Since World War II it has become apparent that the basic structure of our food production and distribution system has been undergoing fundamental changes. Perhaps the most noticeable change has come in the food retailing industry.
After World War II the supermarket began with increasing speed to replace the smaller neighborhood "mom n' pop" grocery store. In 1948, 27% of the nation's food sales were in supermarkets, but by 1963 supermarkets claimed nearly 70% of such sales.
The early growth of these markets came through internal growth and expansion, following the growing numbers of Americans moving to the suburbs, but as these wholesale and retail food businesses reached the saturation level a handful of supermarket chains began aggressively acquiring and merging with other smaller chains creating near monopolistic buying and selling practices in many areas.
Alarmed by the fundamental restructuring of the food supply and marketing system and the effect it was having on the economy and government farm programs, President Lyndon Johnson established in 1964 the National Commission on Food Marketing.
The Commission, consisting of 15 members -- the president pro tempore of the Senate, the speaker of the House and the president each appointing five members -- was to conduct a broad study of the actual changes throughout the food industry that had taken place in the past two decades, what these changes suggested about future trends, and what was necessary to ensure that the food industry would be both efficient and competitive.
The Commission was also asked to study and appraise public policy initiatives that would facilitate a more equitable food system, evaluate the effectiveness of government services for the food industry, assess the the effects of food imports, and recommend actions that could be taken by government, private enterprise and individuals. Congress, however, in passing the bill establishing the Commission, unwisely chose to delete the latter mandate.
Despite the fact that the Commission staff compiled many well-researched and competent reports and held well-conducted hearings, the Commission itself issued no set of conclusions due to a number of sharp divisions that existed between the nine majority and the six minority members.
In addition to a few general recommendations, four individual members of the majority also issued statements calling attention to the fact of the steady trend since World War II toward increasing concentration in national food store sales; that the imbalance of bargaining power was largely responsible for the deteriorating economic position of producers, small manufacturers and processors; that stronger action to provide protection to producers, distributors and consumers through improved reliability of price determinations and information was necessary; and that adequate and equal representation of consumers through the statutory establishment of an individual consumer agency was needed.
In the minority report, six members of the Commission so strongly disagreed with the "unwise and untenable conclusions" of the majority members that they urged the report not even be submitted to the president.
Because there was such a sharp division between the majority and minority members of the President's Commission on Food Marketing neither the Congress nor the White House believed the time was appropriate for new legislation affecting the food industry. Yet, unfortunately while many simply "filed and forgot" the Commission's report, the problems the Commission sought to redress only became more acute and complex.
Considering the fact that the Commission's work came at a time when the Johnson administration was preoccupied with its very own war in Southeast Asia and at the same time attempting to fend off domestic turmoil at home, it was surprising that the president immediately created by executive order yet another commission to examine the problems of agriculture and the food industry.
On Nov. 4, 1965, the National Advisory Commission on Food and Fiber and the President's Committee on Food and Fiber was established. The 30-member panel appointed by the president was directed to "make a penetrating and long-range appraisal of our agricultural and related foreign trade policies in terms of the national interest, the welfare of our rural Americans, the well-being of our farmers, the needs of our workers, and the interests of our consumers ... to construct a thorough and searching study of the effects of our agricultural policies on the performance of our economy and our foreign relations ... to prepare a report which will serve as a guide and focus for future decisions and policies in the vast and diverse complex of food and fiber."
Two years later the Commission summarized its findings and issued its recommendations in a report titled, "Food and Fiber for the Future."
One has only to examine the Commission's initial composition, however, to realize the tone and the direction it was to take. Seven of the 30 members were agricultural economists from the land grant college complex, seven were "farmers" or leaders of farm or cooperative organizations, and the other remaining members were from such institutions as General Foods Corporation, Agway, Inc., Archer Daniels Midland Co., Wilson & Co., Deere & Co., Campbell Soup Co., Bank of America, Mechanics and Farmers Bank of North Carolina, the National Cotton Council, etc. No representatives from the nation's increasingly vocal and active consumer movement served on the panel.
Throughout their report the Commission emphasized that it was time for a major redirection of the nation's food and fiber policy toward a "market-oriented agriculture." Mainly, they advocated increasing the advantage of the market's ability to allocate resources and distribute incomes by reducing the overcapacity of farmers through such means as the adjusting of cropland and helping those people who would be leaving agriculture anyway to earn more in nonfarm occupations.
The role of the government, however, in assisting these farmers was to be kept at a minimum so as not to interfere with the functioning of the free market. No attention was given in the report to the National Commission on Food Marketing's concerns regarding economic concentration in the food industry or the other related issues discussed in the former report.
Primarily the Commission recommended a number of social and economic measures, including social security for farm people, a federal minimum wage for farm workers, federal protection for farm labor unions, increased rural development programs, including improved social services in such areas and a stated minimum annual income for rural people.
Not unlike the Commission on Food and Marketing a decided majority-minority division of opinion was evident in the Commission's final recommendations. The 19-member majority was composed of four of the seven academic members, the farm and co-op leaders and only two of the industry representatives, while the minority was composed primarily of those Commission members from industry in addition to two academic representatives.
University of Illinois Professor of Agricultural Economics Harold G. Halcrow adroitly summarizes the work of the Commission:
"By avoiding the difficult questions of economic structure and concentration that so divided the Commission on Food Marketing, the Commission on Food and Fiber was able to reduce its differences largely to matters of timing and degree. But, by avoiding these more difficult questions of policy in food marketing, and by emphasizing, instead, the farm and rural problems, it not only drew attention away from the report of the Commission on Food Marketing; it probably contributed to government inaction on crucial matters affecting the food industry. The emphasis helped to veer national policy away from the difficult questions of economic structure and the effectiveness of competition in the food industry."
As a consequence of the Commission's report and the fact that the Kennedy and Johnson administrations found themselves deeply embroiled in domestic riots and foreign wars, the promise of a new era in farm and food policy in the 1960s was soon lost.
The policy making initiatives that were to emerge during this crucial decade thus came not from government, but rather were spawned from within those movements and groups battling for social and economic justice in the streets and fields of America.
Meanwhile, the food industry was successfully convincing government policy makers that the oligopolistic/monopolistic trends that the Commission on Food Marketing had expressed alarm over were false. Later, with the election of Richard Nixon in 1968, it was clear that corporate agribusiness had a close friend in the White House and that it now had little to fear from government in the way of regulatory legislation.
The Kennedy administration at its outset had recognized to a degree that the hunger problem, both at home and abroad, needed more attention than it had received in the past. But, it was not until 1967-1968 that hunger would really become a major domestic issue. Unfortunately, both the Kennedy and Johnson administrations failed to fully perceive that this issue was but part of a much larger problem, one which not only involved hunger, but also poignantly illustrated the economic plight of rural America and how government programs for decades had only tended to exacerbate the poverty of so many of its citizens.
In 1967, the President's Commission on Rural Poverty called attention to this situation, reporting that "this nation has been largely oblivious to these 14 million impoverished people left behind in rural America ... Instead of combating low incomes of rural people [US agricultural programs] have helped to create wealthy landowners while bypassing the rural poor."
For example, a look at 1964 Bureau of the Census figures showed that of the nation's 868,908 farmers with sales of $10,000 or more, only 7,036 were nonwhite operators mostly living in the South. Charles Hardin, a member of the Commission on Food and Fiber, had noted that "major programs have been discriminating against the poor farmers since the 1930s." Not only had these programs driven hundreds of thousands of farmers out of business, but they had also been instrumental in bringing about a mass exodus of the poor, unemployed and hungry from rural to urban America.
Next: Economic Concentration in 2002
A.V. Krebs operates the Corporate Agribusiness Research Project, P.O. Box 2201, Everett WA 98203; email avkrebs@earthlink.net; www.ea1.com/CARP/