Corporate Control in Agriculture

A handful of corporations control our food from farm to fork. Their unbridled power grants them increasing political influence over the rules that govern our food system and allows them to manipulate the marketplace – pushing down the prices paid to family farmers and driving them out of business. For eaters, extreme consolidation leaves fewer choices in the grocery aisle and higher prices, while corporate-written policies are sparking growing food safety concerns and less transparency in the marketplace. In sum, our corporate controlled food system damages rural communities, local economies, public health and the soil and water needed to sustain food production.

How much power do corporations wield?

U.S. agriculture suffers from abnormally high levels of concentration, meaning just a handful of corporations control nearly all of our food production, processing, and distribution In a healthy economy, multiple firms can sell their goods to multiple buyers in an open, competitive market.

Most sectors of the U.S. economy have concentration ratios around 40%, meaning that the top four firms in the industry control 40% of the market. If the concentration ratio is above 40%, economists believe competition is threatened and market abuses are more likely to occur: the higher the number, the bigger the threat. Almost every sector in agriculture is well above these levels.

How does corporate power affect farmers?

Unchecked corporate power distorts markets and leaves farmers and ranchers vulnerable to abuse and unfair practices. Because farmers rely on both buyers and sellers for their business, concentrated markets squeeze them at both ends.

Farmers need to buy things to operate their farms, like seeds, machinery, fertilizers and other goods. Sellers with high market power can inflate the prices farmers must pay for these items. Meanwhile, processors and other powerful buyers can suppress the prices they offer farmers. Often having no other options for companies to sell to, farmers are forced to take whatever prices they can.

The razor-thin profit margins on which farmers are forced to operate often push them to “get big or get out”—either expanding into mega-operations or leaving the land altogether. (Read more about uncompetitive markets and their effects on family farmers here.)

Our Farmer Heroes have something to say about corporate power:

• Mike Weaver, a poultry grower in West Virginia, and The Crutchfields, poultry growers in Arkansas, reveal how corporate giants are able to abuse farmers’ rights.
• Mary Hendrickson, a professor at the University of Missouri, discusses the effects of corporate power in the food system.
• Jim Gerritsen, an organic farmer in Maine, speaks out at The Farmers March at Occupy Wall Street in 2011.
• Watch former poultry farmers Craig Watts and Kay Doby share their story:

What does corporate power mean for eaters?

For all of us who eat, unchecked corporate power means higher prices and less choice. Despite the concept of cheap food and “feeding the world” that the industrial food system promises (and uses to justify the damage the system inflicts upon farmers, rural communities and our soil and water), their extreme market power means corporations can push down the prices paid to farmers without passing on their savings to consumers. What’s more, the farmer’s share of the retail food dollar plummeted by fifty percent.

What is Farm Aid doing about it?

Farm Aid has a long history of fighting corporate abuse. Since 1985, Farm Aid has rallied alongside farmers, testified before Congress, and organized the public around the threats that corporate power poses to family farmers and eaters alike.

• On June 18, 1987, Willie Nelson and John Mellencamp joined Senator Tom Harkin to testify before the U.S. Senate about the family farm crisis and corporate monopolies expanding in agriculture.
• In 2010, USDA and the Department of Justice (DOJ) conducted public workshops to investigate concentration, antitrust violations and competition in agriculture. Farm Aid heavily engaged in each workshop, working with farm groups and family farmers across the country to make sure farmers’ voices were heard. Following the workshops, Farm Aid Board Artists Willie Nelson, John Mellencamp, Neil Young and Dave Matthews called for immediate action by the USDA and DOJ to address antitrust violations.
• In 2011, Farm Aid attended a series of meetings with White House officials and a forum in Iowa with President Obama requesting fair credit access, antitrust enforcement and protections for farmers facing corporate abuses.
• In 2011, Farm Aid joined over 400 organizations in calling on the FDA to mandate labeling for all GMO foods. Since then, Farm Aid has supported GMO labeling in a series of state ballot initiatives in 2012, 2013, 2014 and 2015 in WA, OR, CA, CO, VT, and NY.
• In 2013, after farms in Oregon were contaminated with unauthorized GMO wheat and faced dramatic economic losses after export market rejections, for a series of farmers and farm leaders to meet with U.S. Secretary of Agriculture Tom Vilsack concerning lax regulatory enforcement around genetically engineered production, seed trials, commercial release and other factors that threaten the markets of conventional and organic farmers.
• In March 2015, Farm Aid attended The Iowa Ag Summit that would broadcast a corporate agriculture agenda for the country. Prior to the event, Farm Aid President Willie Nelson authored an op-ed in Politico, pushing for politicians to support family farm agriculture, not corporate agriculture.