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On the Udder Hand

RSS By: Chris Galen, AgWeb.com

Chris Galen is the Senior Vice President of Communications for the National Milk Producers Federation .

Preoccupied with Bad Ideas

Dec 01, 2011

Although the squatters’ camps that were the central visual focus of the Occupy Wall Street movement have mostly been dissolved, the apparent idea behind those various rallying points still lingers:  that financial power and resources are too concentrated (whether that’s really true, is it really a problem, and if so, what should be done about it, is a whole different discussion).

What sparked my interest in the topic is how a commentator on the Motley Food website seized on the OWS movement to write about how the food production sector also needs to be “occupied.”  You can read Brian Stoffel’s whole piece here, but the author’s key argument is this:

“If we are all up in arms over an industry (banking) where the four biggest players control 50% of the cash, surely we should be wary of the fact that 90% of our most consumed food (corn, whether for human or animal consumption) is in the hands of just three companies!”

Stoffel goes on to allege that corn and soybeans, in additional to being created, planted and processed by near-monopolistic companies, are overproduced in the U.S., and thus overconsumed, leading to deleterious health effects and rising medical costs. 

These are arguments we’ve seen before in various forums – there’s really nothing new under the sun – but it’s the first time I’ve seen criticism of American agriculture linked to the Occupy Wall Street movement. What these contentions really illustrate is an overly-simplified, even naïve understanding of food production.  In fact, it’s really a series of data points, strung together in random order, in search of a fact.

Stoffel says that because DuPont and Monsanto control patents on 58% of the corn planted in the U.S., that’s a problem.  Really?  Microsoft and Apple control the software in probably 90%+ of personal computers in the U.S., while Proctor & Gamble, and Unilever, control a big share of laundry detergent sales (just to pick some other random consumer product).  Should we occupy laundromats after we march on Seattle, WA, to protest those concentrations? 

And what about the hundreds of thousands of farmers who actually make decisions each spring about what to plant?  Isn’t that really where the issue starts?  And if these myriad small businesses are the decision-makers when the seed meets the ground, how is that monopolistic behavior?

The author also said that because four companies are responsible for 85% of global high-fructose corn syrup sales, that’s also a problem.  Never mind that four sellers is hardly a monopoly, even of 100% of a product.  More to the point, he says that corn syrup is too cheap, and thus too readily available.  I always thought the purpose of a monopoly was so you could limit competition and charge MORE for your product, not have so much that it overruns every grocery store and vending machine in America  (That’s why a pricey hotel on Boardwalk will bankrupt you if you land on it in the game of Monopoly…isn’t that the point?).

untitled

How, exactly, if feed grain and oilseed production in the U.S. are truly the result of food cabals, are they hurting the availability and quality of the food supply?  Is the problem too much availability, or too little?  Or is really that people eat too much and want to blame someone else for their choices?  And where is a mention that food retailers are where the real concentration has occurred in the past generation?

Stoffel quotes Attorney General Eric Holder about the Department of Justice’s quest two years ago to find evidence of collusive, illegal behavior in the food chain.  What he failed to include is that the DOJ effort found….basically nothing.  The lead investigator behind the effort, in fact, left the Justice Department this past summer for a job at a big New York law firm. 

And one last thought:  if “agribusiness” really needs to be occupied, why don’t some of these unemployed OWS protestors start their own farms?  That would kill at least two birds with the same stone.


 

 

 

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COMMENTS (1 Comments)

two_bushels - NM
Chris,

I think you -- and Stoffel as well -- are focused on the wrong end of market concentration, which has the potential to mislead farm-side readers. As I'm sure you know, the vertigally-integrated companies that dominate the processed foods industry exploit their "monopoly" power through pricing on cheap inputs marked up for retail. But it is their "monopsony" power -- the power held by a dominant seller in a market with many buyers -- that is used to keep the cost down on inputs sold to them by farmers. Most farmers I know get this, but I'm pointing it out in case your points cloud the issue.

At bottom here are system dynamics that no single farmer, DOJ official or industry spokesman are going to elucidate, let alone change, with a single crop selection, antitrust case or column. Now there's a true parallel with the OWS movement.
9:21 PM Dec 1st
 
 
 
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