Is It Time to Break Up Big Ag?

In the spring of 2020, Dairy Farmers of America, the nation’s largest dairy coöperative, bought Dean Foods, the nation’s largest milk processor, for 4 hundred and thirty-three million {dollars}. D.F.A. shaped in 1998, out of a merger of 4 regional co-ops. Last yr, its members, greater than twelve thousand dairy farmers, bought fifty-six billion kilos of milk, about twenty-five per cent of the nation’s whole, and the group as an entire introduced in almost eighteen billion {dollars} in income. With the acquisition of Dean, D.F.A. gained unprecedented energy as each a milk provider and purchaser. Pete Hardin, the editor and writer of the dairy commerce journal The Milkweed, informed me, “It’s the poster child for agricultural concentration—and what Big Ag has become.”

For years, D.F.A. members and nonmembers alike have complained in regards to the co-op’s rising market energy. “The only reason I’m with D.F.A. is there’s no other place to go,” a dairy farmer from the Ozarks, who requested to stay nameless, informed me. “They have a ten-year exclusive contract with all the bottling plants within probably three hundred miles.” In different phrases, D.F.A. is the one out there purchaser of his milk. An enterprise with a single purchaser, referred to as a monopsony, sometimes means decrease costs for producers. He added that, when he began farming, within the early seventies, there have been a dozen native crops that he may promote his milk to. “Over time, they kept getting squeezed out,” he mentioned. “I’m set in steel now for ten years.”

Nationally, the 4 largest dairy co-ops now management greater than fifty per cent of the market. They’ve been in a position to develop so huge, partly, due to a 1922 regulation referred to as the Capper-Volstead Act, which offers vital exemptions from antitrust legal guidelines for farmer-owned agricultural coöperatives. “The agricultural industry is different than other industries because Capper-Volstead allows them to combine in ways that other individuals would go to jail for,” Allee A. Ramadhan, a former Justice Department antitrust lawyer who led an investigation into the dairy {industry}, informed me.

The regulation’s protections had been supposed to give small, impartial farmers the appropriate to collectively discount costs for processing and promoting their items, however many giant co-ops, resembling D.F.A., have more and more come to resemble firms. D.F.A. has dozens of associates and joint ventures, however in accordance to its most up-to-date monetary report solely a couple of quarter of the co-op’s earnings had been paid immediately to its farmer-members. And, in contrast to publicly traded firms, D.F.A. shouldn’t be required to reveal how a lot its executives earn. Kristen Coady, a senior vice-president for D.F.A., informed me that “out of respect for privacy” the co-op wouldn’t disclose any wage or compensation info for any of its workers. But, a number of years in the past, the Times reported that Gary Hanman, D.F.A’s founder, had entry to a non-public jet and earned thirty-one million {dollars} throughout the seven years that he was the co-op’s C.E.O. In 2017, D.F.A. moved into a brand new thirty-million-dollar headquarters, which features a twenty-five-foot-tall sculpture of milk, bocce and basketball courts, and a health middle. “Where does the money go?” Peter Carstensen, a former Justice Department antitrust lawyer and dairy-industry professional, mentioned. “There is no transparency with co-ops like D.F.A. It’s about as opaque as you can get.”

Meanwhile, D.F.A. has paid out giant sums in fines and class-action lawsuits introduced by its personal members. In 2008, Hanman, D.F.A., and one other D.F.A. government agreed to pay twelve million {dollars} in fines for trying to manipulate milk costs on the Chicago Mercantile Exchange. Five years later, D.F.A. paid a hundred-and-forty-million-dollar settlement for allegedly fixing milk costs within the Southeast. In 2016, it paid fifty million {dollars} to a bunch of members who alleged that the co-op was in an unlawful conspiracy to restrain competitors, repair and suppress costs, and management the shopping for and promoting of uncooked milk within the Northeast; final yr, it settled one other lawsuit, for an undisclosed sum, with a separate group of Northeastern dairy farmers. Buying processors resembling Dean, which profit from paying farmers decrease costs for milk, D.F.A.’s critics argued, created a battle of curiosity. Einer Elhauge, a professor at Harvard Law School, testified that the alleged conspiracy in that case introduced down costs by almost eighty cents per hundred kilos of milk for all of the dairy farmers within the area, and never solely D.F.A. members. (As a part of every settlement, D.F.A. denied any wrongdoing.) “D.F.A. was so powerful in the industry, no matter where you turned you were dealing with it,” Ramadhan informed me. “Where they were present, there were complaints.”

The accelerating focus of the agricultural economic system shouldn’t be confined to dairy. Since 1982, the 4 largest beef-packing corporations went from controlling about forty per cent of the market to controlling greater than eighty per cent. The 4 largest seed producers elevated their market share from twenty-one per cent in 1994 to sixty-six per cent in 2018. As a outcome, farmers are paying extra for inputs—seeds, fertilizers—whereas promoting their items for decrease costs and to fewer aggressive patrons. “It’s as if farmers have become serfs again,” John Peck, the chief director of the nonprofit Family Farm Defenders, mentioned. “They have no independence left, no autonomy—they’re owned by the lord.”

The pandemic has uncovered the fragility of America’s consolidated food-supply chain. In April of final yr, as eating places and faculties had been compelled to shut abruptly, D.F.A. requested a few of its farmers to dump their milk, leading to thousands and thousands of gallons being poured into manure lagoons. The sudden closure of slaughterhouses compelled farmers to euthanize tons of of hundreds of pigs. And the cruelty was not restricted to animals. Last spring, in accordance to the Centers for Disease Control and Prevention, meatpacking crops had been liable for between six to eight per cent of all COVID-19 infections within the United States; at a Tyson pork-processing plant in Waterloo, Iowa, managers positioned bets on what number of employees would contract the illness.

Curt Meine, an environmental historian on the University of Wisconsin, Madison, believes that this transformation has impressed a political backlash. In the final election, Donald Trump gained rural America by a higher margin than he did in 2016, capturing almost two-thirds of its vote. “Concentration fed and fuelled the politics of resentment, entrenched corporate power, depopulated the landscape, and weakened the autonomy and agency of farmers, consumers, local governments, and communities,” Meine mentioned. “I think this is at the very heart of the rural-urban political divide.”

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