How the Corporate food production system has Milked us dry

farmers in the UK have protesting for several weeks about the prices they are paid for milk. The has led them to blockade Dairy’s and some have even threatened to pour away their milk rather than sell it.

Now before we start making jokes about “no use crying over split milk” there is a serious point here about the consequences of the enormous monopolistic powers of the supermarkets and global food corporations. Their buying power is such that they can essentially set the price for a commodities, both in terms of what the producer gets and what we pay at the check out (with a fairly substantial gap between for them to make a hefty profit!).

Often the supermarket chains will take a “wasn’t us guv’nor” attitude to such accusations, indeed in this situation they’ve’ been pointing the finger at the milk processing companies. That is a bit like the Republicans trying to blame Obama for the economic crisis (oh! wait, they are trying to do that!). Consolidation in the food industry has led it to be dominated by a handful of large dairy companies. And its not just milk but also meats, cereals and a host of other products (Nestle being a good example of what can go wrong when such consolidation is allowed). These “middlemen” in the food industry are largely a consequence of the supermarkets desire to only do business with only a handful of suppliers and their efforts to constantly drive the price as low as possible, such that its all but impossible for anyone, but these very large companies to do business with the major chains. Thus, when the supermarkets either lower the price, or refuse to let the price go up (as it must due to inflation) the “middleman” is left with the choice of cutting his profit margin (fat chance of that!) or passing on the “saving” to the producer – i.e. the farmer takes it up the ass!

As the competition committee revealed in 2007 (a BBC news article about that here), 70% of UK food and grocery sales are derived from the top 6 supermarkets. You’ll find two good films about the problems caused by the UK’s large and near monopolistic supermarkets here and here.

Also both the food processing companies and supermarkets will try to tie smaller companies and farmers into contracts which it is very hard to back out of. Often a producer will have to pay “hello money” to get their product onto the supermarket’s shelves. They’ll also impose all sort of conditions on the company, often requiring them to reconfigure how they produce the food/product to suit the supermarket’s needs. This is obviously costly and likely leaves the supplier with large debts owed to the bank. For a small firm making, say, jam, this puts them in a bit of a sticky spot (if you’ll pardon the pun!). Having paid so much to get onto the shelves they have to keep the product there, even if the supermarket (or food processor or wholesaler in the middle) unilaterally cuts the price they pay for the product (to the point where they’d have made more money selling it by the side of the road!).

Corporate Serfdom

It is a tough life being a farmer right now. As I pointed out in a prior post many small farmers aren’t getting the subsidies they need due to larger farmers buying up their land or the certificates that allow them to claim farming subsidies. Indeed some of the most prolific buyers of these aren’t even farmers at all, they are so called “slipper farmers” who just buy land, claim their subsidy and don’t actually do any farming.

Consequently in part what is driving farmers to protest here is the not unrealistic possibility of being driven out of business. Or worse, winding up like so many farmers in America – that of being little more that serf’s of a major corporate conglomerate (report on this topic here).

As detailed in Eric Schlosser “Fast Food Nation”, or the documentary film “Food Inc.” Any images you have of pastoral farming or Daisy the cow chewing on grass in a big green field could not be further from the truth.

No instead imagine an area of semi-desert steppe, the size of London covered in cattle as part of a vast “collective” farm (so called “factory farms”. The cattle are feed on grain, notably corn, brought in from the corn belt states, often with the benefit of vast US government subsidies.

Also as you can imagine that many cattle produce a considerable amount of, well cowshit (and one assumes bullshit!). Which ultimately needs to be disposed of. But getting rid of that much cattle dung in a sustainable way, isn’t easy, as this film “A river of waste” points out.

The bulk of the farm hands earn relatively little money, indeed many are Mexican migrants driven out of business as they couldn’t compete with the US farms thanks to the generous subsides the US gives its farmers.

Mexicans, many of them illegal immigrants also make up a disproportionately high number of workers within America’s abattoirs and slaughter houses, which are again largely controlled by a handful of large corporations. In the 1970’s the big five meat packing corporations in America controlled only 25% of the market, Today through mergers and acquisitions the top four in the US meat industry control 80% of the market.

That grain that’s fed to those cattle incidentally comes from corn belt farms which increasingly utilise GM crops. Now I’m not necessarily against GM foods, if it leads to higher food yields, reduced pollution of the environment and creates food that is healthier or drought resistant, etc. But currently few if any of the GM crops in use, particularly in America, tick any of these boxes. Most require the use of more fertilisers and pesticides (they’ve been GM’d such that the farmer can pile it on without killing the crop). To me this is practically science abuse and not in the best interest of society or the environment. The corporations (who makes both the seed and pesticides) is essentially the only beneficiary and we the public are required to take all the risks for no concrete gain, while we know that this increased use of chemicals is having a deleterious effect on the environment. A report here from MIT summarizes a number of different sources on this topic.

Indeed it gets worse, as many of these farmers are forced to sign an agreement with the GM company stating that they will not save seeds, destroy their original stock of seeds and continue to buy seeds and pesticides off of the pharmaceutical companies in question. This breaks the link between the farmer and his land and leaves him beholden to the corporation. Armies of investigators hired by the corporations enforce these edicts, turning some US corn belt regions into something resembling East Germany under the Stazi.

Indeed in a few cases, where seeds from GM’d fields have blown onto the land of a farmer who didn’t have a contract with the corporation, the farmer is subsequently sued by the company and in effect forced into signing his life away as well. Thus many farmers who, truth be told, don’t want to sow such crops have effectively been forced into it. A US Canola farmer, Percy Schmeiser fought a bitter 11 year campaign with Monsanto over just such an issue. Indeed he is one of the few who have taken on the GM companies and won. Operators of seed cleaning equipment have been specifically targeted by investigators on the off chance they are helping farmers save seed (what happened to innocent until proven guilty?).

However most agree, it is the American chicken farmers who have it worst. Most are stuck with fixed contracts from the big chicken producer companies in which the birds in their chicken houses are owned by the company (again they’ve practically engineered the US chicken into something that nature never intended, it takes a modern chicken half the time to mature than it did in the 70’s and the chickens yield twice the meat). The farmers, who again have had to pay “hello money” and pay the cost of very expensive upgrades and modifications to their chicken houses, often find themselves with huge debts to the bank and thus beholden to the corporations. Many are little more than corporate serf’s living in constant fear of being cut off from their only source of income and left insolvent should they somehow offend the company with “uncorporate thoughts”.

Conditions within these chicken houses are supposed to be pretty horrendous (lots of loose dust and feed going around, workers complain of illness and allergies due to the cocktail of antibiotics fed to the chickens and the chickens themselves have a high mortality rate, which the workers need to pick up as chickens in such an enclosed environment can be prone to cannibalism).

It should be no surprise to learn that suicide rates among US farmers are at alarmingly high rate (so ditch any notions you have of a quite stress free life on the farm!).

The Union of Corporate Capitalist Republics

In essence you can see why we don’t want the UK farm’s to adopt the US style farming system. The corporate farming system in America puts profits first, with workers/farmers rights, food safety, animal welfare and the environment towards the bottom of a long list.

One could draw direct parallels with what we see in American farms today and the agricultural policies of the Soviet Union (oh the irony!). Of course that’s not good news for the US, as it was in part failures in its agricultural policy that brought the soviet empire down (that’s why there were all those food queues in Moscow around the time of the Soviet empire’s collapse). You’ll find a couple of opinion pieces which address this, and other reasons behind the soviet union’s collapse here and here.

While these Soviet policies of collectivisation did increase yields, and lower costs, it was an unsustainable bubble. The soviets very quickly exceeded the ecological limits of the land they were farming by simply sucking the nutrients out, draining water supplies (anyone doubting me, go look at the Aral sea sometime) and poisoning the environment with excessive use of pesticides. They also learnt (the hard way!) that such food production systems are also hugely sensitive to any sudden change in conditions. For example the outbreak of a new disease or a drought. Inevitably this resulted in the USSR going from being a net food exporting country in the 1960’s to being a net food importer in the 1980’s, which became an ever bigger drain on the public purse, particularly once revenues from oil production (which had also suffered under soviet mismanagement) began to decline.

We could well see history repeat itself in the US. An outbreak of foot and mouth, e.coli, mad cow, bird flu or salmonella in the US would make the food scares we’ve seen in the UK or Europe pale in comparison. As I’ve pointed out in a prior post, many of America’s most productive farming areas also happen to be the very area’s most at risk from climate change. Indeed the recent heat wave and drought in America is already having an impact on the country’s agriculture.

Worse still US agriculture is very heavily dependant on energy, the picture above shows a cow next the amount of energy (in oil) expended during its upbringing. Indeed some critics claim that by the time you eat a meal in the US many times more energy has been expended on fertilizers and pesticides, transporting that grain and cows across the country, processing the food and trucking it backwards and forwards across the country before it lands on you’re plate. In effect you’re eating oil. Which isn’t a good place to be if we’re in the last few years of the cheap oil era. Thus it is quite possible we could well find history repeating itself for a second empire in less than a century.

Becoming a locavore

Ultimately, as was shown in the banking crisis one of the biggest flaws of uncontrolled free market capitalism is that it often lacks basic survival instincts. They will engage in policies that in the short term might be very profitable, but in the long term turn out to be little more than elaborate form of suicide. Or as Jared Diamond puts it in his book Collapse “…one could characterize the collapse of many large civilisations to a series of entirely rational short term decisions, which turned out to be effectively irrational when combined over the long term…”.

This is why what is needed is a farming policy that balances the short term needs with long term sustainability. And driving the UK’s farmers into bankruptcy isn’t part of such a policy.

So what can an individual do in the UK to stop all this? Well firstly don’t vote for party’s that will knell before their corporate overlords (hint, four letter word starts with “T” and rimes with “Gory”). Secondly cut out the middleman, go directly to the farmer by buying food at a farmers market. Now admittedly, food here can be a bit pricey, but you’re getting a better quality product, so you’d expect to pay a bit more. And in any event, I often find its just a case of being choosy (i.e. like supermarkets the farmers have a financial incentive to push the more pricey high end stuff, nobody will begrudge them for that, they are after all just running a business!) by going for the cheaper alternatives (e.g. simple stuff) and being inventive with you’re cooking I usually find its not that more expensive.

I would note that one downside of farmers markets is that they often don’t provide the essentials. Ironically enough for example, I’ve never seen milk on sale at any of them. Also if you’re a vegan or a veggie finding such stuff at a British farmers market can be difficult (although given that the bulk of British farms are dairy farmers that’s hardly surprising), although certainly not impossible (used to be a very good stall in one of my old haunts who sold a wide variety of potato’s, which as an Irishman made me very happy!).

A local shop for local people

If you’re shopping in stores, try and buy from local shops and buying stuff produced regionally (I’m a pretty big fan of local British ales myself! and increasingly cider and English/Scottish berry wines, hic!). Admittedly, its going to be next to impossible for most people to not use the supermarkets from time to time. So if you do, try and go for products from smaller producers and of course organic stuff.

The plutocrats who run the supermarkets might be greedy and corrupt, but they are not stupid. They are hugely sensitive to public demand, as witnessed by the fact that some of them seem to be caving in (this time anyway) to the negative publicity surrounding these milk depot blockades. This is, as it were, the ultimate achilles heel of the corporate food production system – that they fear the consequences of we the people rebelling and vote with our feet. Indeed, we’ve already seen it happen with the rejection of GM crops in the UK, because (rightly or wrongly) the British public simply rejected them on grounds of safety.

In short to paraphrase a common rallying cry from the 1900’s socialists “they have the plant, but we have the dinner plates”