Why Corporate Agriculture is a Problem

The industrialization of agriculture is often described as a necessary response to the challenge of feeding a growing and increasingly urban global population. But discussion of higher yields and more efficient distribution systems fails to acknowledge that this model of large-scale corporate agriculture is unsustainable over the medium- and long-term because it:

  • Concentrates market share among a small handful of firms, removing price discipline along the supply chain through vertical integration, resulting in uncompetitive markets that ultimately hurt consumers and producers alike
  • Creates environmental disaster through excessive pesticide use, soil erosion, genetic engineering, monoculture, and concentration of animal waste
  • Threatens the intellectual property rights of local producers through biopiracy and the patenting of indigenous crop varieties
  • Eliminates the livelihoods of small producers in the U.S. and developing countries, using government subsidies and monopoly power to price sustainable products out of the market
  • Jeopardizes food security and food sovereignty in developing countries
  • Endangers the public health of communities and consumers through food-borne diseases, chemical residues and the potential effects of irradiation
  • § Exploits migrant farmworkers whose labor rights are not protected, and uses their artificially cheap labor to undercut domestic small and medium producers
  • Destroys the fabric of rural communities
  • Empowers lobbyists to shape the U.S. farm policy in favor of large-scale agro-industry
  • Guarantees agribusiness privileged access to the negotiation of trade agreements and export credits which favor U.S. and European firms at the expense of producers in developing countries.

A standard measure of oligopoly power is when four firms together control more than 40% of the market share. In most major U.S. agricultural markets, this ratio is between 60-80%. This is found in beef and pork packing, poultry, flour and corn milling, and soybean crushing. Concentrated market share is on an upward trend, and the power of a handful of corporate agribusinesses in U.S. markets, combined with favorable trade rules, allows them to dominate international markets to the detriment of farmers and processing firms in the developing world. For agribusiness concentration information and statistics visit AAI's Market Share Matrix Working Group site.

The political and economic power of big agribusiness needs to be checked and balanced by responsive governments and civil society to create a socially, environmentally and democratically balanced food production and distribution system around the world. [back . . .]