In recent years, though, many markets have stopped being competitive, including food and farming. In this episode of in this episode of ILSR’s Building Local Power podcast, Maxwell sits down to talk about it with Stacy Mitchell, ILSR’s co-director.
Maxwell, the former Lt. Gov. of Missouri, is now executive director of the Organization for Competitive Markets. He’s also the president and CEO of Family Farm Action, a coalition of family farmers and advocates that’s building the “political muscle” to fight for farmers and communities.
Their conversation covers everything from the hollowing out of rural America to what the growing anti-monopoly movement looks like on family farms. With a merger looming between Bayer and Monsanto, this conversation about monopoly and our food systems is as urgent as ever.
“In my farming life I’ve seen over 91% of the hog farmers driven off the farm and out of business,” says Joe Maxwell. “We’ve had several administrations, Republican and Democrat, that have allowed corporations to become too big to allow marketplaces to work.”
Family Farm Action’s website — See the issues that Maxwell’s organization, Family Farm Action, is working on, including its support for a slate of anti-monopoly and pro-family farming candidates running in races across the U.S.
Organization for Competitive Markets‘ website — Maxwell also leads the Organization for Competitive Markets, which is doing critical work to reclaim economic justice for America’s family farmers and ranchers. OCM’s resources include the policy brief, “Consolidation, Globalization, and the American Family Farm,” and a stance on how to restore the Packers and Stockyards Act.
ILSR Rules Archive – Packers and Stockyard Act — In their conversation, Maxwell and Mitchell reference this legislation, which was passed with an intent to keep the livestock industry competitive.
“This Ag Economist Preached Bigger is Better. Now He Says the Evidence Favors Small Farms.” — Episode 32 Building Local Power Podcast — This podcast episode features John Ikerd, an economist who once supported large-scale industrial agricultural operations, and now argues for a small-scale, local agricultural infrastructure.
Report: Monopoly Power and the Decline of Small Business — This report from ILSR’s Stacy Mitchell details how the United States is much less a nation of entrepreneurs than it was a generation ago. It suggests that the decline of small businesses is owed, at least in part, to anti-competitive behavior by large, dominant corporations.
Our guest, Joe Maxwell, also provided recommended reading for our audience on consolidation in agriculture and the anti-monopoly movement:
- “The Meat Racket: The Secret Takeover of America’s Food Business,” by Christopher Leonard
- “Cornered: The New Monopoly Capitalism and the Economics of Destruction,” by Barry Lynn
- “Food and Power,” a project by Leah Douglas of the Open Markets Institute
|Stacy Mitchell:||Hello, and welcome to Building Local Power. I’m Stacy Mitchell of the Institute for Local Self-Reliance.
Today on the show, our guest is Joe Maxwell. Joe is a former lieutenant-governor of Missouri. He ran and won that office in 2000, and served for a four-year term. Before that, he was in the Missouri legislature for about a decade. Today, Joe is the executive director of the Organization for Competitive Markets, a national nonprofit public policy and advocacy organization that represents family farmers and rural America in the fight against corporate agribusiness monopolies. He also recently helped to found something called Family Farm Action, which we’ll talk more about. Joe is a fourth-generation family hog farmer in the northeastern part of Missouri, and he joins us today from his home in Mexico, Missouri. Joe, welcome to the show.
|Joe Maxwell:||Thank you. It’s great to be on. We appreciate the opportunity.|
|Stacy Mitchell:||So, I want to start with a campaign that you helped run last year in the neighboring state of Oklahoma. And this was a ballot initiative to enact something called Right to Farm legislation. Right to Farm sounds like a good thing, and it sounds like something that people in an agricultural state, like Oklahoma, would be in favor of. And in fact, I think polling about a year before the vote showed that voters favored it by a 64% to 15% margin. So, I was wondering if you could talk about, what was this Right to Farm measure all about and why did you get involved in trying to defeat it?|
|Joe Maxwell:||Well, Right to Farm clearly, as you stated, Stacy, sounds great, but what the corporate ag interest that control the marketplace and abuse the market want to do is take a great sounding name like Right to Farm and use that to pass a constitutional amendment in the state of Oklahoma that would give corporations the same rights as individuals, at the same level of protection as is the Bill of Rights. So, the same right as freedom of speech, the right to bear arms, freedom of religion. And what it said was is that no legislator or the people could abridge their right to farm the way they wanted to without a compelling state interest.
So, we felt, as Farmers Across the Country, an organization of competitive markets, has many members in Oklahoma, our Board member, former state senator Paul Meggie is there. We really felt that we had to stand up and fight, in spite of the fact that early polling said that there wasn’t any way we could win.
|Stacy Mitchell:||So, how did you go about winning? Because my understanding is that you won, basically in a landslide, and won all of the state’s congressional districts. How did you turn things around?|
|Joe Maxwell:||Well, first, I think, just standing up. I think, too often, in our agricultural communities, our small family farmers and ranchers, have just been beaten about the head and shoulders so much, whether that’s in the marketplace, or out there in their communities. Sometimes when big ag comes in, they just feel like that their voice doesn’t matter. And even the average citizen or average voter in America, often times will say, “Well it just doesn’t matter. It’s not gonna make a difference. These big corporations, they always win. It just doesn’t make a difference.”
Our standing up and saying, “Enough’s enough, we’re not going to let corporations be in the Bill of Rights that protects individual’s rights.” And so we stood up, and before we knew it, others were joining, and felt empowered to take a position against corporate ag. And then, the rest is history, as they say. We beat them 60% to 40%. We won in every congressional district.
|Stacy Mitchell:||So, I wanna return to politics, but first, I wanna ask you about what’s happening in rural America, and particularly to our farmers. OCM put out a report in August, a policy brief, and it has some truly astonishing statistics in it. One that caught my eye. In 1987, the US had about 250 thousand hog farms across the country, and the median size of those farms was about 12 hundred hogs per farm. Today, three quarters of those farms are gone. We’re down to about 63 hog farms. And the median size is now 40 thousand hogs, which is the size of a city. I have trouble even picturing what that’s like. What is driving this trend of so many farmers going out of business, and the farms that are left, being so much larger than they used to be?|
|Joe Maxwell:||Yeah, there’s 63 thousand hog farms left in America. When my brother and I … I have a twin brother. When we started farming, there were 670 thousand hog farmers in America. So to me, in my farming life, I’ve seen over 91% of the hog farmers driven off the farm and out of business. And what’s happened? We had several administrations, republican and democrat, that have allowed corporations to become too big for the marketplace to work. They control that market, they’re able to manipulate that market, and they’re able to drive that farmer from the land.
During some of the worst hog price crisis’s, we saw family farmers getting, in 1998, got eight cents a pound for a hog, and the pork chop at the retail grocery store didn’t drop a penny. “How can that be?” Folks will say. Well when you only have two or three people buying and selling pork in the United States, they can do whatever they want. They collude, they drive the price down for the farmer, and drive the price up for the consumer. And so that’s what’s happened in America.
Over 60% of the market, in the hog market, is controlled by four corporations. The largest one in America is Smithfield. China owns … The country of China, invested to buy and own the largest pork producer, and pig producer, in the United States, Smithfield. JBS, which is Brazilian, using what we believe is illegal loans and manipulation of stock prices, purchased the pork division of Cargill. That’s either the second or third largest pork producer in the United States. So when you look at it, these companies that are abusing and driving farmers from the land, that are screwing the consumer by over-charging them, they’re not even US corporations anymore. They’re foreign corporations getting away with stealing from farmers and consumers.
|Stacy Mitchell:||In this trend towards consolidation, which you note catches farmers in both directions … Not only are they selling into markets that are highly consolidated, where they may have only one or two or three choices for companies that are competing to buy their output, but they’re also having to buy the seeds and other inputs that they need from other monopolies, that are highly consolidated. And we see this trend continuing, despite the fact that it’s such an already consolidated industry. We’ve got a big merger on the table right now, Bayer and Monsanto, which I understand, if that goes through, we could end up with just three companies that control 80% of the US seed supply. That’s astonishing, and I am amazed that regulators are even entertaining such a merger.|
|Joe Maxwell:||Let me start by, Stacy, saying, “You’re exactly right.” And you know that the stack of the deck is just stacked against family farmers, small businesses, and the consumer in America. Because our government, since Ronald Reagan, all the way through Clinton, all the democrats and republicans, have really been in bed with the concept that big is better. They do not enforce the Clayton and Sherman Acts and the Packers and Stockyards Act. They deported judges that have actually watered those marketplace safeguards down. And today, the farmer’s caught in the middle, just as you described. They wanna stow our product, but the fundamentals no longer work because it’s really not anybody on the other side, but one company, offering you a price. Now, with these acquisitions and mergers on the seed and pentacle side, we’re gonna see three companies of the world …
Note that Monsanto, which I’ve not always been a fan of, but at least it was US, is getting ready to be merged and bought out by Bayer, a foreign corporation. And if you look at the purchases, and these acquisitions and these mergers on the input side, again, it’s the story of foreign corporations controlling the price that farmers have to pay. And they gouge that farmer on the input side, and the other side of these foreign multi-national corporations drive down the price, leaving the farmer very little options, other than to become a contract roller for those companies, a surf on their own land, or get out of business. And the consumers are harmed because when there’s too few people actually manufacturing and selling food products in the marketplace, they’re colluding. That is evidence …
There’s two cases going right now in the chicken industry, where the evidence is pretty clear, that the largest processors of poultry have been colluding on price and screwing the consumer out of about $1.10 per chicken. So you can think about the billions of dollars that the consumers had to pay because the market is not working.
But there is hope, and we are excited at OCM. We’re a 19 year old organization, we’ve never seen a better time. We’ve got Senator Grassley as the chair of judiciary, and Senator Lee as the chair of the sub-committee on anti-trust. Both of them, last year during two US senate hearings, said, “Enough’s enough.” Senator Grassley actually called these acquisitions and mergers tsunamis, and at the same time, we just saw Senator Warren and the democrats come out with the Better Deal, which has a platform against monopolies.
So we’re encouraged, when you ask folks like Senator Warren on one side, and Senator Lee on the other, and there’s probably not anyone else that can be that far apart ideology-wise, coming together on an issue. We are encouraged that we can, if the people will speak up just like we did in Oklahoma. And we’re not alone. We just need to join together and let our voice be heard and say, “Enough’s enough.” Whether you’re a consumer or a farmer, it’s time to end this big is better concept, and we need to have justice in Washington D.C.
|Stacy Mitchell:||It seems like part of the reason that we haven’t gotten that justice, as people, in recent years, is that there’s not a lot of competition in the political parties, right? We’ve been talking about competition in the market, but our country … Increasingly, most Americans live in places that are either very blue or very red. And the other party isn’t doing a very viable job of competing for their votes. You’re a democrat in a state that is, Missouri, is typically a red state. And certainly rural areas tend to be quite red these days. But you contend that democrats can compete in rural areas and win, and that they can do that by actually speaking to these issues. Can you talk some about that?|
|Joe Maxwell:||I did launch a sister organization to OCM as C4. A C4 [inaudible 00:12:41] action, you can speak about politics. There’s no doubt that the democrat party, in regards to economic issues, the only real difference over the past several decades, is which Goldman Sachs executive is gonna be the treasury of the department of congress. There’s no real debate about what the economic direction, and future, should be for America, and for its citizens, its companies, its small businesses, its family farmers and ranchers. So there’s not been a real debate out there, in regards to what economic direction we should go.
I think democrats have failed. I think we failed the people. I work on a bi-partisan basis. I just got through bragging on Senator Grassley and Senator Lee. But is it [inaudible 00:13:35] to the democrats and the democratic party, I think they have failed, time and time again, to hold up what their party was founded on.
You may recall, in 1792, we had Thomas Jefferson and Madison join together because they wanted to speak out against concentration. They wanted to speak out against the National Bank, and the concentration of wealth in this country, and inform the democrat party, the years of the little guy policies of the democrats. Did they evolve? [inaudible 00:14:11] democrats to go back to their roots. We are encouraged because we do see republicans moving [inaudible 00:14:20] party, but individual [inaudible 00:14:22] republicans wanting to right this injustice, and if the democratic party would join in, we really believe we can have true economic justice for everyone in this country.
|Stacy Mitchell:||You’re listening to Joe Maxwell, executive director of the Organization for Competitive Markets and former lieutenant governor of the state of Missouri. I’m Stacy Mitchell with the Institute for Local Self-Reliance. We’ll be right back after a short break.
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One of the trends that we have seen as the economy has grown increasingly consolidated, and as politicians have ignored, in many cases, that consolidation and what’s happening across the country, is that there’s this growing geographic divergence. There are a handful of cities, mainly on the coast, that have been doing fairly well, but then when we look across much of the country, the rural areas, the small towns, the heartland cities, they’re falling behind.
There’s growing poverty, very precarious employment, communities and institutions are afraid, and there’s a lot of despair in those places. As you look to growing numbers of elected officials and people running for office, who are beginning to speak to these issues, this issue of having an economy that works for people, where there’s real opportunity, where farmers and small businesses and workers can sell their produce, and sell their labor and get a fair price, because there’s competition. When you see Senator Warren and Senator Lee and other folks who are beginning to talk about this, what are the kinds of policies that OCM believes that we need to adopt in order to correct this problem and bring the whole country up?
|Joe Maxwell:||I think that you characterize it well. We see this as just a fundamental value to how our country works, and a fundamental issue. Our country is great because we work hard and we should receive a benefit for our toil. If we have an idea, we should be able to take that idea to fruition, and commercialize it, and benefit from our intellect, and our talents, and our skills. And as such, we should be able to hire good working men and women within our communities, and give them livable wages, and opportunities for healthcare, and an opportunity to prosper.
What happens when there’s concentration, is there’s this handful of companies have such a strangle-hold on the economy, on the markets, that they can just abuse that opportunity. They can deny small businesses the opportunity. You take in the seed industry, we mentioned the inputs. Look at the numbers, small business men and women that have been driven out of their business, in the seed side of inputs. But the same is true on small manufacturers within our communities. Or look in Pennsylvania at the industrial belt, at how concentration and globalization has driven men and women off the line at the workplace, at the company, and off into the unemployment lines. And now the say, “Well unemployment is the lowest it’s been in so long.” Yeah, that’s because people are hustling two or three jobs just to feed the kids. There’s just no justice in that. And it goes against the very values and ideals of this country, and that was given to us through our economic policy.
OCM believes the first and foremost thing is that we have to enforce the laws that are on the books. Back when we had the big trusts, the Steel Trust, the Whiskey Trust, the Packer Trust, all these trusts, they didn’t have corporations then, they had these trusts. This guy named Teddy Roosevelt, who later became president, that was the original trust buster. He got it. A republican president, a former governor of New York, and he said. “I’m going to bust those trusts, because I’m going to give people opportunity.” And that began a wave from his era, all the way through 1921, where laws were passed that say, “Look, you gotta have safeguards in the marketplace, because ultimately, if you just let the biggest win, they’re going to abuse the people, they’re gonna abuse the working families, they’re gonna abuse the farmers, they’re gonna abuse the small businesses.”
Second, on these acquisitions and mergers, our department of justice, they need, not only to enforce the current laws, but they also need to have additional tools to be able to look back on acquisitions and mergers, to ensure that the results that the company’s committed to the people of this country, that they were going to result in more jobs, more economic growth, if they allowed the merger, that those companies are delivering on those promises. And if not, the department of justice needs the teeth in the law, so they can fine or disrupt that company that they allowed to go forward.
We need to ensure in the Packers and Stockyard Act for farmers … Packers and Stockyard, that’s the anti-trust laws that protect farmers. When it was passed in 1921, it was called the Farmer’s Bill of Rights. We need to ensure that it continues to protect farmers against predatory and retaliatory practices. Right now, if a chicken contract grower speaks out against the company, they lose their contract and they therefore go bankrupt and lose their family farm. No company should have a right to retaliate against someone because of their free speech rights in this country. But yet that goes on, and we need to strengthen those laws and reinstate those laws. Those would be the priorities that OCM says we should go after first. And we call on every elected official to do so, and we call on every citizen. This Family Farm Action, which is our political arm, we call out every citizen to hold that elected official accountable. If they don’t stand up for people, and they don’t stand up for economic justice, then throw their butts out in this next cycle.
|Stacy Mitchell:||That’s interesting that the Packers and Stockyards Act used to be called the Farmer’s Bill of Rights. I’m curious if you know how that changed.|
|Joe Maxwell:||First, note that the Sherman and Clayton Act, which is a general marketplace safeguard laws that were in place to break up that huge concentration of those trusts, they’re over on DOJ’s side and are enforced on that side. Packers and Stockyards Act was actually given over to the department of USDA, the Department of Agriculture. Because it was to represent, as opposed to protect the market, as the other safeguards do, its primary focus was to protect the farmer against the abuses in the marketplace. So it was an individual rights concept, that individual producers should have protection. Farmers just do not have the economic power. They raise something, and instead of setting the price for their pig, their calf, the corn, the soybeans, cotton, whatever it might be, they have to hold it up to the marketplace and say, “How much will you give me for this?” Therefore, the understanding was that they would need protections, because they would be very vulnerable in that type of a market.
It was shortly after that that several supreme court decisions came down that began to weaken that law. Finally, in 2005, the supreme court ruled in favor of the corporations, and took all the rights away from the farmer. Instead, the farmers not only had to show harm to themselves, but they had to show harm to the general marketplace. Well, no farmer can do that. How do they get the resources to hire those economists that have to come in and testify? Where do they get the money to hire the lawyers to take on a big corporation, which has millions and millions of dollars that they can spend on attorneys. So it was over time, about 2005, the courts made that final ruling, and we’ve been pushing to pass the GIPSA Rules. On the nineteenth of October, the USDA will close out their decision on whether or not we will have those original safeguards put back in the law. And we call on Secretary Perdue to do the right thing for Americans, for the consumers, and mostly for US family farmers and ranchers, by finalizing those rules. GIPSA is the Grains Inspectors Packers Stockyard Administration.
|Stacy Mitchell:||It sounds like, in a way, that the Farmer’s Bill of Rights, when it was passed in 1921, was … In keeping with how we, throughout much of our history, approached anti-monopoly, was that we recognized that the goal was to protect people in the marketplace in all of their capacities. Not just as consumers, but as producers and workers and people who sold labor, sold goods, and needed a fair marketplace in order to get a fair price and a fair income. In the 1980s we began to move away from that, and to focus narrowly on the idea of efficiency and consumer welfare, with … Bigger companies are probably better because they’re more efficient, and we threw out a lot of those … Our enforcement of anti-trust dismissed a lot of those concerns about producers. And it sounds like, in some ways, that’s what has happened with the Farmer’s Bill of Rights, the Packers and Stockyards, is that its original intention was at odds with this new ideology, and that over time, its enforcement has been altered to fit the ideology and not the original intent.|
|Joe Maxwell:||Absolutely, and you bring up the efficiency rule, and it sounds great. Right after President Reagan was elected, one individual in his administration, in the department of justice, on their own, unilaterally, without act of congress or executive order, changed the guidelines for how acquisitions and mergers would be governed. And the definition had been, for the definition for anti-trust, was competition. You would look at whether or not there was actually a market. Could people compete. Would they have a fair chance to enter the market space? Would the economy continue to drive? That one person, unilaterally, said, “No, it needs to be about efficiency. If this country can drive more efficiency, then the consumer benefits, because they’ll get a lower price.”
Now, I’m gonna tell you something. That sounds just great. But those big companies, they don’t give a hoot about the consumer. When they drive those efficiencies, have those acquisitions and mergers, layoff people, stop the ingenuity, or the research and development, do they lower the price of those goods to consumers? Absolutely not. What they do is put that money in their pockets, and go home laughing all the way, because of that change. Every president since Ronald Reagan, democrat or republican, has kept that rule, that guideline in place. And it denies the market the opportunity to work for the benefit of the consumers, the businesses, the farmers, the ranchers, and for the people.
|Stacy Mitchell:||So OCM is fighting to restore anti-monopoly policies, and particularly the Farmer’s Bill of Rights, as it was originally intended in 1921. That’s at the federal level. As someone who worked for a long time in state government, what is it that you think local and state officials should be doing on this issue?|
|Joe Maxwell:||Well, most states also have rules and regulations, statutes governing the marketplace. I think all 50 states, the attorney generals in those states can join in with the department of justice, and have a right on behalf of the citizens of their state, to wade in on these acquisitions and mergers. So at the state level, I did the same thing I’m doing now at the federal level. I encouraged those policies to be enforced. I encouraged the attorney general of my home state, and I hope that every one of you encourages your attorney general, to enforce the standards and the safeguards that are in place, that allow the market to work for all people. It’s unfair to the workers. When there’s too few companies controlling everything, they don’t care about the workers. They set the price, they pay the workers. They set the price, they pay the farmers. And they set the high price the consumers have to pay for their goods. And everybody has a reason to join this fight, and demand economic justice for everyone in America.|
|Stacy Mitchell:||So OCM is a non-profit research and public policy organization, and you’ve also been involved, recently, as we’ve touched on, with helping to launch Family Farm Action, which is a C4 national political action organization, that, as I understand it, is aiming to help support candidates who are strong on these issues. Are you seeing more candidates, particularly across rural America, who are talking about these things on the campaign trail? What’s the outlook, do you think, for having this be part of our elections?|
|Joe Maxwell:||I think what’s important to understand is a lot of organizations like OCM … I’m very proud to be its executive director. We do great work on determining, doing our research. Angel Huffman on our team … I’ve put out that policy brief that you referenced. But we have to draw the line, because as a non-profit C3, we cannot engage, politically. We’re limited to how much we can walk the halls of the state capital, or the federal capital. But when we look at big ag, when we look at corporate ag, when we look at these multi-national corporations, they have team after team of special-interest lobbyists lobbying our elected officials.
So Family Farm Action is a C4 organization, and we’re able to lobby the halls of the states, and of the capital. And we’re also able to politically engage out there in campaigns. We felt very strongly, as a team, coming together with Family Farm Action, that we needed to give political muscle, and to join in with folks like the National Farmer’s Union, who’s a partner, who also lobby’s to join in with our National Sustainable Ag Coalition, who has a great team. We felt we needed to add additional political voice.
What’s the outlook? Well, we think that it’s great. Our experience in Oklahoma, when we started this podcast off, what we knew then was that somebody had to stand up. What we know today is the same is true, if we’re gonna get something done about this concentration, and the abuse of the marketplace, and the abuse of the consumers and farmers. So Family Farm Action is out looking for candidates. And they’re out there.
We’re delighted with Austin Frerick, up in the Iowa third district. There was just a national story done on him. We’re delighted with former deputy undersecretary Lillian Salerno, who’s announced [inaudible 00:30:50] for congress down in the Dallas area. We’re delighted with Drew Edmondson, announced and is running for governor in Oklahoma.
There are candidates around this country that are speaking up and demanding economic justice, for all citizens, regardless of where they live, whether that’s rural, or urban, or suburban, regardless of the color of their skin, or the faith that they believe in. We believe America, and those candidates believe, that in America, we stand for the basic principle and the value that everybody should have the right and opportunity to prosper in a great country like America.
|Stacy Mitchell:||Joe, this has been a great conversation. I really appreciate you taking the timeout today. I wanna close by asking you if you have a reading recommendation. Something that you’ve come across recently that you think our listeners might enjoy or benefit from.|
|Joe Maxwell:||I think there’s two books I would recommend. First, I’ll go with Chris Leonard’s The Meat Racket. Been out a couple of years, it does a tremendous job of just talking about this vertical integration and concentration of power, focusing mostly on the poultry industry, but it really speaks to all specters of agriculture and abuses that are there.
I think Barry Lynn, someone I work with, he’s an advisor on OCM, he’s a board member of Family Farm Action. Barry Lynn’s book Cornered. It is a great read for understanding this over-all monopoly, and the power of those monopolies.
I think also, just Google a guy by the name of Matt Stoller. Matt’s a tremendous reporter, a writer, has many articles out there. Leah Douglass is another name, that does a tremendous job of writing, and capturing, and being able to speak to these most complicated issues, in ways of which, almost any of your listeners would quickly grasp and say, “Oh my Gosh, this is going on in America. Why?”
|Stacy Mitchell:||Joe, thanks so much for the time today.|
|Joe Maxwell:||You bet.|
|Stacy Mitchell:||Thank you for tuning in to this episode of Building Local Power. You can find links to what we discussed today by going to our website ilsr.org and clicking on the show page for this episode. That’s I-L-S-R dot org. While you’re there, you can sign up for one of our newsletters and connect with us on Facebook and Twitter. And, once again, please help us by rating this podcast and sharing it with your friends.
This show is produced by Lisa Gonzales, and Nick Stumo-Langer. Our theme music is Funk Interlude by Disfunction_Al. For the Institute for Local Self-Reliance, I’m Stacy Mitchell. I hope you’ll join us again in two weeks for the next episode of Building Local Power.
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