Give Relief Fund Priority to Smaller Farms and Businesses Coalition Urges Treasury Secretary

Gina-Marie Cheeseman

The COVID-19 pandemic exposes the fragility of a food system increasingly consolidated among large, industrial farms. We have an opportunity to support struggling smaller farms and provide more resilience to the food supply chain.

A coalition of 68 farmer, environmental, and antitrust groups in the U.S. wants to ensure that pandemic relief funds do not contribute to more consolidation of the food and agriculture industry. The non-profit organizations recently sent a letter to Treasury Secretary Steven T. Mnuchin, urging him to give priority to small and medium-sized farms and agricultural businesses.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law in March, provides more than $2 trillion in funds to help both individuals and businesses. The stimulus package includes $9.5 billion for the U.S. Department of Agriculture (USDA) to give to farmers and agriculture businesses. Title IV of the CARES Act authorizes $500 billion to the Treasury Department “to make loans, loan guarantees, and other investments” to businesses, states, and municipalities.

“The COVID-19 pandemic is upending our food system, threatening the livelihoods of our nation’s farmers who have already endured six years of depressed prices and farm income,” the letter from the coalition states. The letter goes on to urge the Treasury Department to “block any loans to and investments in major corporate players in the food system, including the largest meat and poultry processors, seed and fertilizer suppliers, and supermarkets,” and give funds to family farmers, smaller meat processors, farmers markets, farm stands, and independent grocery stores.

“The Trump Administration must not use Title IV funds to place more power in the hands of corporate agribusiness to wield against small farmers.”

The consolidation of the food and agriculture industry

A shift has occurred in agriculture in the U.S. over the past three decades. In 1987, 57 percent of all U.S. cropland was run by midsize farms with 100 to 999 acres, while 15 percent was run by large farms with at least 2,000 acres. By 2012, 36 percent of cropland was run by farms with 100 to 999 acres. In 1991, farms with at least $1 million in gross cash farm income (GCFI) accounted for 31 percent but in 2015 they accounted for 51 percent. Small farms with less than $350,000 in GCFI accounted for 46 percent in 1991, while they accounted for 25 percent in 2015.

“Almost every step of America’s food supply chain has grown more concentrated in the past few decades,” proclaims a report by the Center for American Progress. The report details the consolidation that has occurred in the country’s agriculture and food industry. Take the corn seed market which is controlled by the four biggest biotech companies. The share of the corn seed market has increased from 50.5 in 1988 to 85 percent in 2015. Farmers' choices in seed have decreased and the cost of seeds to plant one acre of corn increased 259 percent between 1995 and 2011. Yet the yield per acre only increased 29.7 percent.

Consolidation hits some sectors harder than others. Livestock is one of them. In 1980, 34 percent of all hogs were slaughtered by the four largest meatpackers, while in 2015 that number was 66 percent. The four largest meatpacking companies also control 85 percent of beef packing and 51 percent of broiler chicken processing.

Recent news articles about a potential meat shortage in the U.S. highlight how consolidation affects the country’s food supply. A number of workers in meat production facilities tested positive for COVID-19, shutting some of those facilities down temporarily. “Such concentration of meat production poses health safety issues,” Paul Hong, professor of global supply chain management and Asian studies at The University of Toledo, told Real Simple.

“Unchecked market power created the farm crisis we are currently experiencing,” according to the letter by the 68 organizations. The solution is to “prevent further concentration in the face of this crisis,” the letter states, by the Treasury Department directing Title IV funds to small and mid-sized farms. 

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