearly,
a price level dictated by the government like that drains agriculture
of incentive.”
To
many critics, Amstutz’s relationship with Cargill is a surefire
sign that a major league corporate makeover is in the cards for
the country’s agricultural sector. At the end of the press
conference Amstutz was asked about that relationship. He replied:
“It is absolutely true that I advocate free markets for healthy
agriculture, a market-oriented system. I left Cargill in 1978 and
have had no affiliation with them whatsoever. I can tell you I have
never been accused of showing favoritism to any company all the
time I was in public service, and the time I was in governmental
service, people that know me and know my record know that comment
by Oxfam published in a broad sheet press that is similar to some
of the other press over there, is just not true.”
Was
Amstutz telling the truth? In late October 2000, Amstutz was named
chairperson of the board of directors of a new company established
by ADM, Cargill, Cenex Harvest States, DuPont, and Louis Dreyfuss.
According to the company’s press release, Pradium Inc. was
set up as “a separate company that will operate an online business-to-business
marketplace and information resource.”
“In
short,” writes Guebert, “Pradium, owned and operated by
the biggest transnational ag firms in the world, was to be a global,
unregulated secondary market for ag commodities. But business was
tough and on February 15, 2001, Pradium merged with Rooster.com,
an electronic market for farmers operated by many of the same global
firms. The merger failed to jumpstart Rooster or Pradium. On December
10, 2001, Rooster was shut down, taking Pradium, and presumably
Amstutz, with it. Was Amstutz an active participant in Pradium or
was he simply window dressing to attract business to the short-lived
enterprise?”
H
ow
will Amstutz’s agricultural plan proceed? Iraq’s 2003
wheat harvest will “match” last year’s 1-1.25 million
tons, Lee Schatz, a senior U.S. official with the Office of Reconstruction
and Humanitarian Assistance, recently told Reuters. That means the
country will need to import about three million tons of wheat over
the next 12 months. “We would expect that in an open and fair
competition in agriculture products, the United States will once
again have a place in the Iraqi market,” Schatz said.
Australia,
wary of getting shut out of that market, has already sent a team
of agricultural experts, headed by Trevor Flugge—the former
“high-profile” chairperson of Australia’s monopoly
wheat exporter AWB Ltd—to work with Iraqi officials and Amstutz’s
team, New Zealand’s
Dominion Post
recently reported.
Schatz
also serves as the deputy director of the Livestock, Dairy and Poultry
division of the U.S. Department of Agriculture’s Foreign Agricultural
Service. He said Iraq’s poultry, which employs between 500,000
and 600,000 people, “will have to import all its inputs this
year from hatching eggs to vaccines.”
Another
nagging issue in need of settlement is the $2 billion of bad loans,
plus $1 billion in interest charges, Iraq still owes the U.S. Department
of Agriculture from the 1980s when the Reagan and Bush administration’s
were hungry to do business with Saddam Hussein’s Iraq. “A
decision about that default will have to be made before any consideration
of any new (export) credits can be considered,” Schatz pointed
out.
The
appointment of Amstutz could “threaten the country’s agriculture
sector,” Inter Press News Service’s Emad Mekay writes.
“Amstutz drafted the original text of the current Uruguay Round
Agreement on Agriculture within the World Trade Organization, considered
by many developing countries and pro-development groups as innately
unjust. The agreement allows rich countries to dump their subsidy-backed
agricultural surpluses on world markets, depressing prices to levels
at which producers in developing nations can no longer compete.”
Will
the “trade wars,” “grain wars,” and “poultry
wars” add to the chaos of post war Iraq? Stay tuned.
Bill Berkowitz
is a freelance writer covering conservative politics.
