U.S. Food Industry Highly Consolidated, Says Food & Water Watch

Food & Water Watch has issued a report detailing how the consolidation of business along the entire food chain has resulted in farm losses, layoffs and higher prices with fewer choices for consumers. Titled “The Economic Cost of Food Monopolies,” the report discusses the effects of consolidation in Iowa’s hog sector, New York’s dairy industry, Maryland’s poultry production, the organic soybean market, and California’s processed fruit and vegetable industry. According to the advocacy organization, “The agriculture and food sector is unusually concentrated, with just a few companies dominating the market in each link of the food chain.” The pace of consolidation is attributed, particularly in the produce sector, to international trade agreements, such as the North American Free Trade Agreement, that by facilitating “lower U.S. tariffs, combined with loosened investment rules for U.S. companies operating in other countries, encouraged U.S. food processing companies to invest in factories overseas and shutter plants in the United States.”

Contending that the Department of Justice and U.S. Department of Agriculture
have taken a hands-off approach to consolidation in the food system, Food &
Water Watch calls for new rules that would (i) collect and report information
about food-chain concentration, (ii) coordinate a competition and antitrust
policy for the agribusiness sector from farm to fork, (iii) remedy and prevent
distortions in hog and cattle markets, and (iv) prevent unfair and deceptive
practices in agricultural contracting. Executive Director Wenonah Hauter
said, “The consolidation of the food and farm sector is sucking the economic
vitality out of rural America and shipping it off to Wall Street. These findings
shine a much-needed light on the negative economic impact that farm and
agribusiness monopolies have on farmers, consumers, and rural communities.”
See Food & Water Watch News Release, November 2, 2012.