Ask any number of small or family farmers in the U.S. and, by and large, they'll all say the same thing: Big Ag is wreaking havoc on the nation's small farms.
Big Ag—or Big Agriculture—refers to extreme market consolidation in the agriculture industry. While there was once ample competition among agriculture markets, recent years have seen exponential growth in giant agribusinesses.
As a number of rural progressives have pointed out, corporate consolidation is one of the biggest concerns for family farmers.
The National Farmers Union (NFU), a progressive nonprofit organization dedicated to advancing the rights of the nation’s farmers, ranchers and fishers, explains in its policy brief that “consolidation has virtually eliminated competition in many agriculture markets, leaving family farmers and ranchers with little to no control over the prices they pay for inputs or the prices they receive for their products.”
In 2019, the Open Markets Institute (OMI) published a report titled “Food and Power: Addressing Monopolization in America’s Food System.” In it, OMI explains that everything in the American food supply chain, from the seeds farmers use to the products we buy in grocery stores, is now concentrated among a handful of big corporations.
Chicken or beef?
Take, for example, the poultry industry.
According to the report, 90% of the chickens raised in the U.S. are grown through what’s known as “contract farming.” Because poultry processors hold a monopoly over the industry, farmers have no negotiating power when entering into these contracts, the terms of which control everything from chicken feed to the medicines farmers can use to treat the animals and the prices they’ll be paid for them.
In 1986, the four largest poultry processing firms owned 35% of the market share. By 2015, that number rose to 51%.
While big agribusinesses capture a greater share of the market, the farmers themselves are struggling. Chicken is a $90 billion industry, and yet 70% of chicken farmers live below the poverty line.
Consolidation is even more evident in the beef industry. About one-third of all U.S. farmers raise beef cattle. In 1977, the four largest beef packing firms owned 25% of the market share. By 2015, that number rose to 85%.
The OMI report found that on average, almost 17,000 cattle ranchers have gone out of business every year since 1980.
Failure by (genetic) design
Additionally, farmers must also purchase their seeds, pesticides and herbicides from giant agribusinesses. Monopolies in the seed industry, however, mean farmers have no choice but to continue purchasing seeds from companies like Bayer, which merged with Monsanto in 2018.
In 2015, 78% of the market share of the corn seed industry was controlled by two firms—DowDuPont and Bayer. That same year, 76% of the soybean seed market was controlled by the four largest soybean seed firms.
“Seeds,” the report explains, “are often designed to terminate — or to fail to germinate — after one harvest, forcing farmers to purchase new seeds each season.”
In other words, agribusinesses have used advancements in the genetics field to force farmers to continue to purchase seeds from them.
In 2008, the market share of the four largest global herbicide and pesticide firms was 59%. By 2017, it was estimated to be at about 84%.
“Mergers mean that farmers have fewer and fewer choices for buying and selling,” OMI writes, “while vertical integration has meant that big agribusinesses face less competition throughout the chain and thus capture more and more of the profits.”
“Because of spreading agribusiness monopoly,” the report adds, “the prices farmers pay for inputs such as seed and fertilizer continue to rise rapidly. At the same time, growing concentration among meat processors, grain traders, food processors and retailers is responsible for driving down the prices farmers and farm workers receive for their labor.”
How did we get here?
Peter C. Carstensen, University of Wisconsin law professor and senior fellow at the American Antitrust Institute, argues that this increased concentration in agriculture markets is the result of a “past failure to enforce antitrust laws.” This concentration, he explains, is not just in the industries that supply farms, but also in those that buy, package and sell farm products.
“Concentrated markets,” he writes, “can and usually do impose serious economic harms on both producers selling into such markets and consumers buying from them.
For consumers, the consequence is readily evident at the grocery store. Food prices have gone up.
A report from the U.S. Department of Agriculture states that in 2019, grocery store or supermarket food prices rose 0.9%. USDA also predicted that in 2020, these prices would increase between 2.5 and 3.5%, and would continue to increase in 2021.
Farmers, however, do not reap the benefits of this increase in food prices. According to NFU, America’s farmers earn less than 15 cents out of every food dollar that consumers spend.
So what does all of this mean? In short, consumers are paying more money for food while farmers are earning less for their work. All the while, giant agriculture corporations reap higher and higher profits.
Tyson Foods, for example, ended 2019 with a revenue of $42.4 billion. That’s a 5.8% increase from 2018, according to Fortune. In 2010, its revenue was $28.2 billion.
Market regulation and breaking up monopolies
Carstensen argues there are three elements needed to restore competition in agriculture markets: stricter enforcement of current merger laws, revisiting and challenging antitrust laws, and creating legal protections for farmers who enter into contracts with big agribusinesses in order to “provide better information to and fairer terms for farmers.”
“It is essential to have more direct regulation of the market process in agriculture,” writes Carstensen.
Some progressive legislators have echoed similar ideas.
In 2019, then-presidential candidate Sen. Elizabeth Warren published her detailed plan for “leveling the playing field for America’s family farmers.”
“Bad decisions in Washington,” she wrote, “have consistently favored the interests of multinational corporations and big business lobbyists over the interests of family farmers.”
Among her plans, Warren wrote that she would “appoint trustbusters to review — and reverse — anti-competitive mergers, including the recent Bayer-Monsanto merger.” Second, she would break up “big agribusinesses that have become vertically integrated and that control more and more of the market.”
Fellow progressive Sen. Bernie Sanders also published a detailed plan for helping family farmers, which included Roosevelt-style trust-busting laws, placing a moratorium on future mergers—a policy that numerous progressive agriculture groups have called for—developing fair trade policies, and ensuring fair prices for family farmers.
Of course, both Warren and Sanders lost their bids for the Democratic party’s nomination. Nevertheless, their ideas reflect the needs of family farmers and ranchers.
President-elect Biden's choice to lead USDA, however, suggests that he will not be taking cues from Sanders's and Warren's progressive ideas on agriculture. Biden has nominated Tom Vilsack to serve as Secretary of Agriculture. It's a role Vilsack previously filled during the Obama administration.
Progressives and family farmers have long derided Vilsack, who spent the past four years serving as CEO for the U.S. Dairy Export Council, as being too close to Big Ag, and many are expressing concern that his policies will continue to favor Big Ag instead of taking it on.
Furthermore, Biden’s proposed plans for family farms are thin at best and lumped in with his plans for rural America. While he does state that he will pursue fairer trade policies and strengthen antitrust enforcement, his plans are far more moderate and nowhere near as comprehensive as Sanders’s and Warren’s.
It should also be noted that Obama also vowed to enforce antitrust laws and take on Big Ag, but neither he nor his Ag Secretary did so. With Vilsack's reappointment, progressives worry that USDA will allow Big Ag to become even bigger.
Building alliances
In addition to simply helping family farmers and ranchers, implementing these measures also has the additional advantage of appealing to voters who may otherwise never consider voting for Democrats. A number of otherwise staunchly conservative voters who advocate for things like gun rights and anti-abortion legislation also support progressive agriculture policy. This may provide a window for Democrats to make inroads with farmers, ranchers and rural voters who are affected by issues like environmental pollution caused by factory farms.
The Organization for Competitive Markets (OCM), for example, describes itself as an advocacy organization “working to expose and break the stranglehold of corporate consolidation in our food and agricultural economy” and seeks to fight for economic justice for the nation’s family farmers and ranchers.
At first glance, this may appear to be one of the many progressive nonprofit organizations looking to build justice for rural America. However, OCM describes itself as being simultaneously pro-business, conservative, liberal and populist. Its website’s masthead bears the likeness of famed trust-buster Teddy Roosevelt.
Even proponents of free markets have expressed a desire for increased government regulation in agriculture markets. Last year, OCM hosted the “Stop the Stealin’” rally (not related to 2020's "Stop the Steal" rallies), in which 500 cowboys and ranchers sought to draw attention to corporate consolidation. Numerous attendees arrived on horseback and carried giant American flags. Among the attendees were Trump supporters.
By standing up to Big Ag and enacting progressive agriculture policies, Democrats have the opportunity to both help the nation’s family farmers and ranchers while simultaneously making inroads with rural voters.
“Farmers are caught in a vise, but the squeeze on family farms isn’t inevitable,” Warren said. “We can make better policy choices — and we can begin by leveling the playing field for America’s family farmers.”
