THE HANDSTAND

DECEMBER 2003

European Commission  

Der Standard  Berlingske Tidende  

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Factory Farms - 'More
Dangerous Than
Global Terrorism'
By Daniel Howden and Kamil Tchorek
The Independent - UK
11-21-3Rense.com

WIECKOWICE, Poland -- The metal hangar juts into the autumnal mist - a 21st century blot on the otherwise medieval landscape of rural western Poland. The barbed wire and watchman indicate a military base, but the stench and the squealing could only come from pigs, thousands of them, packed into this corrugated iron factory.

 

The village of Wieckowice is the latest outpost in a latter-day invasion of Poland, led by the world's largest pork production company which threatens to destroy Europe's last bastion of traditional farming. Moreover, it's doing so with EU money.

 

Smithfield Foods, based in Virginia, has made millions in the US by industrialising farming, creating hog factories holding tens of thousands of pigs. The consequences for the environment, independent farmers and rural communities from North Carolina to Iowa have been catastrophic.

 

According to the US Senator Robert Kennedy Jnr, what is at stake is impossible to exaggerate. "Factory farms are more dangerous for our lifestyle and democracy than Osama bin Laden and global terrorism," he said. Now Smithfields has forged a bridgehead in Europe and Joseph W Luter III, the company's chief executive, boasts that he will turn the former communist country on the brink of full EU membership into the "Iowa of Europe". In Iowa there are five times as many pigs as people living in the rural state, 14 million in total, and local anger at the mega-farms is dominating the Democratic Party primaries. They are angry for the same reason that the windows in Wieckowice's school are never opened: the smell.

 

"The stench got so bad that they couldn't open the windows of the school," says local activist Jurek Dusczynski. People who live near the factory farms complain of nausea, and asthma attacks . Children at the school village began vomiting. Activists point to US studies which they claim show that factory farm workers and their neighbours contract lung disease, eye infections, nosebleeds and gastro intestinal illness.

 

Hogs produce up to ten times the amount of waste as the average human. This waste is a cocktail of up to 400 dangerous substances, including heavy metals, antibiotics, hormones, pesticides, and dozens of disease-causing viruses and microbes. If this finds its way into nearby rivers or seeps into the water table the results are dramatic. "Everywhere this company has operated, there has been gross environmental degradation from liquefied hog faeces," says Tom Garrett, an ecologist from Wyoming and a long-time opponent of Smithfield who has tracked his adversary from the pork-belt in America to Poland. In 1997, Smithfield paid $12.6m in penalties under the US Clean Water Act.

 

The shock for Poland's traditional farmers is nothing compared with the misery experienced by the pigs, crammed into pens often so narrow that they cannot turn around. Noise levels can reach 95 decibels and the ventilation system must run constantly or the animals would asphyxiate. Overcrowding at Wieckowice this year led to the premature deaths of hundreds of pigs whose carcasses were dumped outside until a local protest forced a clean-up. The inheritor of a pig dynasty, Mr Luter pioneered the vertically integrated production system, or "piglets to pork chops" as he describes it. The company bought up thousands of farms and meat-packing facilities and signed farmers to exclusive contracts. His farms produce 12 million nearly identical genetically engineered "superlean" hogs annually.

 

Poland's modernisation will follow the same script as North Carolina, the country's second largest hog producer, according to the Waterkeeper Alliance, an international grassroots ecological organisation. Two decades ago there were an estimated 27,000 family farms in the state. Today, 2,200 farms remain, most of them hog factories of the kind pioneered by Mr Luter. Employment prospects are as lean as a Smithfield pig, with only two people needed to tend 10,000 swine.

 

A populist David to Mr Luter's corporate Goliath has emerged in the form of Andrzej Lepper, leader of the Euro-sceptic Samoobrona party. A tour of the mega-farms of the American Midwest was enough to convince Mr Lepper, a former wrestler and the son of a pig farmer, that Smithfields must be stopped. "We are not going to allow Smithfield factories to exist in Poland, even if we have to blockade the entire country," he told North Carolina farmers.

 

Under Polish law it is forbidden for foreign multinationals to buy up former state farms but Smithfield bypassed this using local front companies. Through the wholly-owned subsidiaries Animex and Prima Farms the $5bn (£2.96bn) US giant gained control of over 30 large, former state farms and had already converted many of them into hog factories. The buy-up cost $50m, despite the Polish government spending hundreds of millions of dollars pre-sale. Mr Luter was so delighted that he told investors he had paid just "ten cents on the dollar". Thanks to a $100m loan from the European Bank for Reconstruction and Development (EBRD), one of America's richest companies did not even have to pay that.

 

Robert Cyglicki, from the Polish division of the international monitor Bankwatch, said it was a scandal that the EBRD handed out an EU-subsidised loan with no control over how the money would be spent.

 

"Bank representatives claim that they were assured by the borrower that the money would not used for building new industrial hog farms but they could not dictate how the loan would be used and that's where the money went," Mr Cyglicki told The Independent.

 

"The role of the EBRD is especially important, since it claims to follow an environmental mandate, and its participation may give the appearance that industrial hog businesses are not ecologically harmful."

 

© 2003 Independent Digital (UK) Ltd

 

http://news.independent.co.uk/europe/story.jsp?story=464765

Rampant Fraud Costs EU More Than £600m A Year
By Anthony Browne, Brussels Correspondent
TIMES World News
Monday November 24, 2003

Olaf, the EU's independent anti-fraud unit
FRAUDS against the European Union totalling more than half a billion pounds have been uncovered in the past year, according to official figures obtained by The Times, which show that fraud is far more widespread than had been thought.

The number of suspected cases has risen by nearly a fifth in just one year to 3,440, with fraud being discovered in almost all the institutions of the EU and all its funding programmes. In the last financial year alone, 252 cases of fraud were proven, leading to 230 cases being sent to court.


Filing false expenses, claiming for work that has not been done, evading customs duties, misappropriating funds and padded contracts to outside suppliers have all been uncovered. One case involved claiming support for Croatia's sugar cane industry, despite the fact that sugar cane grows only in tropical climates. The figures, to be published in the next fortnight by Olaf, the EU's independent anti-fraud unit, in its annual report, are immensely embarrassing for the European Commission, which took office four years ago with the aim of stamping out fraud and corruption. Neil Kinnock, the vice-president of the Commission, has been responsible for introducing a barrage of controls to clean up the EU.

The Commission has already come under fire for the high-profile scandal at Eurostat, its statistical agency, where £3 million has disappeared. Last week the European Court of Auditors refused to sign off the EU's annual accounts for the ninth year in a row because it could not certify that the
money had been spent properly. Olaf - which was set up in 2000 as part of the reforms - has added up for the first time the total proven fraud against the EU, putting it at £600 million in the year ending June 2003. This is 200 times the sum involved at Eurostat and represents 1 per cent of the total EU budget of £60 billion a
year. However, this is the only fraud that has been proven and the real total could be considerably higher.

Christopher Heaton-Harris, a Conservative MEP on the European Parliament's Budget Control Committee, said: "It's shocking and disgraceful and (is) going to have seismic consequences. It shows that the Commission's claim that Eurostat is a one-off bad apple is ridiculous. It shows the controls they have put in place are not working." The European Commission insists that the figures are the result of its clampdown, bringing previously hidden cases of fraud into the open. "Just because the number of cases is rising doesn't mean the amount of fraud is going up. The high number of cases can be interpreted as showing we are taking the fight against fraud seriously, with cases being uncovered and solved",a spokeswoman said.

Olaf says that all possible steps are being taken to recover the £600 million.

Nearly half the sum (£280 million) is fraud in the EU's agriculture programmes, notably the Common Agricultural Policy, with a similar amount fraud in its "structural funds", which provide support for the poorer regions of Europe.

About £14 million of fraud was discovered in the EU's aid programmes to the developing world, with a similar sum from evading customs duties. Just over £10 million of corruption was found inside the EU institutions themselves.


Olaf found sufficient evidence of fraud in the past year to launch 30 full investigations into the institutions of the EU, of which 23 were in the European Commission itself, including one investigation into the European Court of Auditors. Nearly half the cases are into contracts and grants given to outside bodies.


Within the EU, Italy was subject to most investigations, followed by Belgium. There were 51 new fraud investigations into activities in the UK, with one ongoing case being into inflated subsidies claimed by sheep farmers during the foot-and-mouth crisis. The least corrupt countries of the Union are the Nordic ones - Finland,
Sweden and Denmark.


The biggest single area of fraud is in the European Union's structural funds, which are notoriously poorly accounted for, with the most common methods of fraud involving false invoices and false expenses. About half the fraud cases in the structural funds are in Italy, helping to cement its reputation as the most corrupt nation in the European Union. In one case, the EU had paid E:1.44 million (£1 million) for 26 online training courses in Italy, but an investigation showed that invoices had been inflated and falsified and that E:697,217, or almost half the cost of the scheme, had been stolen. Ten people were prosecuted as a result.

One of the most rapidly growing areas of fraud is in external aid, both to the candidate countries joining the EU and to the developing world, most notably in the EU's aid programmes to Africa. In one project to develop the electricity industry in Kosovo, Olaf managed to retrieve E:2.7 million that had been siphoned off into personal bank accounts in Gibraltar. A former UN official was found guilty in June, and sentenced to 3 1/2 years in prison.

There is also significant fraud to avoid paying customs duties that have to be paid to import certain products into the EU. The main fraud is to avoid paying "anti-dumping duties" that can be more than 80 per cent of the value of the import, by claiming that it comes from another country.In one case, importers bringing chemicals from China avoided paying more than E:5 million in anti-dumping duties by claiming that they were from another country.

To date, Olaf has recovered E:2.5 million.

FROM ANTHONY COUGHLAN