Revitalize Rural America? First grow some backbone

Eric Holt Gimenez

Executive Director, Food First/Institute for Food and Development Policy
With Annie Shattuck

June 4, 2010


U.S. Ag Secretary Tom Vilsack recently declared a "silent" crisis in rural America. Silent? The American farmers testifying at the joint antitrust listening sessions held by the USDA and Department of Justice (DoJ) were loud enough. If their denunciation of the monopolies controlling our food system--and government inaction on antitrust abuse--is silence, it is only because their voices fell on deaf ears.

Yesterday Tom Vilsack, with the best of intentions, published an opinion piece outlining, among other things, the need to increase export markets, grow rural economies and strengthen the farm safety net.

We are all for growing the rural economy, but when the USDA talks about growth, we need to ask, growth for whom? Conspicuously off the Secretary's agenda was restoring competition in agriculture: getting fair prices to farmers, and breaking up the monopoly market power of multinational corporations.

Just four companies control 84% of the nation's beef and 70% of pork. One company controls 40% of our milk supply, another holds patents on 80% of our corn, and just five chains sell 50% of the nation's groceries.

Why does this matter? Dean Foods, for example controls a dominant share of the market on milk, essentially creating a monopoly stranglehold on prices. The result? In the past 18 months milk prices to farmers have plummeted by 50%. Prices to consumers have not fallen nearly so far. In the words of Southern Iowa dairy farmer Jerry Harvey "The American Dream has turned into the American nightmare." Milk prices have been so low he can't afford his feed costs. Harvey's story has resurfaced a heartbreaking number of times. In Iowa in March another dairy farmer testified his parent's farm was foreclosed--on their 29th wedding anniversary.

We will not "grow" the economy for America's family farmers if they stay under the thumb of corporate monopolies that can essentially name their price.

The USDA's solution to chronically low market prices is to increase production, call in the taxpayer subsidies, and dump the excess grain on markets overseas. But in the words of Iowa corn farmer George Naylor - "Farmers don't export. ADM, Cargill and Bunge do." In fact those three companies move the majority of the world's traded grain. Exports from the US and Europe, delivered at below the cost of production thanks to the USDA's safety net (subsidies), destroy food systems of the world's most vulnerable people by undercutting local producers. Shockingly, the majority of the world's 1.2 billion hungry people are farmers--not because they can't produce enough food, but because they get low prices for their grain. Months later, they buy it back again at two and three times the price. That's when hunger sets in.

If Secretary Vilsack wants to revitalize rural America, he needs look no further than his second in command, Kathleen Merrigan. The Know Your Farmer, Know Your Food program to increase local food purchases is a baby step in the right direction - and not because food is the latest liberal fad. Local food systems can be an engine for local economic development.

Ken Meter of the Crossroads Resource Center estimates that if the Chesapeake Bay region were to increase its local food purchases by 15% it would generate three times the amount of money federal subsidies bring in to the community. Ohio, in the heart of farm country, only sources 1% of its food from within the state. If that was increased to 10%, it could mean an additional $7 billion a year in wealth - more half the entire national "farm safety net" in the US farm bill. This may be why Willie Nelson recently quipped "In 1985, we started out to save the family farmer. Now it looks like the family farmer is going to save us." But this can't happen if farmers (and consumers) continue under the thumb of agrifoods monopolies.

To his credit, the Secretary also mentioned local and regional economies and green jobs in his platform, but those came after the subsidies and increasing exports that primarily benefit the monopolies the DoJ is investigating. The point is, even "local" won't save our local economies if the profits from the local sale of local products is spirited off to corporate coffers far away. "Local" can work - if we keep the food dollar in the community. We will grow the economy when the DoJ and the USDA grow enough backbone to roll back the power of the monopolies squeezing our food system.

Last fall, responding to criticisms about corporate control of agriculture, and the paltry amount of resources devoted to local and sustainable food, Secretary Vilsack defended government support for big agriculture by drawing on an analogy of his own family, saying, "I have two sons, and I love them both." Meaning, the USDA must take care of monopoly corporations as well as family farmers. We have no doubt the Secretary's real sons are wonderful, but in the case of monopolies and local agriculture, one is Cain, and the other is Abel.