Farm co-op mergers reduce competition

Of any trends to be observed during the agricultural boom in the past 10 years, as well as the subsequent downturn, the most defining and enduring would be that of consolidation. Those farmers operating many acres were better suited to capture the benefits of a tremendous run up in prices, outbidding smaller farmers for land to rent as well as to purchase.

However, that aspect was already well known and has been well documented. The other consolidation trend that has occurred which has escaped the attention of most was that of the cooperatives that serve farmers by supplying inputs such as fertilizer, seed, chemicals, as well as by operating the elevators which buy and distribute grain to end users. Cooperatives have engaged in mergers just like the corporate agribusiness giants in the past several years which has yielded a significantly smaller pool of suppliers with substantial influence over the products that farmers use as well as the price of those products.

This anti-competitive atmosphere results in the shuttering of facilities that serve smaller farmers in the name of gaining efficiency, which is harmful to rural economies that once were driven by hundreds of farmers and now are mainly driven by a handful. Cooperatives are a critical player in the Ohio ag economy, and they have a responsibility to ensure that their business practices do not reduce choice for farmers in general or foster a business environment that favors only large farms.

The cooperative system was created to increase product choice and market access for all farmers, not just large ones and Ohio’s co-ops have a duty to see this as their mission and not to merely pursue a culture of corporatization seeking a seller’s cartel with too much leverage over those who feed this country.

Corey Phillippi West Jefferson