Seeding monopoly

Posted March 15, 2010

It made sense that the first USDA/Department of Justice workshop on competition in agriculture reserved a panel to focus on the beginning of the food chain: the seed industry. 

The panel at the March 12 workshop in Ankeny, Iowa zeroed in on Monsanto's control of the seed industry, primarily for corn and soybeans. The Justice Department has begun a preliminary investigation of Monsanto's practices in the soybean market. Seven state attorneys general are also investigating Monsanto's soybean pricing practices - where the company holds an estimated 93 percent market share, reports Bloomberg. Monsanto's practices were a common target at a Thursday night townhall forum in Ankeny that we blogged about last week.

For farmers at the workshop, rising seed prices and the lack of choices in the marketplace were the issue. Seed prices have risen some 146 percent since 1999, and 64 percent in just the last three years, according to a report by the Farmer to Farmer campaign. (For more on rising seed prices, see Dr. Charles Benbrook's comparison of organic and biotech seed premiums.)

Iowa grain farmer Eric Nelson told the 800 plus attendees that rising technology fees for biotech crops ate away any potential profits he might gain from increased yield. Nelson said he can get the same yield gains with conventional crops, and get a premium price. One of the main problems, according to Nelson, lies with current land grant research, which is funded by the big seed companies and not serving the greater public.

"We need to require that all germplasm be available to the public," said Nelson. "We need to look at the safety and wisdom of granting long-term patents on living things."

Not surprisingly, Monsanto VP Jim Tobin had a different view. Tobin argued that patents has attracted a great deal of innovation that wouldn't have occured otherwise. He said that innovation continues today - with a pipeline full of new products coming on the market. "There's a lot of choice today, they'll be a more choice in the future and tremendous competition for the farmer's needs," said Tobin.

The American Antitrust Institute's Diana Moss, who has written extensively on Monsanto's domination of the seed industry, was blunt in her analysis. She described the seed platform as essentially two markets, one for traits and another for traded seed.

"We've seen an increasing degree of vertical integration among these two markets," said Moss. "In the traits market, there is in effect a monopolist in Monsanto. In the downstream market, they give the illusion of choice."

Moss compared the seed industry to Microsoft's Windows operating system. You may buy a Dell or a HP or any number of computers - but they all have the same operating system. The result has been rising prices and less innovation.

The control of seeds goes to the heart of agriculture - both at the international and local level. While the USDA co-organized this workshop on Monsanto's control of the seed industry, earlier this month USDA Secretary Tom Vilsack touted efforts to gain greater acceptance of biotech seeds in other countries as part of the Administration's efforts to increase agricultural exports. And for those working to expand vegetable production targeting local markets in the U.S., keep in mind that Monsanto also owns Seminis, the world's largest vegetable seed company.

Scrutiny of the seed industry deserves much more than one panel at one workshop. The USDA and Department of Justice should add another workshop to their plans this year to focus exclusively on the seed industry.

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Notes from the agbiz concentration workshop: it's a national security issue

Posted March 12, 2010

Does competition matter in agriculture? The Department of Justice, the Department of Agriculture and 800 plus others felt it was important enough to gather in Ankeny, Iowa today for the first ever workshop on competition in agriculture.

Coming into the meeting, it was an open question about whether the series of workshops planned this year would be more theater than a basis for action. Attorney General Eric Holder's appearance, along with USDA Secretary Tom Vilsack, tried to answer some of those questions. Vilsack talked about his deep concern for the future of rural America, and whether the benefits of efficiency that we supposedly gain from fewer, big companies dominating agriculture has come at the expense of farmers and rural communities. Holder emphasized that economic competition is a national security issue.

 "If this country doesn't have a functioning agriculture sector, that is a national security issue," said Holder "We've learned the hard way in the past few years how the effects of deregulation can result in harm.".

Christine Varney, Assistant Attorney General for Antitrust, got everyone's attention when she talked about the agency's criminal authority. In her remarks she highlighted common themes that would be repeated throughout the day: a need for greater market/price transparency and the use of patents to create excess market power. As an example of Justice's newfound commitment toward agriculture competition, she pointed to recent DOJ efforts to blog mergers - one that included Dean Foods, another involving JBS and National Beef.

"Big is not bad, but with being big comes an awful lot of responsbility," said Varney.

In the next blog, we'll look more at what was said about competition in the U.S. seed industry.

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<a name="agbiz"></a>Call to "Bust Up Big Ag"

Posted March 12, 2010

"It is a lie that we have a free market. It's a lie that we have an open market. It's a market controlled by corporations." This remark from an Iowa farmer last night captured the fiery sentiment at a townhall meeting of over 250 people, packed into a room at the Best Western in Ankeny, Iowa.

The townhall was held on the eve of the first ever U.S. government workshop on competition in agriculture, that will start in a few minutes. The joint USDA/Department of Justice workshop is the start of a series of similar events to be held around the country this year. The room last night was full of farmers from the region, local Iowans and the bright yellow shirts of United Food and Commercial Workers Union (UFCW) members from surrounding meatpacking areas.

Barb Kalbach, a fourth-generation farmer from Dexter, Iowa and part of Iowa Citizens for Community Improvement (ICCI), kicked off the meeting: "We’re here today to make sure the voices of everyday people are heard loud and clear. And that message is: 'bust up big ag.' A handful of multinationals have run roughshod for too long. Antitrust laws have not been enforced. We want action now and we expect the government to represent the people and the common good.”

The concentration of the seed industry and excessive use of patents took center stage with many of the comments - with Monsanto a common target.  "The only thing they haven’t done is put a patent on air and charge us for breathing it," said one farmer from Iowa.

"This monopolistic system is rigged against family farmers," George Naylor, a corn and soybean farmer from Churdan, Iowa and also part of ICCI, told the crowd. "This casino economy is rigged so farmers don’t have much of a choice of the seeds that they buy. Monsanto has intentionally bought up seed companies to eliminate competition."

Todd Leake, a wheat and soybean farmer from North Dakota told the crowd, "If anything belongs in the public domain, it’s the crops we grow for food."

Many also focused on the livestock and poultry industry. Rhonda Perry, a livestock farmer from Armstrong, Missouri and part of the Missouri Rural Crisis Center, said, "A handful of meatpackers and poultry companies completely dominate the entire livestock industry.The big corporations say that they are more efficient. The reality is that they don’t have to be more efficient – they just have to control the market. It’s not good for farmers or consumers."

UFCW's Mark Lauritsen talked about growing up in a meatpacking family in Iowa during the farm crisis in the 1980s. " I saw the pain in the face of farmers – and I saw the meatpacking plants closed, and wages lowered for those that stayed open. Fewer and fewer corporations are controlling the food industry. The Justice Department needs to be pushed to include the impact of concentration on workers, family farmers and the communities we live in."

IATP's Alexandra Spieldoch talked about how farmers in the U.S., Mexico and Canada all were facing a simlar squeeze from a few big companies that now dominate the North American market. You can read our fact sheet we prepared for the meeting, as well as watch a short video of Alexandra summarizing IATP's comment to the USDA and DOJ.

Patty Lovera of Food and Water Watch, summarized the sense of people in the room as they await Friday's workshop: "Games have rules, they have referees. The government is our referee – it’s time for the referee to get back in the game."

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NAFTA and agribusiness concentration

Posted March 11, 2010

Tomorrow, the U.S. Department of Agriculture and the Department of Justice will host the first ever workshops on competition issues in agriculture in Ankeny, Iowa. A new IATP fact sheet looks at the role of the North American Free Trade Agreement (NAFTA) in accelerating agribusiness concentration. It includes short testimonies from farm groups in Mexico, Canada and the U.S.

“NAFTA opened the door to create one large, and increasingly concentrated, North American market for big agribusiness companies,” said IATP’s Alexandra Spieldoch. “Farmers in all three countries have been squeezed by a handful of companies. As the Justice Department and the USDA assess competition in agriculture, it is imperative that they consider the international impacts of corporate concentration and reforms needed to create fair markets. Competition reform cannot be viewed exclusively as a domestic issue.”

You can read the full fact sheet here.

You can read IATP’s comment to the USDA and Justice Department on the need to address corporate competition in agriculture here:

IATP will be blogging from Iowa later today and tomorrow on the outcomes of the workshop.

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Gearing up for agribusiness concentration workshops

Posted March 10, 2010

For those who feel that the excessive market power of agribusiness companies is a big part of what's wrong with our food system: it's on. And it's historic. For the first time, the U.S. Department of Agriculture and the Department of Justice will hold a series of public workshops on market competition in agriculture. The series kicks off on Friday in Ankeny, Iowa. IATP will be there blogging away on all the highlights.

Earlier today, the final agenda and speakers were announced including USDA head Tom Vilsack, Attorney General Eric Holder, some state attorneys general, academics and company representatives like Monsanto. A first round of the agenda included only a few farmers, and fortunately, they've added an extra session to include more farmer voices.

The official goal of the workshop is to "promote dialogue among interested parties and foster learning with respect to the appropriate legal and economic analyses of these issues, as well as to listen to and learn from parties with experience in the agriculture sector."

But many farmers and consumers concerned about the effects of market concentration on our agriculture economy, our health and the environment believe much more is needed than "dialogue." Along those lines, IATP and many others will be at a Thursday night event hosted by Iowa Citizens for Community Improvement titled Unleash Food Democracy: Taking on Corporate Power in our Food Supply. We'll be in Iowa tomorrow, reporting more on the first agribusiness competition workshop.


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Farm to school numbers up—and rising

Posted March 9, 2010

A new survey, released today by the Minnesota School Nutrition Association (MSNA) and IATP, can serve as both encouragement for farm to school advocates and as a road map for schools, administrators or farmers looking to get involved in the growing movement. According to the survey, the number of Minnesota school districts purchasing fresh food from local farms has more than doubled in the last 15 months. Even more encouraging is the fact that 77 percent of the districts currently involved in farm to school indicated that they expect to expand their farm to school activities in the upcoming school year.

“Parents, students and educators know that good nutrition is essential if our kids are to be healthy and ready to learn. Small and mid-size farmers, whose products have largely been absent from America’s lunch trays, can offer our children fresh, less-processed choices and a chance to learn how and where their food is grown,” said IATP’s JoAnne Berkenkamp. “The momentum is rapidly building for farm to school programs and it’s great to see schools and farmers embracing this opportunity.”

Some other highlights of the survey include:

  • Nearly 43 percent of school districts purchasing Minnesota-grown food in 2009 did so by purchasing directly from a farmer or farmer co-op.
  • The biggest barriers to expanding farm to school purchases were the need for extra labor and preparation time in the cafeteria, pricing and tight food budgets, and difficulty finding nearby farmers to purchase from directly.
  • In the future, schools are most interested in purchasing local vegetables and fruit, with growing interest in bread/grains, dairy and meat.
  • The survey also showed strong interest in expanding student education about farm to school and growing food in school gardens.

See the entire survey or take a look at our press release for further information. Also, listen to our newest episode of Radio Sustain for an interview with JoAnne Berkenkamp.

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Follow-up on cheap food policy

Posted March 8, 2010

Last week, we wrote about the lastest issue of Health Affairs, which zeroes in strategies for addressing childhood obesity. The issue includes a chapter by IATP's Dr. David Wallinga on the connection between agriculture policy and childhood obesity. Health Affairs recorded the lengthy press conference at the National Press Club with authors of the special childhood obesity issue. You can watch short video presentations from some of the authors, including Dr. Wallinga, here.

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Farms in the balance: Countering attacks against EPA on climate

Posted March 3, 2010

Attacks on the EPA have been coming fast and furious in the past few months. In contrast to Congress’s limp attempts to pass comprehensive climate legislation, the EPA has begun taking steps to address climate change. Most significantly, the agency declared greenhouse gases (GHGs) an “endangerment” to public health last year—a finding that enables the EPA to regulate GHGs under the Clean Air Act. That hasn’t sat well with those opposed to climate action.

In January, Sen. Lisa Murkowski (R-AK) introduced a “resolution of disapproval” in the Senate that would kill the EPA’s ability to regulate GHGs. Although the resolution’s viability is unlikely, if passed it would require Obama’s signature, setting a disturbing precedent. The EPA decision was based on science. Murkowski’s resolution is pure politics. Congress shouldn’t have the authority to usurp science just because it doesn’t like the outcome.

Murkowski’s resolution has created something of a snowball effect. Rep. Collin Peterson (D-MN), chair of the House Agriculture Committee, introduced a copycat resolution in the House earlier this week, no doubt pleasing mightily his supporters in the Farm Bureau, National Corn Growers’ Association and other conventional agriculture groups who have come out strongly in favor of Murkowski’s resolution.

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Childhood obesity and our cheap food policy

Posted March 2, 2010

Cover The latest issue of the influential Health Affairs journal comes out blazing with editor-in-chief Susan Dentzer writing that “America is guilty of child abuse.” The March issue focuses on childhood obesity and includes a series of articles related to kid's snacks, school lunches, food marketing and strategies for prevention.

IATP's David Wallinga contributes the article “Agricultural Policy and Childhood Obesity.” The article traces the role of U.S. agricultural policy in promoting the overproduction of certain farm commodities like corn and soybeans. These cheap commodities have been converted into calorie-rich but nutrient-poor snacks, sweets and sweetened beverages that have led to an excess of daily calories for all Americans, children and adults alike.

"As a nation, we must understand that farm policy is public health policy," said Dr. Wallinga in our press release. "We need to transition from a cheap calorie farm policy to one that nourishes our children's health. It's going to take steps across the food system and at every level of government to not only bend the curve on the obesity epidemic, but to reverse it."

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What's so radical about family farming?

Posted March 1, 2010

In mid-February, the third Farmers' Forum was held just prior to the 33rd Governing Council meeting of the International Fund for Agricultural Development (IFAD) in Rome. IFAD is a specialized agency of the UN that funds agriculture production projects in developing countries. The forum brought together 70 representatives of farmer organizations from around the world, representing tens of millions of farmers. IATP was unable to participate due to the tight meeting quota, but the forum's statement and the IFAD president's statement merit comment, if only because they seem at odds with trends in U.S. agriculture, at least at first glance.

The forum's “synthesis of deliberations” noted first how the economic crisis had increased global rural poverty and hunger. Furthermore, “We are witnessing all over the world an increasing competition for land and water, with rising land concentration and large-scale land acquisition by transnational corporations and local elites. These practices result in exclusion of people from land and water resources, the fundamental resources on which we rely as food producers.” In response, the forum called for a return of control over agriculture to family farmers and for a United Nations International Year of the Family Farming. This call may seem out of touch with the statistical reality of U.S. farming and with an increasing concentration of market share of agricultural input production, agri-processing and food retailing that has prompted the U.S. Department of Agriculture and Department of Justice to initiate hearings in anti-competitive agribusiness practices.

In the United States, the February updating of the U.S. Department of Agriculture's latest (2007) census shows an unremitting concentration of agricultural resources into an ever-smaller number of ever-larger industrialized raw materials production facilities, which the USDA describes as “very large family farms.” Nine percent of the estimated 2.2 million U.S. farms produce about 63 percent of the total value of all U.S. agricultural production. However, USDA reports that the growth in new farms and new farmers since 2003 is occurring on farms averaging about 200 acres in size and $71,000 in annual sales. Such sales are not enough to support full time employment in farming, so two-thirds of these farmers do not report farming as their primary occupation. For these U.S. farmers and for the declining number of mid-size family farms reported in the census, the Farmers' Forum statement on farmer control of agricultural production may be something they would like to see implemented by USDA.

For those agribusinesses and their government supporters who often state that they “feed the world,” the forum statement might sound downright revolutionary. And yet, as noted by IFAD's president Kanayo Nwanze, about 500 million small land holders provide 80 percent of food consumed in the developing world. IFAD's budget for assisting farmers in developing countries is very modest compared to that of USDA. The forum's demands are correspondingly modest, but very much directed towards establishing farmer control over agriculture through advocating participation in the design and implementation of IFAD projects. The marginalization of farmers from agricultural planning in favor of corporate and central government official control is not the kind of partnership that the forum wants farmers to be involved with in IFAD. Rather than appending the Farmers' Forum to IFAD annual meetings in Rome, the Forum statement proposes to integrate forum participation in all IFAD regional meetings.

Furthermore, nearly half of the forum statement is dedicated to the disparity between the many responsibilities of women in farming as providers of household food security and the paucity of technical and financial resources for them to carry out those responsibilities. President Nwanze gave a special welcome to the 40 percent of the 2010 forum participants who are women and remarked that only nine percent of 2006 Forum participants were women. As women continue to be denied the resources afforded to exporting farms, the forum statement notes “our sons and daughters do not wish to be farmers and continue to migrate to urban areas. This raises a critical question: How can the profitability and sustainability of farming be secured so as to ensure a future for the next generation of women and men farmers?” This question, though formulated in the context of IFAD's developing country members, is surely not foreign to U.S. family farm households.

If IFAD's members agree to a 67 percent budget increase over the next three years, President Nwanze said that the resulting annual $1 billion budget would be able to improve the livelihoods of about 60 million rural people. Programs would be targeted to involve rural youth in farming and to support the women farmers who globally produce about 60 percent of all food crops in developing countries. The role of small land holding farmers in climate change mitigation and adaptation would be another program focus.

Despite the differences between the size and sales of U.S. and developing country farms, and the differences between U.S. government and IFAD budgets, few, if any, of the concerns in the forum and IFAD presidential statements should be foreign to U.S. farmers.

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