I'm sure this article is a bit over the top, but even if you take it with a grain of salt it's horrifying. We all know these things happen in our food industry, so why does no one talk about it? Why are we only talking about Banks being evil, or electronics companies exploiting Chinese factories (and paying them well above local minimum wage)?
Monsanto is an interesting case. In addition to being the planet's largest seed vendor, with 23 percent of the market, it licenses its patented genetically modified traits to other companies. Think of the physical seed as the hardware and traits as the software. In the trait market, Monsanto holds a near monopoly: By 2007, according to ETC Group, 87 percent of the acreage dedicated to genetically engineered crops contained crops bearing Monsanto traits.
Okay, so farmers rely on a small handful of firms for their inputs. But it turns out the same thing holds true when they harvest and sell their crops. Just four companies—Cargill, Archer Daniels Midland, Bunge, and Louis Dreyfus—control up to 90 percent of the global trade in grain. In the United States, three of those firms process 70 percent of the soybeans and 40 percent of the wheat milled into flour. The bulk of corn and soy grown by US farmers ends up feeding animals in vast factories, and here, too, the consolidation is dramatic: Three companies now process more than 70 percent of all beef, and just four firms slaughter and pack upwards of 58 percent of all pork and chicken.
Finally, let's look at the supermarkets. Walmart opened its first grocery-selling "superstore" in 1988. Today, it controls 2,750 superstores and more than a quarter of the US grocery market. As a result, the combined market share of the four largest grocery players has doubled, from less than 20 percent in 1992 to nearly 40 percent today.
And, despite acres of shelves groaning with thousands of products, only a few large companies stock supermarkets. By 2002, the USDA reported, four companies churned out 75 percent of breakfast cereal, 75 percent of snacks, 60 percent of cookies, and 50 percent of ice cream.
In antitrust theory, when four players control more than 40 percent of a market, they're said to wield "market power"—that is, they can manipulate the prices they charge consumers and the terms on which they deal with their suppliers.
comments
Benji!
[27 January 2012]This whole recent todo about genetically modified foods really confuses me (I haven't read the article you linked to, just the quotes, so I don't know if it even talks much about genetically modified food but this is something that has really been bothering me). Humans have been genetically modifying food for centuries. I don't remember what it was, maybe corn, but they can't even figure out where corn came from it has changed so much from humans breeding it.
There is no such thing as natural, humans have touched it all. I'm reading a book called 1491 right now, and even the idea that the Americas were this natural pristine land before the whites came in a ruined it appears be pretty wrong.
And as far as buying local, I agree with that completely but only for naturally native products. Often times buying local means buying products that don't come from the area and thus require many more resources to grow/produce locally. It can actually be better to buy your "fresh" fruits from South America because it means you aren't hurting your local environment to grow those fruits out of season and out of their natural habitat.
As for a few large companies owning everything, it seems to me to be a pretty depressing but inevitable end. I would greatly prefer everyone to be able to have a chance in a market and be able to hold their own in a market but it just isn't efficient. There is a reason no one can compete with Apple on price for tablets, they have incredible deals for acquiring their parts in bulk. Why would food be any different?
And as far as Walmart being evil and all that, I really don't think it is black and white. I hate shopping at Walmart because I hate the shopping experience and in general think the stuff they sell is low quality. But they've been able to help a lot of people's lives by selling them goods for cheaper than the customers otherwise would have been able to buy it. They make a HUGE difference in a lot of people's lives. Additionally, coming back to the efficiency argument, they were able to get a substantial amount of trucks off the road by being smarter about how they shipped things, which in turn meant a lot less fossil fuels being used. Many smaller companies wouldn't have been able to do that. To me Walmart sucks, not because it is big or controls everything (there are companies that are big and control everything that people like, say Apple and Google), but because it encourages its employees to not work full time so they don't have to pay full health benefits. And I don't even know if they still are doing that. And I'd be curious to know more, but just because they are big doesn't mean much to me anymore. That's just the way the world it.
THE Lowly Peon
[01 February 2012]well, i'm not sure i want to get into a big debate about it on avalantern, but regarding genetically modified foods, i'm with you. the trickiest part is defining what genetically modified even means! seedless watermelons are genetically modified simply by breeding. (though my friend believes big corporations did this to make seeds more valuable.)