FREEDOM OF CHOICE? The 2007 Farm Bill may offer real variety for consumers
A note from Deborah:
A friend of mine, Lisa Sedlar from New Seasons Market, once told me that 75% of the top 100 U.S. markets are controlled by five grocery companies. Each of these companies has a Director of Produce doing all their buying.
While talking to me, Lisa paused for effect and went on to underscore her point: “That means that five guys (and they are all guys) are deciding where most of the produce in this country comes from!”
That doesn’t seem right! I was reminded of this exchange with Lisa after reading the following article in the last issue of Edible Portland.
Freedom of Choice?
Written by Aimee Witteman
For Summer 2007
IF ASKED TO USE ONE WORD to describe the U.S. food system, my bet is that many Americans would say “Choice.” The aisles and aisles of products in most American supermarkets make our choices as consumers not only appear abundant, compared to many other countries in the world, they seem practically limitless.
But do these supersized supermarkets and scores of new products within their big box walls really represent an expansion of choice in the marketplace?
Let’s pull back the curtain and see what is really going on. I submit that we should not conflate the sheer abundance of products with: a diversity of food companies in the market; our welfare as consumers; or the notion that our food system is on a healthy path. Yes, you may be able to choose from 20 different flavors of canned spaghetti sauce, but consumers’ power to choose what company they can buy from and what supermarket they can shop in, or farmers’ choice of who they can sell to, has shrunken considerably in the last decade.
Understanding this dynamic is essential to addressing many economic, social, and environmental problems facing today’s food system.
In the last several years there has been rapid market consolidation in the food processing, marketing, and retailing sectors. There has been a “merger madness” with firms at each link of the supply chain that runs between farmers and consumers, buying out or being bought out by their competitors.
Analysts at The Oakland Institute have identified Wal-Mart’s rise to becoming the largest food retailer in the country as the most prominent catalyst behind this increasing consolidation. In an effort to shore up bargaining power to negotiate for shelf space at Wal-Mart, processing and marketing companies have been forced to get big or get out. During its merger with IBP, the president of Tyson Foods defended the merger by saying it should “give us 100 extra feet of shelf space at Wal-Mart.”
To help people conceptualize the shrinking number of firms in each of these sectors of the food supply chain, researchers have offered the image of an hourglass. If one imagines one side of the hourglass representing producers and the other side consumers, the narrow midsection represents the small number of huge companies through which farm products pass to get from farmgate to dinner plate. In many cases so few firms control so much of the market today, their power meets the criteria economists use to qualify something as an oligopoly or oligopsony (essentially a monopoly of a few companies).
So why should we care that this is happening? Isn’t this a natural evolution of a capitalist system? A sign that some companies are more effective or more efficient than others? Besides, we still have 45,000 items to choose from in the grocery store down the street—we’ve never had so much consumer choice.
It is important to understand that this rise in market power is not the inevitable outcome of a free market—it is the direct result of policies at the local, state, and federal levels that have used your taxpayer money to privilege the interests of large companies. Also, while the oft-heard justification for this consolidation is that it results in greater efficiency and
“low, low prices,” the truth is that the retail price for dairy, meat, and produce has gone up while the farm value of these products has fallen.
So what can we do about this? There are some tools we can use to leverage a departure from the unhealthy and uncompetitive direction we are heading. At the federal level the 2007 Farm Bill is a critical opportunity to create a Competition Title—a set of policies that would address the causes and impacts of market consolidation specifically in the livestock and poultry sectors. A Competition Title would essentially do three things:
1) diminish the power of the dominant food companies through steps that affect the structure of the industry,
2) increase the power of producers through collective bargaining, and
3) improve the enforcement of existing agricultural anti-trust laws.
In addition, support for policies such as the Farmers’ Market Promotion Program will direct federal money away from corporate welfare towards real farmers supporting consumers with fresh, local foods.
Now is the time to demand measures in the 2007 Farm Bill that will take us closer to winning back our freedom of choice, innovation, and independence in the market. For information on these policies and ways to get involved, visit the Sustainable Agriculture Coalition’s Farm Bill Action Center: www.sustainableagriculturecoalition.org.
Aimee Witteman is the Grassroots Organizing and Outreach Coordinator for the Sustainable Agriculture Coalition and a WK Kellogg Foundation Food and Society Policy Fellow.
Read more about the Farm Bill in Dan Imhoff's story published in the Spring 2007 issue of Edible Portland: Food Fight 2007: A Citizen's Guide.
