Riceland co-op tensions rise over rice-contamination suit
Posted on Wednesday, September 10, 2008
Disillusionment among members of Arkansas’ largest farmer-owned cooperative has begun bubbling to the surface in the wake of an ongoing lawsuit involving the 2006 contamination of U. S. long-grain rice supplies by unapproved, genetically engineered rice.
Some members of Stuttgartbased Riceland Foods Inc. believe the co-op’s managers are keeping secrets from them, said John Alter of DeWitt, whose family has been a Riceland member for three generations.
Concerns were heightened last week when Riceland asked a Lonoke County Circuit Court judge to sanction two attorneys for releasing certain documents to the media during the pretrial discovery phase of the lawsuit, he said.
“Farmers are outraged about the secrecy,” said Alter, who is not a party to the case.
The lawyers in question — Paul Byrd of Hare, Wynn, Newell & Newton in Little Rock and Jerry Kelly of the Kelly Law Firm in Lonoke — represent a group of rice farmers who sued Riceland in late August 2006, after the U. S. Department of Agriculture announced that trace amounts of an unapproved, genetically engineered rice had been discovered in U. S. long-grain rice supplies.
The lawsuit alleges negligence and fraudulent concealment on Riceland’s part and seeks compensation for damages caused as a result of the contamination.
Riceland, which has produced more than 20, 000 documents in the case, has designated some of those documents as “confidential,” in accordance with a protective order previously issued in the case. Such protective orders are common in complex business lawsuits that involve trade secrets and proprietary information.
During an Aug. 20 hearing in Lonoke, Byrd and Kelly objected to the confidential designation assigned to about 45 documents by Riceland’s attorney, Barry Deacon of Barrett & Deacon in Jonesboro.
Judge Phillip Whiteaker issued oral rulings from the bench regarding some of the documents and promised to rule later on others.
Some of the documents Whiteaker said should be declassified revealed that Riceland was actively involved in 2000 with the development of a genetically engineered mediumgrain rice. Other documents showed that Riceland was aware of a 2006 contamination problem as early as Feb. 1 of that year.
“What’s so horrible about any of this ?” Alter asked rhetorically. “What have they [Riceland ] done ?... What are they doing right now that we don’t know about that’s going to pop up in five years ?”
In a Sept. 3 motion, Riceland asked Whiteaker to find Byrd and Kelly in contempt of court for releasing to the media some of the documents discussed during the hearing before the court had issued a final order regarding their confidential status. Deacon argues in the motion that Byrd and Kelly violated both the March 2008 protective order in the case and Arkansas’ rules of professional conduct for lawyers.
“Because of Plaintiffs’ counsel’s inappropriate press campaign against Riceland, a protective order specifically addressing statements to the press is warranted,” the motion reads. “The ongoing and aggressive media campaign by Plaintiffs ’ counsel has now substantially impacted the ability of Riceland to obtain a fair trial in Lonoke County.”
John Dozier, a Marianna farmer and Riceland member who is not party to the lawsuit, said he would like the co-op to be more forthcoming with its members.
“There’s a lot of farmers that are real confused about this [genetically modified contamination incident ] and how much Riceland was involved in it,” Dozier said.
Riceland spokesman Bill Reed declined to comment about the matter.
Riceland, which was created in 1921, is the world’s largest rice miller and marketer, according to the co-op’s Web site. Riceland — which has about 9, 000 farmer-members in Arkansas, Louisiana, Mississippi, Missouri and Texas — markets rice, soybeans and wheat; mills rice and processes soybeans.
As cooperatives mature, “there’s a tendency for growers to get less and less involved,” said Shermain Hardesty, an agricultural economist and director of the small-farm program at the University of California at Davis. “So, when something starts going wrong, they start pointing fingers at the management.”
Farmer members need to accept responsibility for managing their cooperative, Hardesty said.
Brent Hueth, an agricultural economist and director of the University of Wisconsin Center for Cooperatives, agrees.
Members, especially board members, need to actively participate in co-op governance, he said.
“Boards have to work hard to maintain good relationships with their members and, at the same time, play their advisory and monitoring role [regarding ] management,” Hueth said. “It’s a hard job.”
Jimmy Wallace of England, one of the farmer-plaintiffs in the Lonoke case and a former Riceland member, said he is guilty of taking a hands-off attitude for too long.
“I’m like the typical farmer, I let somebody else take care of my business. But I’m not doing that anymore,” he said.
Wallace said everyone needs to “come clean” and lay the facts out on the table regarding the 2006 contamination.
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