Cattle conglomerates
Big agribusiness hurts small farmers – and consumers.

By Ralph Nader

ONCE IN A while, Congress takes on a powerful corporate lobby that has overreached and is squeezing the little guys. Remarkably enough, the Senate has already passed a farm bill that prohibits meat packer ownership of livestock. Four giant companies control 83 percent of the nation's cattle slaughter and about 63 percent of the hog slaughter in the country; this ban is directed at the vertical integration of this industry, which comes at the expense of small farmers, consumers, and the environment.

The bill now goes to the House of Representatives, where it will need grassroots support from all citizens and carnivores who care about the domination of our economy by big business.

The Organization for Competitive Markets (OCM, www.competitivemarkets.com) – a civic advocacy group composed of farmers and university academics – has documented a disturbing trend that rebuts the industry's claims of efficiency through ever growing bigness. Farmers' prices are plunging, while consumer prices for meat are rising at three times the rate of general food price inflation.

How is this so? First, rapid consolidation of meat packers, through mergers and acquisitions, has meant fewer buyers for livestock at the farm gate. In fact, today, many small and midsize farmers in this country have only one bidder for their production. Moreover, these large meat packers are also moving into livestock production, creating, for example, those massive hog farms that lead to environmental havoc and pollute water. This vertical integration facilitates supply manipulation in order to engage in price reductions for the produce the meat packers purchase.

The packers then turn around and pocket the growing spread between farm-gate prices and what wholesalers or chain supermarkets pay. The meat packers have reported record profits in the past four years as the rate of family-farm loss continues to increase. Consumer beef prices rose 9 to 11 percent from November 2000 to November 2001 – three times the rate of general food price inflation. The consumers are not receiving the benefits of the asserted efficiencies of bigness – lower prices or higher quality.

A majority of senators came to the conclusion that prohibiting packer ownership of livestock is a necessary first step toward regaining competition and reducing barriers to new competitors in the food-chain system. Many decades ago Congress prohibited railroads from owning coal mines for much the same reasons.

The Senate farm bill contained an overall "Competition Title" that also required country-of-origin labeling, a ban on agribusiness-imposed arbitration clauses in livestock contracts, and a limited prohibition on agribusiness-imposed confidentiality clauses in livestock contracts. More than 200 organizations across the nation have signed a statement in support of these pro-competition provisions.

There is an unprecedented crisis in rural America that has nothing to do with locusts and droughts. It has everything to do with monopoly, duopoly, and oligopoly. As the OCM's recent letter appealing for support reads, "Biotech seed companies like Monsanto and DuPont/Pioneer have more monopoly power than ever as they buy up competitors, patent seed and make agreements with one another. Retail chain supermarkets are increasing their market share, increasing profits, and forcing down the farm share of the consumer dollar. The two dominant milk processing firms in the country, Suiza Foods and Dean Foods, were allowed to merge by the U.S. Department of Justice last December."

The takeover of farm production or through "contract agriculture," which has produced the poultry peonage of chicken farmers to giant processors like Tyson Foods and Perdue Farms, sketches the end of a small-farm economy and its regenerative rural culture.

We should never forget that the greatest political reform movements, the producer cooperative subeconomy, and much of our music and festivals and other connecting traditions came from rural America.