Let Them Eat Sodium Stearoyl-2-Lactylate

Food never used to be food for thought. You ate it, you didn't think about it. Now a lot of people would rather think about it than eat it. Until the consumer ladies on the local TV news began telling us that the food processors were putting cancer into the canned sauerkraut, nobody outside the Department of Agriculture had thought about farmers since Jôhn Steinbeck. Now they tell us American food power can cancel out Arab oil power. The tiniest wheat germ is mightier than the littlest atom.

Food consciousness has come to everyone, but not food understanding. Food consciousness, or, more likely than not, food fury, blossomed in dozens of ways. It might have been exasperation at finding the 80-cent head of lettuce, or that two of the six prepackaged apples that you couldn't examine in the supermarket were rotten, or the day your doctor told you that your reward for trying to eat a balanced diet--whatever that may be--was a case of howling pernicious anemia.

In the past five years, the fastest growing organization in the country has been a club called Taste Buds of America. Its (continued on page 162)Sodium Stearoyl-2-Lactylate(continued from page 98) members are dedicated to finding out what it is like to taste a real tomato. Thus far, all they've come up with is agroscience horror stories such as the infamous MH-1 tomato, the fruit developed at the University of Florida that is said to have the taste and consistency of a shot-put. The advantage of MH-1 is that it can be picked by the indelicate fingers of a mechanical harvester, jounced, bounced, bumped and thumped for thousands of miles along the deteriorated roadbeds of a modern railroad and stored for indefinite periods in what is called a mature-green condition. Comes time to sell it to you so that you can slice it up for your salad with your new Amana laser-beam knife (specially designed for the new food), the man at the warehouse ripens it red by bathing it in ethylic gas. Readers of Coated Tongue, the Taste Buds newsletter, already know that the food chemists are perfecting a tomato taste essence that can be injected into these green rocks as they're being gassed.

The food fury is on us all. We may eat our Big Macs at the Golden Arches, but we worry about it. Even bachelors, penitentiary residents and others dependent on charity and institutional cooking are sensitive to the creation of the Pringle, that biochemical potato derivative of uniform shape that is sold in tennis-ball cans and has become the nationally advertised metaphor for near food. Wouldn't you think that food would be the one product in the world there'd be no need to advertise?

The TV consumer ladies and the taut Naderesque experts who call press conferences to announce that the dye in mascara and the color additives in pretzels have caused brain tumors in six out of 19 rhesus monkeys leave us with the impression that it's all caused by greed. They seem to be saying it was greed that pushed Procter & Gamble to spend more than ten years and some 570,000,000 to come forth with the Pringle from a secret laboratory near Cincinnati. But actually, neither P & G nor anybody connected with this strained, overextended and unbalanced industry is any more or less greedy and immoral than anybody in any other business.

It's Pringles or perish, "Adapt or die," as Earl Butz used to say. Nobody wants to kill you when additives are put into the marmalade, it's just that you can't make big money any other way. Least of all in the food business. There just ain't no way you can make money selling a plain potato. Ask the poor farmers of Aroostook County, Maine, where they fail to make a living trying. It's this simple: Potatoes that cost ten cents a pound raw, in the bag, cost 31 cents a pound cooked, in the can, 51 cents a pound in the form of frozen French fries, $1.39 a pound as potato chips and $2.32 a pound as a snack with the revulsive name Chipsters.

Pringles or perish, process or perish. The more you can trick up the food, the more you can get people to spend. In his book Eat Your Heart Out, Jim Hightower remarks, "One of the primary thrusts in the advertising of Hamburger Helper is that its ingredients will help hamburger go further, allowing you to use less meat. That's a fine idea, except that Hamburger Helper sells for $1.50 a pound. You can buy lean hamburger [or you could when Hightower wrote this] for one dollar a pound or you can buy the ingredients for Hamburger Helper for about 40 cents a pound."

The more the food chain can be elongated--the longer the distance between the cow's teat and your mouth--the more money there is to be made, which may explain why the package the TV dinner comes in costs more than the food it contains or how the hamburger at McDonald's figures out to three bucks a pound or better. Under pressure from Wall Street analysts, bankers and stockholders to make every year better than the last, these corporations have no choice with a system, the public-health questions aside, that is costly, inefficient and every day in danger of breaking down.

Back to Pringles to explain why. People have been so bothered by what many consider an ersatz, additive-loaded, plasticized, facsimile chip, they've failed to see how it shows the way a huge six-billion-dollar corporation can break into a little industry and threaten to drive 100 concerns out of business with a more expensive, inferior product. Admittedly, there's a strong element of subjectivity in the use of the word inferior here, but this is still a case study of how the rules of a free-market economy are abrogated.

First, the Federal Government has to permit the big-business Borgias to ship tricked-up, chemical-fed food across state lines. That happened back around the turn of the century with the passage of what is mislabelingly called the Pure Food and Drug Act. We've been taught that without chemical preservatives we wouldn't have food; but we would. What we wouldn't have is funny food--Sugar Squiggles. Almond Yappos and Figgy Ziggies--because national distribution would be impossible, thus robbing outfits like P & G of the incentive to spend research and development money to invent things like Pringles.

Instead, we would have thousands of local bakers, butchers and brewers supplying us with fresh and tasty food. It might be jarring to find out real bacon isn't red and that all food doesn't have to taste as though it were cooked 60 days earlier in a cave under Kansas City, Missouri, by contractual agreement with Industrial Canteen of America, and drinking would be a lot more fun, too. Thirty-five years ago, 1100 brands of beer were brewed in the United States. Today, there are 246, with a commensurate shrinking of tastes.

Small companies can't stand up to the advertising and marketing power of the biggies. The entire potato-chip industry, every company together, grossed only about 20 percent of what P & G did by itself in 1975. Using its other products for tie-in promotions and leverage to get more and better supermarket display space, P & G ought to crush its little competitors like so many potato chips. It already has about ten percent of the national potato-chip gross, but, as with tooth paste, soap and other things P & G makes, when you merchandise this way, you create an unstable, volatile market in which your product can be kept afloat only by massive, expensive and constant promotion.

With a few exceptions such as Campbell Soup and H. J. Heinz, which have become national institutions, brand names in this business are inherently unstable. They must be perpetually sustained by advertising of extraordinary violence and persistence to achieve some degree of certainty. Large corporations abhor instability. Too much capital is involved for the corporate managers and their bankers to entertain any bullshit about the zestful experience of risk taking in the free market. Yet the industrialization of food has added consumer uncertainty to the inescapable ups and downs of any business based on the luck of the harvest. Before Pringlization or the creation of brands and processed foods, the local businessmen who dominated the market could with ease predict the demand for potatoes, something that is impossible with spuds being sold in 100 different processed forms.

Having gone to enormous expense to destabilize the distribution and marketing of food, the agrogiants then had to restabilize both at yet higher levels of cost, economic, social and nutritional. New tactics have to be used to overcome the permanent running deficits resulting from wrecking an orderly supply-and-demand market by introducing so many extraneous costs.

One approach to that problem is the General Motors method, many seemingly independent divisions backed, by a centralized headquarters that can supply the staff and money power for a knockout blow wherever it's needed. Beatrice Foods, a low-profile corporate behemoth that did 4.6 billion dollars' worth of business last year, exemplifies this tactic. Although Beatrice sells 8000 products, mostly in supermarkets, few people are aware of the company's name. They like it that way. What they want you to fix on is La Choy brand Chinese food, Clark bars, Sexton canned foods, Louis Sherry ice cream, Eckrich meats, Meadow Gold dairy products, Dannon yoghurt, and on and on.

The other way to go is monopoly. In ready-to-eat cereals, one of the first segments of the food business to be industrialized, four companies, Kellogg, General Mills, General Foods and Quaker Oats, have over 90 percent of the market.

If the food processors live dangerously by a system of incurring costs that add no functional value to their products, the life of a supermarket chain is even more precarious. They're intrinsically so inefficient that any laxity in management and profits evaporate, which is what has happened to A & P, the pitiful, weak giant that has been dethroned as America's number-one food retailer.

The corporatists and the anticorporatists have spent the past five years fighting over whether or not the chains are profitable. It depends on how you read their books. If you figure return on investment, a number of them make good money. If you figure return on sales, they're making only two or three pennies on the dollar, which may explain why some of them are always being accused of short-weighting and other non-nice practices.

Lost sight of in the controversy is the larger question of whether or not the big chains are obsolete. It's an American article of faith that large firms are more efficient than small ones. Everybody from John Kenneth Galbraith to the guy next to you in the saloon knows that, but the Federal Trade Commission estimates that the optimum size for a supermarket chain is five stores. The numbers also indicate that in a fair fight, the chains can't compete with the independents.

In 1975, the chains closed 2000 stores, while the indies opened almost 1000 new ones. Here's another number: Although there were about 6000 fewer indy than chain stores in 1975, their sales increased by four billion dollars.

If the chains can't win in a fair fight, other means have to be resorted to. National monopolies are out. Even the chains don't begin to have the kind of money needed to pull that off. But local monopolies, or oligopolies, to use the technically correct word, are feasible. Economists say that prices rise to non-competitive, rigged levels when four or fewer companies can control half the sales in a given market area. That situation exists in over 50 percent of America's major retail areas. In the Washington, D.C., area, right where the Justice Department's antitrust division can't possibly miss seeing it, 70 percent of the groceries are sold by four chains.

In case the Justice Department lacks the curiosity or the investigators to find out how the game of keeping the competition out is played, they should send for a transcript of the Senate committee hearing on the subject. Charles E. Mueller, for 15 years a lawyer for the Federal Trade Commission, explained the whole thing in simple layman's language:

"It all started back in 1967.... A relatively small food chain up in New Jersey called Foodarama, one with some 25 king-sized supermarkets that specialized in discounting, got the idea that it would like to invade the Washington area.... Marketing experts were sent down to do a bit of what is called comparison shopping and they reported back to the Foodarama management in New Jersey that the price level in Washington supermarkets was some three to five percent higher than in their own New Jersey market area.

"Even in a relatively modest-sized market like the Washington metropolitan area, with its yearly food sales of about one billion dollars, a one percent price difference means a gain or loss to the industry of about $10,000,000. To the New Jersey firm, the opportunity to sell in a high-priced market like this one meant that. at its regular New Jersey prices, it would be offering such bargains to the Washington consumer that any new stores it might open there would quickly reach the volume needed to become highly profitable. The plan, then, was to transplant its low New Jersey prices ... [but] by the time they got three stores in operation, the boom had been lowered on them. Giant and Safeway, having no desire to see the Washington price structure competed down to the New Jersey discount level, zeroed in on the three Foodarama stores with price cuts so severe that those three stores had lost several hundred thousand dollars in a couple of months. Eventually, this invader gave up and pulled back to New Jersey, licking its financial wounds and reflecting on the folly of trying to fight tanks with bows and arrows."

The top-heavy, cost-heavy structure of the supermarket chains looks even shakier than what the food-processing middlemen have done to themselves and to us. It looks like their era's over unless the universal price-code system that computerizes their inventory and speeds up the productivity of the check-out counter can bring in some dramatic cuts in their labor costs, but that's doubtful, for the ironic fact is that the only grocery-chain operations that have been doing bullishly well are the ones moving in the opposite direction toward small, convenience stores such as 7-Eleven. But if a chain can be made out of a string of mom-and-pop food shops, why did they tell us for years that little places like that couldn't compete with the ten-trillion-square-foot supermarket because they weren't efficient?

The Government may yet rush in and find a way to save the grocery chains from the logic of free-market competition. That's the only thing keeping the agro-corps in the industrial farm business. It's the Government, not big-business efficiency, that's taken the eee-i-eee-i-o out of Old McDonald and his family farm, as these words from J. Patrick Madden of the Department of Agriculture Economic Research Service attest: "We are so conditioned to equate bigness with efficiency that nearly everyone assumes that large-scale undertakings are inherently more efficient than smaller ones.... But when we examine the realities, we find that most of the economies associated with size in farming are achieved by the one-man fully mechanized farm." In fact, as the returns come in from around the world, from places like Russia, where trillions of rubles have been spent making factories of the fields, it's beginning to look like small-scale agriculture can be made to outperform large every time.

Federal interventions are too multifarious even to enumerate--milk subsidies. Department of Agriculture marketing orders to restrict product competition, free, illegal irrigation and a crocheted security blanket of tax loopholes that makes losing money in farming profitable. The Department of Agriculture estimates that between 10 and 20 billion dollars vanishes through special provisions of tax laws relating to agriculture.

A few states such as North Dakota have fought back by not letting corporate farming within their borders, but the agro-biggies are home free in states such as California and Texas. The tax regulations encourage them to speculate in land at little cost to themselves while driving up the price for owner-operated farmers. While oil companies, movie stars and dentists have learned the IRS lets you make money while losing it in farming, these arrangements put a premium on wasteful, profligate methods of agriculture.

Forgetting how it may be depleting the soil, a system that expends 200.000 barrels of oil a day just for nitrogen fertilizer is heading for trouble. The tractors by themselves burn up as much energy as there is in the food that is grown. It's costing 6.4 units of primal energy (coal, oil, natural gas, whatever) to produce one energy unit of food by one calculation. For processed foods, that ratio can jump to 15 to 1. Again, the whole shebang is out of kilter, running a deficit that the tax regulations allow agribusiness to hide from itself and pass on to others.

Nevertheless, the bulk of our food is still grown by 1,800,000 farmers left in the fields. Their diversity makes it impossible to talk about them in a clump. A wheat farmer gets only seven cents out of a 36-cent loaf of bread: a dairy farmer gets 41 cents out of a half gallon of milk selling for 78 cents, but it's the dairy farmers who are having the worst problems just now. In general, they have all the problems their grandfathers had.

Their grandfathers depended on horses and windmills, and not on a commodity like oil that can triple in price in four years when what the farmer has to sell can't. Eighty years ago, William Jennings Bryan fought for low interest rates and access to credit; it's still a problem, and the lack of it was one of the main reasons the big feed companies could force the nation's poultry farmers into ruinous contracts that turn a man into an indentured factory hand on his own land.

Marketing the harvest is still murder. Where retail customers at the supermarket have to face oligopoly, few stores for many customers, the farmers have to face oligopsony, few buyers for many sellers. The processors can administer prices just as effectively that way, also.

The farmers' answer has been to join together in cooperatives, but the co-op movement seems to be getting into serious trouble. Helped along by significant exemptions from the antitrust laws and other Government favors, some of them have become fabulously successful. Land O'Lakes is so big, it's listed in the Fortune 500. Ocean Spray markets 85 percent of the country's cranberries: Sunkist has the same percentage of the lemon market, but more and more reports are coming in alleging that farmers are being pushed out of control of their own co-ops. Agricultural researcher Linda Kravitz says, for example, that Coca-Cola's food division (makers of such things as Minute Maid) organized a co-op and persuaded the orange-growing suppliers to join it. Names like Goodyear Tire and Kaiser Aluminum have been found on lists of agricultural-co-op members. Yet more tax advantages to be scooped up there.

All kinds of charges are floating around that the big co-ops, over which farmers have lost any democratic control, are doing some very dubious things to make both individuals and the smaller co-ops sign up. Associated Milk Producers, Inc., better known in the Watergate illegal-contribution headlines as AMPI, seems to have run so wild that Big John Connally, who can hardly be called a panty-waist, is quoted as saying some of the things the organization is doing smack "a little [of] strong-arm tactics."

Some farmers' organizations have tried to end-run co-ops, processors and chains and sell directly to the eaters. But the infrastructure for this kind of distribution hasn't really existed for a couple of generations. Some cities are setting up farmers' markets and since 1970, there's been a rejuvenated interest in consumer co-ops that would buy directly from the farm. Hundreds of them have been started, mostly by young college-educated people, but their growth is stymied after a certain point by worse difficulty in borrowing than the farmers have.

But besides feeding us, farmers are supposed to make money for us. Agricultural exports paid for over one half of our oil-import bill last year. The economic foundations of our foreign policy would dissolve without our grain and corn sales abroad.

It may, anyway, with the beating these farmers took the past few years as Nixon-Ford-Kissinger machinated our agriculture from blunder to disaster back to blunder. First subsidies and acreage controls were removed to force maximum production, and then, when they got it, they messed up the Russian wheat deal so that it was the grain dealers, not the grain growers, who got the profits. The result of the Russian deals was such screaming back home about the high cost of bread and pizza that a partial export embargo was grafted on, causing the prices to drop and whipping the farmers twice in a row.

No other American industry has come close to the productivity increases that our farmers have been bringing in for the past 30 or 40 years, but no other group of producers has had to put up with quite so much crap. Here is the farmer, getting it on like the brooms carrying the pails of water in Fantasia, overcoming monopoly, oligopoly, oligopsony and regulation by sheer production, and then he has to face the food-power preachers who think we can rule the world by the judicious giving and withholding of what he grows. Beat the Commies with wheat. It is an ancient piece of megalomania that dates back to Herbert Hoover, our World War One "food czar." who said that he saved Austria from the Reds by telling "the authorities to post the city walls with a proclamation signed by me that 'Any disturbance of public order will render food shipments impossible and bring Vienna face to face with absolute famine.' Things passed off quietly. Again, a Communist crisis arose when Hungary went Bolshevist. But fear of starvation held the Austrian people from revolution."

American farmers have worked long and hard to build up their foreign markets. Their erratic disruption by politicians on power trips hasn't saved the world from communism, but it has given our farmers' customers incentive to find reliable and sane people to buy food from. We're not the only people in the world who know how to grow it. The French, the Australians and the Canadians are happy to sell foodstuffs. We're not even the only people in the world who know how to bring in high yields. Taiwanese and Egyptian farmers get a higher average yield per acre than we do. The Japanese average 50 percent higher per acre. Much of the Arab world will probably soon be able to feed itself, thanks to the Saudi Arabian investment in developing agriculture in the Sudan, a nation that is already exporting food. So much for starving them if they won't sell us oil.

American consumers still pay only a small portion of their incomes for food compared with people abroad, but the suspicion grows that it's more chemistry than nutrition. The farmers are whip-lashed and hornswoggled. The food prices have become so volatile even Wall Street is wondering if there isn't a better way. Our stockpiled food reserves are so low that one bad harvest wouldn't produce hunger, but it would produce misery and a catastrophic run-up of prices. So the system teeters on providing poison for the tummy and dark thoughts for the brain. On the bright side, though, is the fact that food, unlike détente, represents a set of problems we can fix when we have a mind to.