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Food & Water Watch

Take the Katrina Money and Run

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In addition to devastating the Gulf Coast’s residential neighborhoods, Hurricane Katrina also pummeled its grain transportation system. This region is vital to the trade of grains, as Midwestern and southern farmers rely on the Mississippi River and Gulf Coast ports to ship soybean, corn, and wheat. (Think of all the Wheaties breakfasts at risk.) Last September, the USDA proposed a plan to help farmers in the Gulf Coast. This plan called for helping farmers by giving $22.7 million to slow down the flow of grain until the Mississippi River could absorb it again. Sounds like a noble use of taxpayer money, no? And yet, like so many other government initiatives, this program largely fattened the wallets of large  agribusiness companies.

To be more precise, 87% of the funds - an estimated $19.7 million- went to three of the world's largest grain merchandisers: Cargill, ADM, and Louis Dreyfus. According to Alan Guebert in the PJ Star, the agribusiness giant Archer Daniels Midland received $1.03 million to divert shipments to other ports, and another $4.5 million to store grain. Cargill, the multinational that earned $2 billion in 2005, received $7.2 million from the government to move its grain barges upriver, and so on. So where does the small farmer fit into this equation? Nowhere, as they were left high and dry in search of funds to rebuild their destroyed businesses. In the words of Richard Sauder, the general manager of the Tremont Cooperative Grain, “you can get a lot of money out of Washington by just saying [that] this will help the farmers.” While the intentions of this program sounded good, enormously profitable agribusiness giants got the vast share of the loot, leaving small farmers down on their luck in the hurricane-ravaged Gulf Coast.

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