SPRINGFIELD, Ill. – How the consolidation and mergers in the agri-food system has impacted the livelihood of farmers along with long-term solutions to the issue  was the topic of a July 31 panel discussion hosted by the Illinois Stewardship Alliance (ISA).

“Two companies control 90 percent of the phosphorus and potassium fertilizers in the U.S., and four companies control 85 percent of our beef processing. In addition, just four companies control 65 percent of the grocery stores in the country,” said Ed Dubrick, chief policy organizer for the ISA, referring to data from FarmAction’s Agriculture Consolidation Data Hub.

“Taylor Farms and the cyclospora outbreak shows us just how large of a reach these consolidated companies have. Fifty-four percent of fresh-cut salad comes from four companies. The food industry is dominated by a few significant players.”

According to Dr. John Ikerd, professor emeritus of agricultural economics at the University of Missouri and a globally recognized expert on agricultural sustainability and economics, the consolidation of the U.S. agri-food system began around a half-century ago. The shift began with the public demand of fast food and processed, cheap corporate food in the 1970s according to Ikerd, an author of several books on agricultural sustainability and economics who has also held university positions at North Carolina State, Oklahoma State and Georgia.

“We see it reflected in our focus on cheap food and low food prices. We see it reflected in food that is cheap to produce and high in calories and lacking in nutrition,” Ikerd said. “As the retailers push to keep the prices down, we go to more highly processed foods and junk foods. It’s all a consequence of a focus on economic efficiency and keeping food cheap.”

As the “big four” food companies continue to put pressure on farmers to sell their commodities for cheaper prices, food prices for consumers have increased faster than the baseline rate for inflation since the year 2000, according to Ikerd. “The whole idea that we are going to have cheaper food by letting these corporations consolidate to achieve economies of scale has turned out to be exactly the opposite,” he said. “We’ve allowed them to build a shared monopoly and raise prices instead.”

The issue has become so entrenched that the food companies have achieved a status of power that allows them to basically dictate government policy, Ikerd continued: “The only power greater than corporate power today in terms of addressing these issues is the power of the people coming together and acting collectively. We are paying a very high price for cheap food.”

Greg Gunthorp, a pastured pork producer and solar grazier from LaGrange, Ind., said the Farm to Table movement, which began around 1976 on the west coast, has been “bastardized and co-oped” by “Big Ag.” This has stolen hard-fought market share from small farmers that rely on local sales of products such as produce, fresh eggs, cheese and meat, he said.

“I would argue that now the overwhelming majority of Farm-to-Table comes off the back of the same truck from the same suppliers as the commodity producers. I think the most recent recall is an excellent example of that. When Taylor Farms’ recall touches Taco Bell, Chipotle and Whole Foods, I think it’s clear that our whole niche marketing and processing has been bastardized and co-oped by the big guys,” Gunthorp said. “(Farm to Table) is now coming out of the marketing and advertising departments of Big Ag rather than out of the regenerative, small operations out here in rural America.

“I think that is part of the root cause of this cause of concentration and consolidation; if there were more players in the market the market would police itself. I also believe the U.S. Department of Agriculture, the Department of Justice and the Federal Trade Commission have all been on vacation regarding antitrust largely since the 1970s.”

Gunthorp, whose operation includes an on-farm full USDA-inspected slaughter and processing plant, argued that the government must join small farmers in committing to four priorities aimed at busting up agri-food monopolies and prioritizing local and regional foods. “I think we need subsidy reform; we need direct subsidies and indirect subsidies – the crop insurance, the revenue insurance programs, the PRFs, all of the insurance programs. We also need the government procurement dollars that are almost 100 percent directed toward industrial agriculture,” he said.

“We also need anti-trust enforcement that has to include mergers and acquisitions, and breaking some of (the current monopolies) up. It has to include a strong stance on ethics because of the excessive power and control over policy. The influence over the government these big and powerful corporations have is out of control.”

In addition, past USDA meat and poultry inspection standards under the Packers and Stockyards Act need to be restored to end the “harassment” of small producers attempting to enter the marketplace, according to Gunthorp. “They make it difficult for legal entry into the marketplace for the smallest players. They use the Packers and Stockyard Act to allow any mergers and any activities and are only making sure the scales are working and people are sending out the checks they are supposed to be sending,” he said.

Gunthorp also wants to see Truth in Labeling enforced by the USDA and FTC. “They need to ensure there is some label of transparency in the words and the advertising used in products.” 

The ISA panel discussion, “Cultivating Competition,” is archived at https://ilstewards.org/.