Report: Ag concentration negatively affecting food supply chain
University of Missouri report shows concentration not helping feed people and is limiting opportunities for farmers.
Jacqui Fatka, Feedstuffs
Nov 19, 2020
Consequences of increased agribusiness concentration became very evident with the COVID-19 crisis, and a new report reveals shortfalls in the current system. The report outlines how concentration is a tool for corporations to maintain power and control rather than feed people.
Although agricultural productivity is on the rise, it doesn’t equal more food and less food industry, as nearly 23% of households faced insecurity, according to an August survey. “Essentially, the consolidated food system is not doing what it needs to do, which is feed people,” said Mary Hendrickson University of Missouri professor of rural sociology and author of a new report, “The Food System: Concentration & Its Impacts.”
An updated analysis of the current state of concentration shows that, in the U.S., the top four companies control 80% of soybean processing, 73% of beef processing and 67% of pork processing, and globally, the top four control 65% of agrochemicals, 58% of animal pharmaceuticals and 50% of seeds.
Crop acreage is consolidating in larger farms, while the sales midpoint for livestock has increased starkly between 1987 and 2017, the report notes. For hogs, the midpoint of sales has increased from 1,200 to 51,300, while for dairy, the herd size has gone from 80 to 1,300 cows.
Hendrickson expressed her concerns about the social and ecological impacts. Because farmers, workers and the environment are all interconnected, the global consolidated system ripples when a problem in one part quickly engulfs all the other parts.
“The distribution of power in the food system -- embodied in the power to make decisions about what food is produced, how, where and by whom, as well as who gets to eat and what they get to eat -- is our major focus of concern because of the negative impacts of those decisions to farmers, workers, communities and our ecology. Without a rebalancing of economic and political power within the global food system, humanity confronts a crisis over our very sustenance,” the report notes.
Some industries that were already highly concentrated decades ago, such as beef processing, have experienced ownership changes. This has resulted in two firms headquartered in Brazil – JBS and Marfrig – taking first and fourth place in market share, respectively. Cargill remains in third place for beef and soybean processing but sold its pork division to JBS in 2015 due to its inability to move up from a fourth-place position in this segment, according to some analysts. Similarly, Tyson sold its chicken divisions in Brazil and Mexico to JBS in 2014 rather than trying to compete in markets where JBS had strong government support. These changes contributed to JBS overtaking Tyson to become the world’s largest meat processor. Smithfield was once the largest processor in the pork segment for both the U.S. and the world, until it was acquired by WH Group in 2013 with backing from the government of China.
The interconnectedness of the protein sector revealed how worker vulnerabilities triggered by COVID-19 created crises in worker welfare, animal welfare and farmer livelihoods during the pandemic. By mid-April, nearly 20% of daily pork processing capacity had been idled by COVID-19, with similar problems in beef processing...
... Family Farm Action Alliance, in partnership with Open Markets Institute, released the report...
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