Recently, President Donald Trump announced that he had negotiated a deal with the Chinese government to benefit American farmers. As described, it would commit China to purchasing an additional 5 million tons of U.S. soybeans.
“That’s a tremendous purchase,” Trump said, “and our farmers are going to be very happy.”
But as is often the case with Trump, the truth is more complex.
Instead of new trade deals with China, what American farmers and consumers really need is a serious effort to reign in agribusiness corporations. And that effort must focus on heeding popular calls to enforce our country’s existing anti-trust laws.
Let’s be honest — everywhere you look, rural America is in crisis. Record bankruptcies have ravaged dairy farmers in the Midwest, while uncertainty in the market for soybeans has stirred concerns about the prospects for next year’s crop. Overall, farm incomes in 2018 reached a 12-year low. Forecasts for 2019 show marginal improvement, yet many farmers will still struggle to break even with their present levels of debt.
The reason trade deals with China will not improve farm incomes is that corporate retailers and processors take a disproportionate share of every food dollar. According to the National Farmers Union, U.S. ranchers and farmers average less than 15 cents of every dollar that consumers pay for their food. The lion’s share of the money is going to food retailers, processors and distributors.
To make matters worse, according to a study by Food and Water Watch, mega-retailers such as Walmart and Kroger compete over market share to increase their bottom lines, which in turn pushes down prices that food producers receive.
According to data compiled by the University of Missouri-Columbia in 2012, the four largest food and agriculture companies controlled 82 percent of the beef packing industry, 85 percent of soybean processing and 63 percent of pork. Such concentration drives up the prices farmers must pay for inputs, such as seeds, and forces them to accept lower prices for their produce due to the lack of buyers for their goods.
Farm incomes are not low because of China. Our farm crisis has its origins in the corporate control of agriculture.
What can be done about this situation? To start, the federal government can begin to enforce our anti-trust laws. Together, the Progressive Era Sherman, Clayton and Federal Trade Commission Acts were created to investigate and punish corporations for anti-competitive practices — such as mergers, price fixing and rigging contracts — that hurt small businesses and consumers.
Since the Reagan administration, however, the Justice Department has weakened enforcement of these laws and allowed companies to consolidate to an extent that has not been seen before. In agriculture particularly, the extensive list of out-of-court settlements between consumers and farmers with agribusiness entities indicate that corporations regularly abuse their power in the food system.
New trade deals will not improve American agriculture. The problem is that corporations dominate the food system at the expense of farmers and consumers. If family farming has a future in this country, then it must be through the hard work of fighting corporations and pressuring our officials to ensure that agribusiness elites stop abusing their power.
Anthony Pahnke (anthonypahnke.com) is vice president of Family Farm Defenders and an assistant professor of international relations at San Francisco State University in San Francisco.