Letter from Langdon: Monopoly Forever
Monopolies have consumed American food production. The only competition in the agricultural marketplace is farmer against farmer.
The Missouri House of Representatives has passed a bill put forth by the Missouri Senate, SB 391, that outlaws something called “local control.” Odds are good that Governor Mike Parsons will sign it.
They’ve been working on this for awhile. The waiting game is finally over.
Local control was an obstacle to corporate-owned livestock and the monopoly they represent. It was a legal mechanism that attempted to hold big corporations at arm’s length from rural communities and the last hope of rural Missourians who don’t see manure as an asset.
But corporate owned livestock represent more than monopolies. They are the poster child for livestock concentration, degraded water quality, poor air quality and worse quality of life for thousands of rural Missourians. Local control protected communities where our lifestyle and family values bind us together.
None of that seems to matter in the global economy, whether in Washington D.C. or Jefferson City.
Those of us who keep track of the news know our country is engaged in a trade battle with China over stolen technology. But in our state capitol, Jefferson City, Missouri, legislators never met a corporation they didn’t like, even if it comes from China. That’s why they’ve passed laws allowing more ownership of Missouri farmland by foreign corporations, most notably one in China that purchased Smithfield Foods and most of its Missouri assets. Had our lawmakers not done that, it might have derailed the purchase of an American corporation by a Chinese-government-owned conglomerate.
We wouldn’t want that, would we?
China’s investment in U.S. livestock and meat production is only the tip of an iceberg-sized monopoly of meat packers who have bypassed traditional agriculture, very nearly ending private livestock and poultry production on family farms. America’s family dairy farmers are in much the same place thanks to trade disputes with Mexico and Canada over steel and aluminum imports and cheese.
Retaliation by our trading partners has fallen squarely on the American dairy exports our farmers relied on.
While tariff wars didn’t start dairy’s problems, they have made them worse. The heart of the problem has been anticompetitive dumping of milk protein concentrate in U.S. markets as corporate dairies expand production with thousands of cows in one location, creating lower milk prices and forcing thousands of family dairy farms—the ones who call their cows by name—out of business.
With the overall ag economy in full retreat since 2013, farmers across the nation face some of the most daunting challenges seen in generations. For instance, grain and oil seed farms have seen steadily declining prices forced into steeper decline, again by relatively recent trade wars and tariffs on imported Chinese goods. While the trade wars represent differences of opinion on what’s fair in world competition, the American farmer’s inability to profit rests with the fact that our government has offered no opposition to continual corporate consolidation. They’ve allowed a handful of companies to run out the clock and grip everything from livestock markets to seeds and pesticides used to grow most major crops.
It’s true that there are close to as many brands and products as ever for farmers to choose from when growing their crops. But what is also true is that they represent a lazy-Susan selection replenished by three or four big multinational corporations. For instance, thanks to Monsanto’s seed patent monopoly, they were able to absorb over 600 small seed companies before being soaked up by Bayer, the German multinational corporation.
Farm pesticides like Monsanto’s Roundup have always been a favorite of pharmaceutical companies. Now seeds are too, thanks to the relationship between patented genetically modified seed and pesticides targeted toward their use. It was a pharmaceutical company that gave us Monsanto (actually Monsanto was a pharmaceutical company until it renamed itself Pharmacia) and fittingly, it is a pharmaceutical company where Monsanto’s products now reside.
Ashes to ashes, dust to dust.
About the only competition American farmers are seeing today is among themselves through a diminishing market for their products. In a world where farmers struggle to grow and market their own livestock or milk without a corporate contract, farmers are paying about the same record high prices for seeds and pesticides to grow crops in a failing marketplace clogged by surplus, spats, and squabbles where corn and soybeans fail to bring half what they once brought. In a bit of irony, if seeds and pesticides were subject to the same set of competition rules farmers are (supply and demand), our blood red ink might be tinged slightly black in the reflection of our own labor.
In the case of contract livestock and poultry production, when farmers owned the animals they raised from pig or chick to market, in times like these when African swine fever or a few years ago Asian bird flu ravaged markets in parts of Asia, higher demand for American products offered respite and raised the bottom line, healing financial wounds from previous years of low prices. This year though, with swine flu killing off millions of hogs in Asia, the American contract farmer continues to absorb upkeep, insurance, interest, utilities and a host of other expenses for the same payment in good times but not necessarily bad. That’s because contracts issued to farmers contain mandatory arbitration clauses favoring the corporate contractor. On the other hand, owners of animals get to bank profits for the corporation and its highly paid executive leadership.
In another bit of irony, in this age of tariffs China can’t lose because they actually own many of the American hogs and pork currently under tariff retaliation. The Chinese take money out of one pocket putting it into the other while their American-grown company Smithfield Foods smiles all the way to the bank. Perhaps the most bitter irony of all is that among Smithfield’s many triumphs is Farmland Foods, the defunct farmer pork cooperative with its trademark weathered barn and family farmers on the label.
That’s because they couldn’t compete in a fixed market waiting-game against corporate monopolies. Thanks to the blind eye our government casts toward competition, you could say China now owns the family farm.
All it took was time.
Richard Oswald is a fifth-generation Missouri farmer from Langdon. He is membership and policy director for the Missouri Farmers Union.