Big agriculture and small farmers
The consolidation of the agriculture industry, with dominance by a few major companies, has become a focus of Washington policymakers. It was a key theme of an executive order President Joe Biden issued this summer on competition in the U.S. economy.
Among the concerns is whether small-scale farmers and ranchers are being increasingly hurt.
Rob Larew is president of the National Farmers Union, which advocates for family farmers and rural communities. The Associated Press recently interviewed Larew.
The meat processing industry appears highly concentrated. Four big companies process about 80% of all beef. What’s the impact on family farmers?
Consolidation has virtually eliminated competition in many agricultural markets. The farmer’s share of every dollar consumers spend on food has fallen from 50% in 1952 to less than 16%. A handful of massive plants process most meat. This system is vulnerable to shocks. A fire at a meatpacking plant in Kansas in 2019, the shuttering of many plants during the pandemic and a cyberattack on a major meatpacker have impacted markets, bringing lower prices for farmers and higher prices for consumers.
COVID hit the meat processing industry and its workers hard, with outbreaks at plants and people in crowded conditions getting sick. What should regulators do to bolster the food supply and ensure a more competitive marketplace?
Instead of the large, inflexible corporations that dominate our food supply, we need to boost local and regional farm and food systems. The Agriculture Department committed $500 million in July to help build additional meat and poultry processing capacity. USDA also established a new grant program to help smaller-scale plants get certified so they can ship meat and poultry across state lines.
The Packers and Stockyards Act, a law intended to protect livestock farmers from unfair practices by meatpackers, must be more strongly enforced. Regulators also must vigorously enforce antitrust laws, and they should review past mergers. If they find anticompetitive effects in mergers that violate the law, those companies should be broken up.
How are consumers affected by the problems with competition?
The shuttering of many packing plants due to the pandemic or fire has pushed prices at the grocery store through the roof. And consumers have only the illusion of choice at the store because so many brands are owned by so few corporations.
There are moves to change the rules for “Product of USA” labels on meat. Why is that important?
Under current rules, meat can be labeled a “Product of USA” if it's processed domestically but born, raised or slaughtered in another country. We need mandatory country-of-origin labeling for meat.