Impact of Mega-Corporations on the Demise of American Agriculture

1560 words (6 pages) Essay in Geography

18/05/20 Geography Reference this

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The Demise of an American Treasure

 The U.S. farming industry has gone through many changes over the past four decades. Since 1979, there has been a sharp decline in the number of small farms in the U.S. The number of U.S. farms no longer operational during this period is approximately 300,000 (Nations Encyclopedia, n.d.)

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 There are many challenges that small and mid-size farms face that account for this decline. Prices both increasing and decreasing are a main concern for most farmers. Pricing causes financial pressure on many of the farmers. Prices decreased in the amount farmers are being paid for their crops, while operating prices to sustain the farm have increased. Operating costs include items like (seed, feed for animals, equipment, transport of goods, etc.) This disparity in pricing has forced many farmers to declare bankruptcy. Some have had their farms foreclosed upon. Since the economic crisis of 2008, bank financing for many farmers is more difficult to obtain (Harvie, 2017.)

 There are many reasons for the plight of the American farmer: climate, foreign trade tariffs and competition with mega-corporations. This paper will address the latter, mega-corporations.

What Does Corporate Concentration in Agriculture Mean?

 What has led up to mega-corporations taking over the agricultural industry? In 1890, the Sherman Anti-Trust Act was passed. It was a law that prevented businesses from monopolizing a market, allowing competition to exist. It required the federal government to investigate any company trying to monopolize the industry. When Ronald Reagan took office the Sherman Act was repealed (Hartmann, 2013.) Within the last decade megastores like Walmart and CostCo replaced local convenience and hardware stores. Now they have taken over the U.S. agricultural industry.

 In today’s economy, a small group of corporations control the agricultural industry, from production, processing to distribution. This control offers them greater political influence over the legislation that governs the food system, allowing them to manipulate prices affecting family farmers. The mega-corporations as sellers with high market power can inflate the prices of machinery, seeds, fertilizers and other goods that farmers need for their farms, and as powerful buyers, such as processors, suppress the prices farmers are paid.

 The USDA is the governing body that oversees the agricultural industry, which includes small family farms through to mega corporate farms, also known as industrial agriculture operations. The USDA favors more of a globalist policy over a family farm policy. As such, agri-business-based farming operations have special considerations that the small independent farms do not. It is this special favoritism that gives the mega-corporations unchecked power to distort markets and leave farmers and ranchers vulnerable to abuse and unfair practices. Consumers are also affected by unchecked corporate power, which means higher prices and fewer choices. Since the 1980s food prices have consistently risen, yet the farmer’s share of the retail market has consistently declined, by almost 50%. This unchecked power allows corporations to push down the prices paid to the farmers without passing their savings on to their customers (Bloomp, n.d.)

 Although there are just a few mega-corporations in the agriculture industry, they control a large percentage of the market. The following is a sampling of the market breakdown:

  • Control of the beef market is in the hands of four companies that control 83.5% of the industry.
  • In the U.S. the top four firms control 66% of the hog industry.
  • In the U.S. the top four firms control 58.5% of the poultry industry.
  • In the seed industry, there are four companies that control 50% of the trademarked seed market and 43% of the commercial seed market on a global level.
  •  Monsanto’s concentration in genetically engineered (GE) crops, controls over 85% of U.S. corn acreage and 91% of U.S. soybean acreage (Farm Aid, 2016.)

The command by mega-corporations make it impossible for the family farms to compete. For most farms to succeed they must do one of two things: get bigger or get out of the business. With the financial pinch being exerted on them by the mega-corporations, getting bigger is not feasible for many of the farmers or ranchers. Some farms and ranches may be able to contract with the mega-corporations as a supplier of products. This allows for saving their operation but many times they are not being paid what they are truly worth.

What Can Be Done to Help the Farmers?

 From a governmental standpoint, nine states have enacted statutes known as anti-corporate farming laws. These laws placed restrictions on certain corporate abilities to own and operate on farmland in those states. The nine states were Kansas, North Dakota, South Dakota, Iowa, Wisconsin, Nebraska, Minnesota, Missouri, and Oklahoma (Nat’l Ag Law, n.d.)  This is a deterrent in those states however, the corporations are large enough to operate facilities in other states that provide all their corporate needs.

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 There is a non-profit organization called Farm Aid, that has also worked as an advocate for U.S. farmers for the past several decades. Farm Aid, under the leadership of Willie Nelson has organized telethons to raise money for struggling farmers. Farm Aid has organized protests against corporations, they have testified in Congress, and they have organized the public to inform the American people of the threats that corporate concentration poses to the farmers and consumers, as well (Farm Aid, 2016.) In 2011, Farm Aid met with White House officials and attended a forum in Iowa with President Obama requesting fair credit access, antitrust enforcement and protections for farmers facing corporate abuses (Harvie, 2017.)

Some of the steps Farm Aid has pushed for to reign in corporations are:

  • America has several antitrust laws in place, but they are not being enforced. Enforcement of these laws are needed. These laws include the Sherman Anti-trust Act, Clayton Anti-trust Act and Packers & Stockyards Act.
  • Corporations need to be blocked to prevent mega mergers occurring throughout the food and agricultural sector.
  • The dairy industry has a very loose pricing policy which allows corporations to practice price manipulation. The government needs to enact pricing reform especially in this industry.
  • In the agricultural sector, USDA Farmer Fair Practice Rules need to be finalized, so that  market transparency can be increased, fair contracts can be established and the rights of farmers are protected.
  • In the federal checkoff programs that currently exist, ranchers and farmers are unfairly taxed on their goods in order to fund marketing campaigns that benefit mainly corporate agribusiness.
  • American consumers need to be given the opportunity to make informed decisions which support American farmers and ranchers. Reinstating Country of Origin Labeling (COOL) and other programs that increase food system transparency needs to be done by USDA.
  • Give the people a voice for the preservation of their communities. There are local control laws that need to be enforced which will defend the rights of local communities. Local municipalities are sometimes politically and financially motivated and allow the expansion and creation of corporate farms that threaten the air, water, soil and quality of life, without community input.
  • Corporations play too big a role in the writing of trade deals with foreign countries. Changes need to be made that reinforce the rules of food sovereignty and limit the role corporations play. (Harvie, 2017.).

 The U.S. is a capitalistic country. The ones with the money, run the country. Abraham Lincoln once used the phrase, “Government of the people, by the people, for the people.” In today’s world, these words have no meaning.

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