Introduction
The food system and the all the supply chain activities between production and the delivery of the food to the final consumer are dominated by very few corporations. The effect of this concentration of corporate entities in the food system is that the small farmer has been pushed out of business because of the mass production systems of the corporate farm owners. In the previous millennium, the sociology of agriculture was concerned about whether the family-owned farms would survive (World Congress of Rural Sociology & Bonanno, 2010). In an ideal situation, the food system should benefit from the activities of many farmers and buyers, where the sale and purchase of the farm produce are done in an open and competitive manner. In a situation where there is corporate concentration, the buyers are robbed of the choice and have to acquire the inputs for their farms and also market the produce from their farms to a small number of corporate entities.
Figure 1: Percentage controller by four largest companies in different agricultural sectors
Source: (Farm Aid, n.d.).
Figure 1 above shows the percentage within different agricultural sectors that is controlled by the four largest companies in that industry. The argument is that percentages above 45% indicate a high corporate concentration with the likelihood for abuse (Farm Aid, n.d.). The graph shows that there is a corporate concentration in the six agricultural sectors with the highest control by the top four companies being witnessed in the soybean subsector at 93% control (Farm Aid, n.d.). This is empirical evidence to show the presence of corporate concentration. With a focus on the production sector, this paper argues that the unabated corporate concentration has led to abuse of market power which has further led to adverse effects for the local farmers, consumers, and the environment.
Corporate concentration in the different agricultural sectors at the production phase denies the farmers the control and choice of the food items they produce, the production systems employed, the marketing of the farm produce and the prices at which they sell their products. A good example is the livestock production sector where the top companies contract rural farmers to the rear the animals on behalf of the company (Starmer, n.d.). The companies control most of the variables in this process. For instance, they will supply the contracted farmers with the breeds of the livestock to be reared, the feeds to be used, the medicine to treat the animals and other inputs used in rearing animals (Starmer, n.d.).
The companies also specify the production methods to be used in rearing the animals. When the animals are ready companies, come for them to be slaughtered, processed and distributed to the various markets (Starmer, n.d.). The farmer does not benefit from the value addition activities in the higher parts of the supply chain. The farmer is only paid the wages for rearing the animals under the contract of the top companies. These companies process the animals, perform value addition activities higher in the supply chain and fetch more money. The effect of these practices in the rural areas is that the farmers are denied of the profits. The rural economies are affected negatively at the expense of the top companies that control the production phases of the various food items and the different sectors in agriculture.
Weis (2012) finds that the concentration of corporate organization in agriculture has led to reduced diversity and environmental degradation. In the place of small farms planted with different crops, the corporate organizations large farms where there is increased mechanization and standardization. Since these corporate organization control different operations within the supply chain, there is a need for mass production of given product so that they can benefit from the economies of scale and to also gain increased market share in the markets for the products for which they produce (Weis, 2012). More precisely, large factories for processing a given food item requires large amounts of the raw material. To satisfy this increased demand for raw material, Weis (2012) found that the corporate owners of the large farms sacrificed the biodiversity present where there are different animal and plant species being produced in the farm and instead practiced monoculture.
Weis (2012) also finds that the practice of monoculture is not limited to the singularity of the crops and animals produced in the farms owned by corporate organizations. Weis (2012) reports that through scientific innovation and particularly biotechnology, the corporate bodies have endeavored to standardize the genetic makeup of the animals and the plants grown in the farms while also increasing the rate at which they grow, improving their yield and also their size. These are findings that are collaborated by Starmer (n.d.) who argues that since rulings by courts have allowed biotechnological companies to patent life forms, the common farmers no longer benefit from livestock genetics.
Instead, genetic control is vested in these biotechnology companies which have entered into exclusive contracts with the corporate companies involved in livestock production. As a result, Starmer (n.d.) finds that the genetic stock animals reared for eggs and meat. For instance, 70% of the genetic stock in the egg-laying market is controlled by Pioneer Bi-Bred. The second largest corporate player in this chicken industry controls 20%. The implication is that 90% of the genetic stock for the chicken reared for egg production is controlled by two companies. The continued pursuit of standardization and the dominant control of the market by these corporate bodies means that diversity will be lost.
The aspect of environmental degradation as a result of corporate concentration has been highlighted vividly by Weis (2012). Weis (2012) reckons that environmental degradation, particularly the loss of particular nutrients and the overuse of inorganic chemicals is a significant problem for industrialized agriculture, the kind practiced by the corporate organizations. The practice of monoculture when done in successive cycles results in soil mining, a phenomenon in which specific soil nutrients are depleted. The corporate organizations try to circumvent this problem by using potassium, phosphorous, and nitrogen fertilizers. However, the continued and excessive use of these inorganic fertilizers might cause a change in the acidity levels of the soil.
The use of pesticides and herbicides to combat pests and weeds respectively also contributed to the increased and sustained use of chemicals in the production phases. The practice of monocultures and the mechanization and commercialization of production has a negative effect on the environment. This is more the case because most of these firms specialize in one type of crop, and will hardly use organic practices such as intercropping or letting the land remain furrow in order to repair the soil structure. The use of inorganic and compound fertilizers may replenish the main nutrients. However, the residual effect of these practices is harmful to the environment.
The concentration of corporate entities in agriculture also denies the consumer the choice in terms of the food items one can purchase and also the prices at which these food items are bought. Starmer (n.d.) argues that the concentration of corporate organizations, especially in instances where one organization controls the production, and also the market means that only the products from this company will be in the market. This is more the case with the practices of monoculture and standardization of the genetic makeup of the plants and animals. Starmer (n.d.) finds that if the trends are maintained, consumers will not have any choice but to consume the products of the corporate farmers, even though such products might not be of superior quality. For instance, Holt & Reed (2006) finds that the corporate concentration in agriculture has clouded the perceived benefits of organic farming through the extensive use of the mechanized industrial production systems.
This is because through vertical integration, the corporate entities control all the points in the supply chain. The element of lack of choice with regards to the prices of the food products is brought about by a lack of competition in the market. The presence of a dominant player in the market stifles the competition, meaning that the prices of the products can rise arbitrarily unless checks by the government are institutionalized. The farmers do not benefit from the forces of demand and supply because the corporate organizations that dominate the market can maintain high prices even when the forces of demand and supply would have it otherwise, and argument with which Wiebe (2012) agrees.
Wiebe (2012) argues that small scale farming as is practiced by many farmers prior to the virtual takeover by the corporate entities has several ecological benefits. Firstly, the farming methods employed by the small scale farmers are sustainable and reflect the best practices in agriculture. For instance, unlike the mechanized and large-scale production by the corporate entities where monoculture is the domain, the small scale farmers practice intercropping or mixed farming. The ecological benefits of mixed farming are well articulated by Ayres & Ayres (2002) who finds that running various enterprises in the same firm helps increase biodiversity. Additionally, one enterprise can benefit from the other.
For instance, the manure gotten from the animal enterprises can be used in the firm in the place of compound inorganic fertilizers or as a supplement (Ayres & Ayres, 2002). While the argument for the use of the agricultural practices used by the corporate entities is that they are important in order to meet the rising demand for food, Sundar (2012) warns against the ecological unsustainability of these approaches. The argument by Sundar (2012) makes sense, especially during this period when climate change is an issue of concern. Weis (2012) highlights the many hidden costs of these practices which include environmental degradation, increased emissions, biological simplification, toxic bioaccumulation, salination of the soil, and water pollution among others. These issues help articulate the harm that is brought about by the corporate concentration in agriculture in addition to the other issues highlighted.
Conclusion
Corporate concentration is a practice which is already being experienced in agriculture. Corporate concentration entails the presence of several corporate entities in certain parts of the supply chain of a given animal or crop. The domination by a few corporate bodies has a few effects, among which is the freezing of the common farmers. This is through the mass production systems that are employed by the corporate bodies. The domination by a small percentage of corporate bodies has been shown through statistics of the percentage of the market across different food items that the top four companies control. The paper argued that the corporate concentration in different sectors in agriculture has led to the denial of choice and control to the farmers, a reduction in biodiversity and environmental degradation and the denial of the consumer the choice of different food products at different prices.
The denial of choice and control for the farmers was demonstrated as a product of the production methods used by corporate entities such as contacting farmers to produce on their behalf, providing the inputs, and determining the production methods to be used. The environmental degradation has been demonstrated as a product of the use of chemicals such as pesticides and herbicides and the use of inorganic fertilizers in large quantities to combat soil mining. The paper also showed soil mining as a manifestation of environmental degradation because of the monoculture practices for successive cycles the farm. The aspect of the reduction in biodiversity was demonstrated as a product of the production systems used by the corporate entities, especially the use of genetic standardization to ensure uniformity in the crops and animals produced.
The paper also demonstrated the practice of monoculture as robbing the soil of biodiversity. This goes to show that concentrated activities of the corporate bodies in agriculture, even though are profitable through economic lenses, they lead to the marginalization of the local farmers and the increase of corporate control which has been demonstrated to bear adverse effects for the consumer and the environment.
References
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