Maybe bigger isn't better

Since I've been coming across some interesting stories in the news lately, I figured I'd share them with you here on the Windfall blog.

Listen to the story
Small Farmers See Promise In Obama's Plans
from NPR's-Morning Edition

August 20, 2009

Since the 1980s, American agriculture has become increasingly concentrated. Today, less than 2 percent of farms account for half of all agricultural sales. The new antitrust division of President Obama's Justice Department has said that scrutinizing monopolies in agriculture is a top priority.

That shift is giving hope to independent farmers, who have complained for years that agriculture giants are shrinking the marketplace and paying farmers less for their products.

Farmers Welcome A Change

Earlier this month, the Justice Department sent out a news release that received virtually no attention outside the agriculture-centered press.

Starting next year, the Justice and Agriculture departments will hold public workshops in farm towns throughout the United States to learn about anti-competitive conduct in agricultural markets.

The announcement came one day before the annual convention of the Organization for Competitive Markets. The next day, many among the 150 people gathered at a St. Louis hotel for a session — titled "Confronting the Threats to Market Competition" — could not believe what they were hearing.

Small but influential, the nonprofit, nonpartisan group is made up of farmers, academics and others concerned about the gigantification of American agriculture. Its executive director is Fred Stokes, a Mississippi rancher and registered Republican who has been leading the charge for the government to intervene.

"We want to stop this rubber-stamping of every ag merger that comes down the pike," Stokes said. "We want to call in the predators that are putting our farmers and ranchers out of business. We want them to do their job."

Agriculture's Top Cop Speaks

At the conference, the speaker everyone was eager to hear was Phil Weiser, deputy assistant attorney general. He's the "top cop" overseeing Big Agriculture, after being selected by Christine Varney, new head of the antitrust division.

"We recognize this is a very important sector," Weiser said. "This is something that Christine Varney has placed a huge emphasis on. And we need to learn more about it."

It's not the sexiest quote. But just the fact that Weiser came to deliver his first speech since getting his new job to a group of farmers and activists was seen as a break from the Bush administration.

Seeing A Problem: Consolidation

Frustrated farmers claim the operative philosophy of President Bush's antitrust division was, "Let's make a deal."

After some tweaking, the agency approved mergers between Dean Co. and Suiza Corp. to create the nation's largest milk processor; between Smithfield Foods and Premium Standard Farms to create the largest hog processor; and between JBS and Smithfield Beef to make one of the nation's largest cattle feeders.

David Balto, a longtime public-interest antitrust lawyer, says it's hard for people to understand how unprecedented the upcoming joint Justice/Agriculture hearings are going to be.

"Typically, antitrust enforcers sit at their desk and wait till the phone rings, and then decide whether or not to open an investigation," Balto said.

"[Weiser's] saying, 'We're going out there into the areas and meet face to face with farmers,'" Balto said, "and I think they'll get a much more profound understanding of why farmers are being egregiously harmed by the lack of antitrust enforcement."

Seeing A Threat To A Lifestyle

The antitrust enforcers will likely hear from people like Don Quamby, a hog farmer from Wellsville, Mo.

"With the hogs, it's gotten to be where you can't make any money anymore raising them, because the packers own everything," Quamby said.

He said he came to the recent meeting because he's deeply concerned about the death of independent hog farms.

"It used to be you had several different markets that you'd go to in our area, several different buyers," Quamby said. "Now we don't have that."

Asked why consumers should care about the change, Quamby said, "Well, because once the packer owns all the market, they can charge whatever price they want then at the consumer level, once the meat gets to the store."

In agriculture, economic orthodoxy holds that bigger is better. The bigger a food processor or seed company is, the more they can afford for research and development. An economy of scale creates efficiencies that generally mean lower consumer prices.

But that certainly wasn't the sentiment in the hallway outside the meeting room, where farmers wearing plaid shirts and seed caps drank coffee and talked about challenges to their way of life.

"I've got grandsons — 10, 8 and 6," said Jim Foster, who farms in Montgomery City, Mo., "and their ability to raise hogs like I did, as an independent, depends on whether these guys do their job or not."

Government Plans

The Justice Department lawyer told the group that the antitrust division plans to take a hard look at three areas of agriculture.

The first is seed companies. The American Antitrust Institute asserts that in some markets, Monsanto controls 90 percent of the technology behind genetically modified seeds for cotton, corn and soybeans; Monsanto disputes that figure.

The second segment is beef packing. And the third is dairy, where consolidation has been especially dramatic. In the last decade, more than 4,500 dairy farms disappeared every year.

The decline, critics claim, is at least partly the result of collusive and exclusionary tactics by Big Milk.

“Who controls the seed gains a substantial measure of control over the shape of the entire food system.”

Here's a good short article about the behavior of life-science companies around seed patents. Its the direction food production is going in. It will take a lot of hard work and organizing to combat the behaviors of companies like Monsanto and the Federal government, that protects their interest. First check it out and see if there's anything you didn't already know.

From Daily Yonder

During a recession, with most prices stable, Monsanto raises the cost of its soybean seed by as much as 42%. That tells you a little about how things work in the food business.

By Richard Oswald

Things aren't always as they appear, especially in the production of food.

Aesop, the ancient Greek story teller, told a fable about a farmer who found a stork along with a host of other birds eating seeds from his newly planted field. The stork tried to persuade the farmer that he was still the farmer’s friend even though he was living at the farmer’s expense.

Aesop summed it up with the observation that the stork was no better than the other birds: Birds of a feather flock together.

Thanks to modern farm equipment, seed placement has been improved so that about the only fowl eating my seed dollars these days are a few locally grown wild turkeys… and some corporate hawks from St Louis.

“Farmers are our friends” was the response from Monsanto spokesman Lee Quarles following last week’s meeting held by Organization for Competitive Markets in St Louis, where the issue of agricultural market concentration drew the attention of farmers and government regulators.

Since then, Monsanto announced that seed prices are going up again, based on demand. Of course, anytime someone controls most of a market, demand is always good for them.

Monsanto said that seed prices are headed to about $74 for an acre of Roundup Ready 2 soybeans, a price hike of as much as 42 percent. (Monsanto explains it’s really not that much.)

I have a good mind to do what I did in 1989 when commercial seed costs were only $10 per acre. It was cheaper even then just to take a few dollars worth of seed from my own bin and save about three dollars per acre. Today if I did that, I’d save a whopping $64 an acre.

Don’t tell Monsanto my plan, however, because the company pays detectives to spy on farmer friends who might be tempted to plant home-grown grain as seed.

It is illegal to plant the seed that grows as grain on my own farm. The catch is that even though I may not want the Monsanto genes, if they find their way into my crop from bird droppings or wind or some other act of nature the courts say I’m guilty just the same. These days it’s virtually impossible to guarantee that any crop isn’t contaminated with patented genes. If Monsanto’s detectives catch me transferring seed from granary to planter, I’ll be sued.

Speaking to a group of farmers in Missouri near Mark Twain Lake a couple of years ago, a farmer from Indiana, Troy Roush, said that when Monsanto sued him they took samples of Roundup Ready soybeans in his neighbor's field and claimed they were his. Troy Roush

Troy was damned if he did, and damned if he didn’t’

Before seed patents, I had a choice between buying seed or using my own. Today I have no choice at all. I simply have to pay what seed companies ask. If I don’t, my friends in St Louis can pick my carcass barer than my planting options.

The big picture here is that we’ve gotten to the point that a handful of corporations can decide what something is worth without really having a test of the market. I’m sure Monsanto would say, “Go ahead, friend, plant a different seed if you can’t afford ours.” The problem is that according to speakers at the OCM meeting in St Louis, Monsanto controls nearly 96% of the patented trait market for seeds.

That’s just about all of it.

Moe Parr was in St Louis, too. Moe’s story is told in the recently released movie Food, Inc. Moe isn’t acting on screen when he tells about being sued for what Monsanto said was illegally enticing farmers to plant patented seeds. Other seed producers and cleaners were in St Louis to tell of being “warned” about the consequences of their actions.

If Monsanto really doesn’t control the market, why do they sue seed cleaners, the guys that make a living visiting farms to help their friends, the farmers, prepare their grain for use as seed?

Well, it’s because intimidation is a big part of market control.

The truth is that in its fairly short history of being a seed seller, Monsanto has purchased more than fifty seed businesses. Some of them were big players. If nothing else, that’s proof that any corporation can become whatever they can buy.

Food, Inc. Harvesting soybeans. Monsanto is based in St. Louis, and so is its chemical company spin off, Solutia. Solutia was planted from seed sown by Monsanto in 1997, and contained some of Monsanto’s chemical businesses. Burdened by old lawsuits against Monsanto over environmental contamination from stuff like PCB and Dioxin, Solutia entered bankruptcy in 2003.

I guess Monsanto forgot to give them enough money to pay the fines.

Things are looking up for Solutia now that its liabilities have disappeared, and it has emerged from bankruptcy with a clean balance sheet and stronger profits, just like its parent company Monsanto.

That might be a good strategy for the farmers who’ve been threatened and sued by Monsanto, except once a family farm disappears it’s pretty hard to come back as something else.

For most farmers, the greatest benefit of Roundup Ready corn and soybeans has been weed control. Now pests for both crops, once held at bay by crop rotation, overwinter in fields where volunteer crops survive the following year. That means higher herbicide costs, more insect pressure — and higher profits for our friends in the seed and chemical business.

In a November 2008 paper, Jack Kloppenburg, a rural sociologist at the University of Wisconsin-Madison, writes, “Who controls the seed gains a substantial measure of control over the shape of the entire food system.” Kloppenburg goes on to state that for true food sovereignty, control of genetic resources must be wrested from corporations and governments and returned to the public, for the public good.

It’s not just seeds, but all of agriculture that needs a makeover. Small dairy and pork producers continue to lose money even as corporate food processing profits are rising. Pork producers like David Ketsenburg of Monroe City, Missouri, struggle daily with markets that are becoming less and less farmer-friendly. Even some large farms struggle.

But vertically integrated corporations that produce and market food directly not only control markets, but the direction profits flow.

Right now those profits are flowing away from farms into some pretty big pockets.

That brings up another of Aesop's fables, the one about the wolf in sheep’s clothing: the power of large corporations to steer public debate about such things as sustainable food production and control the standards for organic products. They make food appear to be something they produce in a friendly partnership with family farmers.

It’s not.

Really understanding the products in those heavily advertised, plastic wrapped packages of food is tough to do, especially when big profits are more important than little people.

But here’s something that most people should understand: Next year, farmers who buy all their seeds from Monsanto could easily pay more to Monsanto for seed than the profit they, the farmers, hope to earn.

With friends like that, who needs enemies?

See our friend Annie and her new digs!

There is a good video, made by some friends, part of a series called New Urbanism. They just made one on rooftop farming, about our pal Annie Novak!
Annie has started a rooftop farm in Greenpoint Brooklyn, to experiment with growing food in densely populated areas. Check it out!

Mushrooms saving the world(maybe not as we know it)

Paul Stamets on 6 ways mushrooms can save the world