The Justice Department's antitrust division has issued 39 subpoenas in a wide-ranging investigation of the rice industry in Louisiana, California, Texas, Arkansas and New Jersey, according to reports published yesterday in newspapers in New Orleans and Little Rock, Ark.
The New Orleans Times-Picayune and The States-Item quoted unidentified sources as saying the investigation apparently forcuses on the rice industry's participation in two federal programs. One is the Food for Peace program, which helps foreign countries buy U.S. rice. The other program buys rice for public school cafeterias in the United States.
Richard Bell, executive vice president of Riceland Foods in Stuttgart, Ark., said he understands that all rice millers in the United States, including Riceland, are being asked to submit records to a grand jury, the Arkansas Democrat reported. Riceland Foods is the largest rice cooperative in the nation.
Bell said he couldn't comment on any specifics of the investigation.
Steve Gaggert, executive-vice president of the Maryland-based Rice Millers Association, told the Democrat that the industry was "very surprised" by the investigation.
The subpoenanas have been issued to 32 major rice mills and seven major exporting firms in Louisiana, California, Texas, Arkansas and New Jersey the Times-Picayune said.
One rice company executive, who asked not to be identified, told the newspaper the federal investigators "want every single piece of paper that has the word 'rice' on it."
The newspaper reported the subpoenas seek information on pricing dating back to 1972. Sources said the investigation involves alleged collusive practices in the sale of rice overseas.