Give Farmers a Level Field

In the 2008 political campaign still to come when it comes to rural poverty we can expect to be hearing the candidates talk about the traditional rural development approach.

Only John Edwards has addressed the problem in any kind of realistic way. Certainly in addressing rural poverty any candidate who fails to acknowledge that fair prices for family farmers is the linchpin for the type of community development we need in many of our rural areas will become irrelevant to a large majority of our rural citizens.

Former Yale University chaplain William Sloan Coffin once observed, "it is one thing to say with the Prophet Amos, 'let justice roll down like mighty waters,' and quite another to work out the irrigation system."

In pursuit of genuine community development in rural America, therefore, candidates must be prepared to insure that family farmers receive a fair price from the market for what they produce, that anti-trust laws will be strictly enforced so family farmers have a truly competitive market to sell their product to and lastly guarantee to the men, women and children who harvest and pick our crops the same rights currently enjoyed by organized labor -- the right to organize and bargain collectively for just wages and working conditions.

Previously we have discussed the fair price issue for family farmers but it is imperative that in order to insure that they have competitive markets available to them that the nation's anti-trust laws be enforced by a Department of Justice that takes its role seriously and not as a dumping ground for political appointments.

One such effort at enforcement came in 1999 when Sen. Paul Wellstone, D-Minn., sought to impose an 18-month moratorium on mergers within corporate agribusiness. By an overwhelming 71-27 vote, however, the US Senate defeated the amendment.

The moratorium would have applied to all mergers where one company had net revenue of more than $100 million and the other had more than $10 million. Farmer-owned cooperatives would have been exempt from the measure.

Leading the nation's "Prairie Populists" at the time to fight for broader antitrust laws, Wellstone, while expressing disappointment that the expected 40 Senate votes supporting the moratorium failed to materialize, told Successful Farming's Dan Looker, "They don't want to offend any of the big conglomerates for anything. I do. I want to take on the economic interests."

Supporters of the moratorium stressed that they would be targeting those senators who voted against the amendment as Republicans also blocked Wellstone from making last-minute changes intended to attract additional GOP votes.

Iowa's Chuck Grassley was the lone Republican supporting the amendment and said he voted for the Wellstone amendment to send a signal to the Justice Department to take a closer look at agribusiness mergers and to let the agribusiness community know Congress is concerned about the unfair disadvantage created for independent producers with increased concentration.

"With the steady increase in concentration, it's no wonder family farmers believe their independence and access to a competitive marketplace is becoming a thing of the past," he said.

Likewise, populist farm groups complain that because of lax antitrust enforcement, producers are losing their independence and bargaining power as the number of food processors, grain traders and farm suppliers shrinks.

As previously noted a recent National Farmers Union-commissioned study conducted by Drs. Mary Hendrickson and William Heffernan of the University of Missouri on the concentration of agricultural markets showed that the top four beef packers dominate 83.5% of the market, four pork packers control 66% of that market and the top four poultry companies process 58.5% of the broilers in the United States. Tyson Foods is listed in the top four of each of these categories. The retailing industry also has been gradually increasing its degree of concentration, with the top five companies controlling 48% of US food retailing, compared to 24% a decade ago.

Clearly, the Justice Department in recent years has not done enough to curb the wave of agribusiness mergers and acquisitions including the purchase by giant grain trader Cargill Inc. of Continental Grain's grain merchandising division. Justice Department officials countered that such mergers would help farmers by cutting costs for US companies, making them more competitive with foreign competitors.

Sen. Byron Dorgan, D-N.D., however, charged that such companies "are choking the economic life out of the little guy, the little producer. Why? Because they can."

Some of the consequences of this lack of enforcement can be seen in January, 1999 testimony before the US Senate Agriculture Committee hearings on concentration in agribusiness. C. Robert Taylor, Alfa Eminent Scholar and Professor of Agriculture and Public Policy at Auburn University, testified about the implications for the agriculture economy of general trends in vertical integration and market concentration in agribusiness.

During the 1990s, Professor Taylor pointed out, the rate of return on investment for retail food chains was 18%, for food manufacturers the rate of return was 17.2%, for agriculture banks it was 10.8% and for farming the rate of return from current income averaged 2.38%! Looking carefully, however, at Professor Taylor's testimony it is noted, buried in a footnote, that "the average return to farming may actually include a return to integrators and non-family corporations, thus overstating returns to farmers, per se."

Looking to the future the National Family Farm Coalition's president, Iowa farmer George Naylor, has testified on behalf of his coalition's 22 grass roots organizations, emphasizing that what is desperately needed is a new farm policy proposal to create a sustainable farm and food system.

"Our farm bill, called the Food from Family Farms Act (FFFA), would improve the environment, create new economic opportunities in rural America, and support similar aspirations in every other country on our beautiful planet. Unlike the current farm policy, provisions in the Food from Family Farms Act, predicated on the principle of Food Sovereignty, will build good will among our trading partners and give them a chance for balanced sustainable economic development."

Other main features of the Food from Family Farms Act include a price support system, food security reserves, and conservation set-asides with full planting flexibility, which would work together to guarantee prices that reflect the true cost of production.

The Food from Family Farms Act encourages such a transition through full implementation of the Conservation Security Program (CSP), offering incentives on working lands for more conserving crops and practices which fit well with diversified family farming, bio-energy and local food production.

As Naylor stresses "a balanced family farm system will require less fossil fuel and give opportunities for farmers to become producers of clean renewable energy.

"The goal of food, farm, and trade policy should be a globally sustainable and adequate supply of wholesome food at affordable prices. A family farm system is the most effective means to provide food quality and safety, diversity of production, equitable social and economic opportunity, and preservation of land, water, and bio-diversity," he stresses.


A.V. Krebs publishes the online newsletter, The Agribusiness Examiner, email He is author of The Corporate Reapers: The Book of Agribusiness.

From The Progressive Populist, June 1, 2007

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