Entrepreneurship Gets Slaughtered
Creekstone Farms is a little slaughterhouse in Kansas with an idea that would have had Adam Smith's mouth watering. Faced with consumers who remain skittish over mad cow disease -- especially in Japan -- Creekstone decided that all its beef would be tested for mad cow, a radical departure from the random testing done by other companies. It was a case study in free-market meatpacking entrepreneurship. That is, until the Bush administration's Department of Agriculture blocked the enterprise, apparently at the behest of Creekstone's competitors.
According to the Washington Post, Creekstone invested $500,000 to build the first mad cow testing lab in a U.S. slaughterhouse and hired chemists and biologists to staff the operation. The only thing it needed was testing kits. That's where the company ran into trouble. By law, the Department of Agriculture controls the sale of the kits, and it refused to sell Creekstone enough to test all of its cows. The USDA said that allowing even a small meatpacking company like Creekstone to test every cow it slaughtered would undermine the agency's official position that random testing was scientifically adequate to assure safety.
What it didn't say was that the rest of the meatpacking industry was adamantly opposed to such testing, which is expensive, and had no desire to compete with Creekstone's fully certified beef. "If testing is allowed at Creekstone
The Agriculture Department's Creekstone decision reveals the best thinking of Soviet central planning: The government shoots the innovator to preserve market stability. Though President Bush invokes free-market principles when it comes to industry downsizing, "outsourcing" jobs, media mergers and energy deregulation, those principles apparently have their limits when a company seeks to become an industry leader in consumer protection.
Located in the small town of Arkansas City, Creekstone is a model operation in an industry that often seems medieval. It traces the origins of its high-quality Black Angus beef to reduce the use of animals that have been given antibiotics. It pays high wages, employs humane slaughtering techniques (they make for better-tasting beef) and maintains a slow enough production line to guarantee worker safety and to ensure that animals are dead before they are butchered. Although the largest U.S. meatpacking companies have fought regulations that would force such practices, Creekstone -- which has been in business since 1995 -- has proved that some consumers will pay more for such corporate policies and the premium product that results.
