| From a sustainable food & food justice perspective, the problems in our food system are a bit like a chicken and egg dilemma. Huge, powerful corporations are producing unhealthy, unsustainable food (which is distributed in an unjust way) - often treating the workers who make the food very unfairly as well - and yet it's all legal. Or their practices are illegal but the law is not adequately enforced. So the solution is to change the laws or have the laws enforced - except the same powerful interests control quite a bit of government via lobbying and campaign donations, etc. So where do you start?
Well, one answer is to reduce the power of these corporations. And fortunately, we DO have laws on the books saying that companies cannot engage in anti-competitive practices. And we have an Obama DOJ that is interested in looking into this. Better yet, Congress need not be involved. Here's a list of the Dept of Justice's workshops:
Dates, Locations, and Topics
March 12, 2010 - Ankeny, Iowa
Issues of Concern to Farmers
Introduction to the workshops series with a focus on the issues facing crop farmers. Discussion topics may include seed technology, vertical integration, market transparency and buyer power.
May 21, 2010 - Normal, Alabama
Poultry Industry
Discussion topics may include production contracts in the poultry industry, concentration and buyer power.
June 7, 2010 - Madison, Wisconsin
Dairy Industry
Discussion topics may include concentration, marketplace transparency and vertical integration in the dairy industry.
August 26, 2010 - Fort Collins, Colorado
Livestock Industry
This workshop will focus on beef, hog and other animal sectors. Topics may include enforcement of the Packers and Stockyards Act and concentration.
December 8, 2010 - Washington, D.C.
Margins
This workshop will look at the discrepancies between the prices received by farmers and the prices paid by consumers. As a concluding event, discussions from previous workshops will be incorporated into the analysis of agriculture markets nationally.
For full details on the workshops, see the DOJ's website.
There are two types of consolidation - horizontal and vertical. Horizontal consolidation means you have tons and tons of market share selling the same product. For example, Monsanto buys up many smaller seed companies to expand horizontally. Vertical consolidation means you expand into different stages of a product's development. For example, Tyson breeds baby chicks and owns them all the way until they go to the grocery store. From the breeder, the chicks go to farmers who have contracts with Tyson (the farmers never officially own the chicks, even while raising them). Tyson picks up the chickens from farmers when they are full grown, slaughters them, and sells them. I believe they also provide the farmers with the feed and medications for the chickens.
Each type of consolidation - horizontal and vertical - reduces the amount of competition in an industry. While it is a GOOD thing for innovative companies to prosper, once a company because so powerful, it no longer needs to innovate to stay in charge. Furthermore, without much competition (or even the possibility of future competition), the corporation can jack up the prices.
Sometimes large, powerful corporations use their size to unfairly oust competition from smaller companies. A great example is when Wal-Mart comes into a town and builds three SuperCenters even though the town really only can support two. Then, after all of the Mom n Pop businesses close because they can't compete with Wal-Mart, Wal-Mart shuts down one of the SuperCenters. Another example (and this IS illegal) is when a company sells their products below the cost of production. A large company may have deep pockets and the ability to do this long enough to put their smaller competition out of business.
Obviously, a monopoly has the ability to jack up prices because there are no other companies around to compete with lower prices. However, when a market is consolidated (the largest 4 companies control over 40% of the market), they can raise prices without officially colluding. You can find out how consolidated various U.S. agricultural industries are from the Heffernan report. Note that the most recent report is quite out of date because we've had some very significant mergers in the past 2 years (JBS Swift merged with Smithfield, and then went after Pilgrim's Pride).
Here are some ways that you might be noticing the effects of consolidation in your life:
• It's harder and harder to find healthy, locally produced foods in your community -- especially if you live in a low-income area, there might not be a supermarket for miles.
• Prices are rising at the supermarket, but you've heard that farmers are struggling -- and big food companies have made record profits this year.
• You feel like you don't have much choice about the food you eat -- maybe the produce selection is bad, or you don't like that everything seems to be made with corn products.
• It's hard for small food producers and processors to find markets for their products -- and it's hard for consumers to find products made by small producers.
• Food seems less safe. You've read that the outbreak and spread of bacteria like E. coli happens much faster when meat and vegetables are processed in big centralized locations.
• Local farms are going out of business, because small farmers can't compete with prices set by industrial farms and consolidated buyers.
• There aren't many decent jobs in food and farming anymore -- there's a real lack of opportunities for both urban and rural youth who are interested in growing and preparing food.
• What's in your food, anyway? And why aren't there decent labels telling you where it grew, what chemicals are on it, and if it's genetically modified?
• There is a "revolving door" of personnel between corporate lobbyists and government regulators. No wonder corporations aren't held to strict standards.
• Many rural communities have become ghost towns. The farmers that have survived often find themselves entirely at the mercy of corporations who own all parts of the supply chain (called "vertical integration") and can set prices in such a way to drive competitors out of business.
• Just one company controls the majority of seeds in the US, and regularly threatens farmers who don't buy its seeds.
• Cows, chickens, and pigs are being raised in squalid conditions on huge industrial feedlots and pumped full of unnecessary antibiotics, which is unhealthy for them and potentially unsafe for the people eating them.
• The food you can afford is bad for you; healthy food is expensive.
• Food is grown and raised in ways that are terrible for the environment, with methods that pollute the water, poison the soil, and threaten our long-term food security.
• A lot of food from the store just doesn't taste very good, which raises questions about where it's come from and how it's been treated.
So, what do you say in your comments to the DOJ? You can see sample letters if you'd like, or you can use this template:
State who you are -- parent, teacher, farmer, cook, gardener, community leader, eater... whatever feels relevant.
State that you are concerned about the consolidation of corporate power in the food and agriculture sector.
State your primary reasons why. Some examples to get you started (you can find more food for thought at www.usfoodcrisisgroup.org):
* you've noticed prices rising at the supermarket and don't feel like you can do anything about it (a lot of big food companies have made record profits this year -- even as consumers are paying more for food.);
* you're concerned about your family's safety (outbreak and spread of bacteria like E. coli happens much faster when meat and vegetables are processed in big centralized locations.);
* local farms are going out of business (many small farmers can't compete with prices set by industrial farms and consolidated buyers.).
This section can be short and informal; don't worry about spelling out the connections too precisely. The important thing is to express from your own experience what most concerns you or how you've been affected by the effects of corporate consolidation in the food industry. Be honest and speak from your heart.
Thank them for the opportunity to submit comments.
Sign your name and address
For an absolute plethora of information on the subject of antitrust work and market consolidation, check out the U.S. Food Crisis Working Group's antitrust documents.
Here's what the biotech lobby plans to say (to defend the status quo):
Private investment and innovation in seed genetics and biotechnology gives independent farmers access to tools that allow us to be more competitive on the local, national and international level.
There is more choice in terms of seeds and seed traits available in the marketplace than ever before. This "freedom to choose" includes products from multinational companies as well as some 200 corn and soybean independent seed companies.
Technology is the reason there are so many quality options in the marketplace. Every year, choices are made from the variety of available seed products from the numerous companies offering the products. Access to this technology has had - and will continue to have - a positive impact on crop production.
Seed quality, which has improved greatly due to innovation and technological advancements, improves crop productivity and quality. Technology has increased per-acre production, while using fewer resources to generate that harvest. It has helped farmers more efficiently utilize and preserve natural resources like water and energy.
Agricultural innovation is needed to increase world food production. With the United Nations predicting that our planet must double food production to feed an anticipated population of 9.3 billion people by 2050, continued innovation and technological advancements in the seed industry are vital in ensuring that we meet these challenges. |
