Concentration in Agriculture Continues to Rise

This is a great article that helps to illustrate issues that truly affect family farmers. The USDA fails to enforce the anti-trust acts on the books that are supposed to protect the most vital part of our economy from control in the hands of a few. Now people might argue that it is against capitalism to protect the economy from concentration, but the truth is that it is impossible to have a healthy economy with excessive consolidation.

When access to market, seeds to plant, fertilizer to use, and prices received are all controlled, there IS no free market. Such is the case in the vast majority of agriculture. This scenario leads to the proliferation of biotech as they are the ones with the most money in their pockets and, as evidenced by the Monsanto Protection Act insertion into the Ag appropriations extension and Blunt admitting he “did it for Monsanto”, it should be clear that this topic is extremely important for our health and well being.

The “Missouri Monsanto Protection Act” will lead to even more concentration in this State. Representative Jason Smith, the sponsor of HJR 11 and 7, is insisting that the bill will save farmers from undo regulation at the hands of HSUS. However, the group that evidently pushed him to sponsor this tripe has some pretty obvious issues with their listed members. That group is Missouri Farmers Care. Not all of their members are in the column of the nasty and nefarious, but enough of them are that it certainly implicates the group as being a shill for the biotech industry while running under a deceptive title pretending they “care” about small family farms. Just have a look at their membership page.

Currently, Monsatan (Monsanto) owns the lion’s share of the global seed market. In the US, it is even more concentrated than in other nations. The question for the Missouri legislators (and Montana, Delaware, Indiana and Oklahoma, by the way) is who do they represent? Are they wholly owned subsidiaries of Monsanto, or do they represent the people? Their vote on this purported “Right to Farm” act will tell.

Without further adieu, here’s a look at the reality of concentration in the agricultural arena from the Daily Yonder:

With the rising concentration of companies that provide “inputs” for farmers — seeds, farm machinery, fertilizer — the prices for these goods have been rising faster than the cost of what farmers produce. Monsanto has a near monopoly on some kinds of seeds

Editor’s Note: One of the primary concerns of The Daily Yonder over the past six years has been the increasing concentration of businesses in the business of agriculture. Simply, fewer firms are providing us everything from fertilizer to groceries. 

Big business is getting bigger when it comes to growing our food.

Below is a summary of a recent report that looks at what this increasing concentration means for ag research and development. It was written by researchers at the Economic Research Service, an invaluable part of the U.S. Department of Agriculture.

To see the full report, go here

Since the 1990s, global market concentration (the share of global industry sales earned by the largest firms) has increased in the crop seed/biotechnology, agricultural chemical, animal health, animal breeding, and farm machinery industries – all of which invest heavily in agricultural research.

By 2009, the largest four firms in each of these industries accounted for at least 50 percent of global market sales. Market concentration was particularly high in animal genetics and breeding, where the four-firm concentration ratio reached 56 percent in 2006/07 (the latest year for which data are available).

Growth in global market concentration over 1994-2009 was most rapid in the crop seed industry, where the market share of the four largest firms more than doubled from 21 to 54 percent. The top eight firms in all five input sectors had between a 61 and 75 percent share of global market sales by 2009.

Firms increase their market share either by expanding their sales faster than the industry average or by acquiring or merging with other firms in the industry. Firms can expand their sales faster than others in the industry by offering better products or services (often an outgrowth of larger R&D investments), improving their marketing ability, or offering lower prices (often through economies of scale). The leading input firms in 2010 had faster sales growth than the industry average, but a significant amount of that growth came from acquisitions of other firms.

Reasons for Concentration

Reasons for mergers and acquisitions vary by industry and firm circumstances but include market forces and the emergence of new technologies. Government policies can also affect the ability of firms to compete in markets and their incentives to merge with or acquire other firms.

In the crop seed and animal breeding sectors, the emergence of biotechnology was a major driver of consolidation. Companies sought to acquire relevant technological capacities and serve larger markets to share the large fixed costs associated with meeting regulatory approval for new biotechnology innovations.

In the animal breeding sector, vertical integration in the poultry and livestock industries enabled some large firms to acquire capacity in animal breeding as part of their integrated structure.

In the farm machinery industry, many of the major mergers and acquisitions can be traced to large financial losses sustained by some leading firms during periods when the farm sector was in prolonged recession, which substantially reduced demand for farm machinery as farmers delayed major capital purchases. Firms experiencing large financial losses are often vulnerable to acquisition.

The agricultural chemical sector has been heavily affected by changes in government regulations governing the health, safety, and environmental impacts of new and existing pesticide formulations: larger firms appear better able to address these stricter regulatory requirements.

Consolidation in the animal health sector appears to be largely a byproduct of mergers and acquisitions in the pharmaceutical industry, as most of the leading animal health companies are subsidiaries of large pharmaceutical companies.(full article here)

Transparency on Proposed Constitutional Amendment HJR 11 and 7 in Missouri

Here is the chronological order of the conversation between Jason Smith, Republican for US Congress and current State Rep and Speaker Pro Tem in the Missouri House, and myself regarding HJR 11 and 7, the proposed Missouri Constitutional Amendment to “protect” agriculture.

This is transparency, folks. This issue will affect every single person who eats in this State, and it is entirely too important for both urban and rural Citizens to understand what is happening with this proposal.

I received a return phone call from Chief of Staff Ryan Hart after nearly two weeks awaiting a response from Smith’s office on concerns with this legislation. He sent me an attachment of the perfected bill on March 13th:

Be it resolved by the House of Representatives, the Senate concurring therein:

            That at the next general election to be held in the state of Missouri, on Tuesday next following the first Monday in November, 2014, or at a special election to be called by the governor for that purpose, there is hereby submitted to the qualified voters of this state, for adoption or rejection, the following amendment to article I of the Constitution of the state of Missouri:

            Section A. Article I, Constitution of Missouri, is amended by adding one new section, to be known as section 35, to read as follows:

            Section 35. That agriculture which provides food, energy, health benefits, and security is the foundation and stabilizing force of Missouri’s economy. To protect this vital sector of Missouri’s economy, the right of farmers and ranchers to engage in modern farming and ranching practices shall be forever guaranteed in this state. No state law shall be enacted which abridges the right of farmers and ranchers to employ agricultural technology and modern and traditional livestock production and ranching practices, unless enacted by the General Assembly.

            Section B. Pursuant to Chapter 116, RSMo, and other applicable constitutional provisions and laws of this state allowing the General Assembly to adopt ballot language for the submission of a joint resolution to the voters of this state, the official ballot title of the amendment proposed in Section A shall be as follows:

            “Shall the Missouri Constitution be amended to ensure:

            •          That the right of Missouri citizens to employ modern farming and ranching practices and equipment shall not be infringed”.

and I responded on March 14th:

Hello Ryan,

 Sorry it took so long for me to get back to you. Kidding season has a way of making things crazy around here!

 I understand that the desire is to make things better and to ensure that agriculture remains viable in Missouri. To truly ensure viability, we must stop the continued contraction of agricultural market access, and the ability of farmers to profit from their labor must be secured. There are several studies on consolidation that have been done Hendricks and Heffernan from Missouri U. It truly crosses all sectors of agriculture, both crops and animal agriculture. As it stands, the language in HJR 7 and 11 wouldn’t address that at all, and, unfortunately, would lead to further the spread of patented life forms, both animal and plant that will do even more damage to independent agriculture.

 Below is a proposal that would truly enhance the viability of Missouri agriculture and increase the economic freedom in rural areas and therefore help local economies to prosper and not ship their money straight out of the community to China via Walmart. Please let me know your thoughts on this. As I said, I have spoken with several property rights, agriculture, and economic freedom advocates, and a few legislators about this and rec’d very positive feedback.

 Section 35. That agriculture which provides food, energy, health benefits, and security is the foundation and stabilizing force of Missouri’s economy. To protect this vital sector of Missouri’s economy, the right of farmers and ranchers to engage in direct trade with consumers [modern farming and ranching practices] shall be forever guaranteed in this state. No law shall be enacted which abridges the right of farmers and ranchers to employ agricultural [technology and modern livestock production and ranching]practices that secure independent family farm’s ability to save seed, preserve livestock bloodlines, or impede their access to market.

Section B. Pursuant to Chapter 116, RSMo, and other applicable constitutional provisions and laws of this state allowing the General Assembly to adopt ballot language for the 3 submission of a joint resolution to the voters of this state, the official ballot title of the amendment proposed in Section A shall be as follows: “Shall the Missouri Constitution be amended to ensure: 

• That the right of Missouri citizens to employ modern farming and ranching practices and equipment that insure the continuance of diversified small farms shall not be infringed”.

 Thank you!

 Doreen Hannes

Then, on March 25th, Jason Smith responded to my March 14th email:

Dear Ms. Hannes,

Thank you for your email expressing your concern and taking the time to break down the bill, it is great to hear from such an informed citizen. HJR’s 11 and 7 are meant to protect agriculture in all forms, whether it is a small organic family farm or a large operation. The main goal of these resolutions is to make sure that our state’s largely diversified agriculture industry is protected from out-of-state interest groups that attempt to cause nothing but burden and harm.

The resolutions have also been amended to give more power to the county government. I am a firm believer in smaller government and have always found that the best solutions to a problem come from someone close to the problem. The following amendment was offered by Representative Reiboldt during the perfection of the bill. The amendment changed lines four through seven to read as follows.

No state law shall

5 be enacted which abridges the right of farmers and ranchers to employ agricultural

6 technology and modern and traditional livestock production and ranching practices, unless

7 enacted by the General Assembly.”

These changes in this amendment take the power for the state government to place restrictions on agriculture and give that authority to the counties. This allows farmers to be able to talk to their county commissioners instead of 163 representatives from all corners of the state of Missouri.

I would also like to point out that in line six; the resolutions provide protection for “modern and traditional” practices. This will protect your right, as a small family farmer, to always be able to use the practices that you prefer on your own operation.

I hope that this answers all of your questions and addresses your concerns. If you have any more questions about HJR’s 11 and 7, or Representative Reibolt’s amendment, please feel free to email them to me. I always enjoy hearing from and helping my constituents.

Sincerely, 

Jason Smith

Speaker Pro Tem

And, since I was busy and honestly rather angered by the response, I waited to respond until I wasn’t caught up in the moment as it were and responded this morning, March 28th….

Dear Jason,

 I was aware of the amendment and the perfected language, and to be completely honest with you, it cannot possibly do what you claim it will do. I’ll explain why I see it as I do.

 First of all, a Constitutional Amendment should be an inviolable right. To claim that no “state law” shall be enacted which infringes upon this “right” “unless” it is enacted by the General Assembly, seems an insult to the intelligence of the citizens of the state. ALL state law is enacted by the General Assembly. 

 Also, the County Commissioners don’t actually have the authority to enact “law” within the county. They can do resolutions, and approve of initiatives and go against initiatives, approve or disapprove planning and zoning issues, but they are largely involved with managing the infrastructure and financing of the county’s needs and overseeing the administration of the county. But they cannot make “law” with criminal repercussions for the violation of any law they pass. 

 Should this pass as a Constitutional amendment, the County that would constrain an aspect addressed in this Amendment would be in violation of the Missouri Constitution, and they would therefore be sued by an aggrieved party for violating the “rights” of a party interested in asserting their right to use “agricultural technology” within the confines of a County that was opposed to a particular technology.

 If you want to help farmers and ranchers to actually profit from their labor and remain viable, the way to truly help them is to cut the red tape between farmers and their consumers. There are plenty of studies that illustrate how destructive vertical integration and corporate farms are to both communities and independent agriculture. 

 If the verbiage you currently have as perfected language is what you are comfortable with and believe will meet your desired goals, then I must go completely against it and activate people against the language and against any progression of this proposal. The very last thing that we, as citizens of Missouri need, is to bless the biotech industries and corporate factory farms with the right to further consolidate. 

 I’d hoped that there was a chance to work with you to change the language from protecting the biotech industry which is deeply destructive to both consumers and farmers, but that doesn’t appear to be possible. 

 Thank you,

Doreen Hannes