The liberal Center for American Progress and the Organization for Competitive Markets are trying to shed light on the effects of corporate concentration in U.S. agriculture and turn the tide on what they see as an eminent threat.
Officials from the think tanks outlined the effects on independent family farmers and U.S. agriculture and offered recommendations to protect producers and the industry during a conference call with the media on Tuesday.
Andy Green, CAP managing director for economic policy, said the American economy is facing a crisis of concentrated economic power, and rural America is no exception.
“Decades of weak enforcement and antitrust have permitted a record level of concentration that contributes to rising costs and suppressed earnings,” he said.
He said monopoly power is holding down the earnings of America’s farmers and driving them out of business.
Raising farm income and rebalancing power in rural America requires fighting corporate concentration with antitrust competition policy, empowering famers to bargain for fair prices and banning unfair, abusive and deceptive contracting practices, he said.
CAP has just released a report finding the largest four companies in their respective industries control 85% of the corn seed market, 76 percent of the soybean market, 84% of wet corn milling, 82% of soybean processing, 82% of beef packing and 66% of pork processing.
In addition, it noted an increasing number of livestock are grown under contract by packers and processors, leaving producers with little bargaining power.
The report paints a very bleak picture for independent family farmers, Joe Maxwell, OCM executive director and a fourth-generation Missouri hog farmer, said.
“We are controlled both on the input side and the output side and we’re more or less stuck in the middle being squeezed and dictated on how are farming operations are going to go,” he said.
If things don’t change, it’ll result in the total annihilation of independent family agriculture in the U.S. and turning the entire food system over to a handful of transnational corporations, he said.
CAP is calling on legislators and policy makers to restore competition with strong antitrust enforcement including a temporary moratorium on mergers, a cap on concentration and taking steps to break up monopolies and monopsonies in agriculture.
It also wants guarantees that farmers get a fair share of the fruits of their labor through alternative pricing and bargaining models and is calling for contract reform to protect farmers and their rights.
The organization is also pushing for the creation of an independent farmer protection bureau modeled after the Consumer Financial Protection Bureau – which was created to protect consumers from the predatory financial practices that helped cause the 2008 financial crisis.
The bureau should be empowered to investigate and stop abuses of market power, protect farmers’ contract rights, combat anti-competitive practices and have backup authority to block mergers, according to CAP.