May 2, 2000 / The Associated Press
HARLAN, Iowa -- Depending on one's point of view, the agricultural practice of "bundling" is, according to this story, either the equivalent of one-stop shopping for farmers or another step toward consolidation.
Farm Service Cooperative in Harlan, Iowa, for instance, offers package deals on seed and fertilizer to the growers, who also earn premiums for their crops. The story says farmers save money up front and earn more in the fall.
The cooperative sells more product per transaction, and the buyers of the crops get the commodities they need. Many farmers and agricultural companies like the trend because it streamlines sales transactions and generates savings and boosts income for farmers and suppliers.
Dave Knau, director of sales support for Pioneer Hi-Bred International Inc., was quoted as saying, "Every piece of a bundle has to add value, or the farmer will take it apart. Why wouldn't he? ... It's simple economics and the farmer drives it."
But bundling is, the story adds, drawing criticism from opponents to consolidation in agriculture -- a hot button issue in rural communities across the country. Critics contend bundling is yet one more step toward a food system controlled by a few large corporations.
Some, including Neil Harl, an Iowa State University economist, believe the practice will encourage development of monopolies. Harl equates it to buying a new Ford car and having to buy oil and other automotive supplies from the automaker.
Larry Kallem, executive director of the Iowa Institute for Cooperatives, said as long as there is competition for the goods or services being bundled, monopoly power is not an issue.:
