Dirty Grain

Corn should stand knee-high in most Midwest fields by July 4. Instead of rejoicing, though, farmers are nervously wondering whether they will be able to find markets for all the corn and grain from the huge harvests expected this year. Normally, 25% of all U.S. grain is exported to foreign buyers, who pay about $10 billion a year. Now that giant market is being threatened by a scandal involving: 1) bribery and fraud in federally licensed grain-inspection procedures, 2) suspected skimming of grain off export cargoes by the operators of grain elevators, and 3) laxity by the Department of Agriculture in fulfilling its obligation to ensure the quality of U.S. grain shipments.

The scandal is making foreign buyers wary of U.S. grain and with good reason: they have been getting many shipments that are short-weighted, composed partly of inferior-quality and broken grain, or contaminated by dirt or moisture. Last week a delegation of European grain company officials were in Washington to press similar complaints. American farmers and dealers alike are angry and anxious for an end to the problems. "We produce a good, clean product," one Iowa soybean grower told that state's Democratic Senator Richard Clark. "I'll be damned if we're going to let petty bribery, sloppy work and greedy exporters throw it down the drain."

Farmers can do little, however, because most of the abuses occur far from the country elevators where they sell their crops. Grain is not officially inspected until it reaches New Orleans, Houston or other ports. There inspectors' employed by private agencies but licensed by the U.S. Department of Agriculture grade the grain and also certify that ships are clean enough to carry it in their holds. Altogether, USDA has licensed about 3,000 inspectors, who earn an average salary of $10,000 a year; their relatively modest incomes are often supplemented by overtime wages and seasonal bonuses. Since loading delays can cost shipowners up to $20,000 a day, it is often more economical to bribe inspectors to approve their ships than take the time to clean the vessels. Similarly, grain companies lacking required amounts of a particular grade may be tempted to substitute lower-quality grain and offer bribes to inspectors to grade it falsely.

The Departments of Agriculture and Justice are investigating violations of this sort in most major U.S. ports. During the past year, grand juries in Texas and Louisiana have handed down 18 indictments, most of them against inspectors; five have pleaded guilty to accepting bribes in exchange for certifying unfit ships or deliberately misgrading grain.

No one expects the scandal to stop there. Operators of grain elevators are suspected of holding back some grain destined for export, selling it to domestic buyers, and covering the shortages by dumping lower grades, broken kernels or rye into the grain shipments bound for foreigners.

Rodent Enriched. The Department of Agriculture has much to answer for. According to a report written by the department's Office of Audit in 1973 and made public last week, the department's Grain Division once held back a plan to determine uniformity in export shiploads because of the objections of a single trade organization, whose members included large exporting companies. In addition, the report said grain inspectors often failed to notify the Food and Drug Administration of "deleterious substances" in grain destined for human consumption. Among them: poisonous mercury-treated kernels, rodent excreta and insect-damaged kernels. The report further charged that elevator operators were allowed to blend as much as 10% off-grade grain into a cargo bound for a foreign country.

Last week a Senate subcommittee heard a plea by Agriculture Under Secretary J. Phil Campbell that Congress put off action until his department worked out a reform plan for the grain trade. But several lawmakers have already proposed remedies. Iowa's Clark, among others, has called for creation of a semi-independent grain-inspection agency that would have strong enforcement powers and be less exposed to "possible economic or political pressures or administrative indifference."

This file is automatically generated by a robot program, so viewer discretion is required.