The true cost of monopolies
Big Ag is harming all Americans, farmers and consumers alike, including the climate
I just wrapped up the fall board meeting with the Texas Farmers Union, where I serve as their Secretary. This week’s post includes some stories from TFU members and as a guide to what many of us family farmers/ranchers are facing.
Modern agriculture is a system that is designed to force family farms and ranches to fail. In the 1980’s, for every food dollar you spent at your local grocery store, a farmer would get about 40-50 cents.
But now, for every food dollar you spend at your grocery store, a farmer gets 14 cents — but once you also remove the costs of inputs, such as fertilizer, pesticides, and more, it can get down to 7 cents.
Take a look at this document from the National Farmers Union. It shows the prices of foods and how much the farmer receives. In some cases, the farmers' share is decent. In others, it’s laughable.
For some farmers, it’s even worse.
I talked to one cotton farmer from West Texas this weekend. He told me cotton prices had not risen for farmers since the 1950s. Think about that. Are prices for anything still the same as in the 50's? His costs for inputs and everything else certainly aren't.
It didn’t have to be this way, but a series of policy choices starting in the 70s and 80s led us down this road. It was in the 70s that the interests of big business started to take more control, then it was the Reagan Administration in the 80s that essentially ended anti-trust enforcement.
For the last nearly 40 years, they kept talking about the importance of an “efficient market.” What they don’t tell you is that, in this case, efficient means A) brittle, as we saw COVID broke our “efficient” supply chains, and B) more often than not monopolistic. Sustainable (environmentally and economically) and resilient should be the goal.
In more recent times, the Farm Bill, which Congress is 2 years late in passing, has not given farmers what they need. Think of the cotton farmer I mentioned. Cotton reference prices have not risen or been addressed in the Farm Bill in a long time. If the Farm Bill raised reference prices for cotton and other produce, farmers like him may start being able to pencil out (farm talk for making a profit).
Most family farmers and ranchers are not penciling out. In Texas alone, we lost over 17,700 family farms, averaging out about 9.7 farms a day, according to the 2022 Census of Agriculture.
Big Ag, on the other hand, is. In the last few years, Big Ag’s profits have tripled.
Monopolies are a major source of inflation. I personally would argue they are likely the number one source. Big Ag is so big they dictate prices, they determine who is in or out of business, they determine which chemicals are put into our foods, they disregard any sort of sustainability so they harm the climate, and their “lobbying” fuels the corruption seen in many aspects of our government, both state and federal.
It didn’t have to be this way. It can’t remain this way. This system has been failing us and will continue to fail us.
Thankfully, the tides are shifting. The Biden Administration is bringing back anti-trust enforcement, something no Administration has done since Reagan. They have stopped 12 agriculture mergers and are about to open an office in Chicago to handle even more cases. But it's going to take time. It's hard to undo 40 years of bad policy, and sadly, the Department of Justice's Anti-Trust Division has 200 fewer employees now than they did in the 70s.
This is why we must elect someone to continue this tradition of prosecuting these monopolies for their abuses against the American people, farmers, and consumers alike. I can only think of one candidate who fits the needs of the time; we must make sure she wins.