Only 30,000 farmers needed? eep your eye on the mergers and alliances among large food companies. Someday, you will probably need one for a partner.
At a recent seminar on biotechnology, a University of Missouri sociologist reports that by the next decade, the world's food production will be controlled by a handful of companies. Grain farmers will contract directly with these companies, becoming the first in a seamless chain of food production. Farmers will provide labor, land and equipment. "Farmers will slide right into these systems," reports William Heffernan, part-time farmer and rural sociologist. "Farmers will become growers and won't make major decisions. These systems will control the products from genes to the retail stores.
"In the seamless system, there will be no markets, no prices," he adds. "The first time the price of any input in the system will be public information is the supermarket. Even the price of animal feed like corn will not be known to the public because, like today's broilers, the products will not be (openly) sold."
Heffernan says he sees three global food clusters already emerging. They are Monsanto-Cargill, ConAgra and the ADM-Novartis-IBP alliance. Another three companies are on the verge of developing into food systems. Heffernan believes Zeneca, Aventis and DuPont could enter the realm of global clusters. However, DuPont may join on with ConAgra, he speculates. Another possible food system may occur with Dow AgroSciences and Mycogen.
The three global food systems already exert substantial control over the food industry, Heffernan adds. For example, market share of four grain industries are controlled by a few companies, which include some of the emerging global food systems like ADM, Cargill and ConAgra (see table).
Signs of these major food companies moving to the farm level are seen in contracts now being offered to farmers for grain production, Heffernan says. These contracts are similar to those in the hog and poultry industries. The grower provides labor, land and equipment. The contractor provides seed, chemicals and management.
Fewer farms. Following a trend from the 1950s, farms will switch from family operations to industrialized organizations and drop in numbers, Heffernan says. Poultry switched to this system first and livestock production followed.
Crop farms are next. "We hear more and more about needing only 20,000-30,000 farmers in this country to produce a globalized, industrialized food system," Heffernan says. "Right now, we have about 300,000-500,000 commercial farms."
This scenario may make you shudder, but agriculture is not alone. "The food system is not any different from other economic systems of the global economy," Heffernan says. In fact, it is becoming more like the banking, computer, automobile and mass media industries.
Farmers may not like this system, but some are actually part of the fuel driving it. These firms are in the business to make money for stockholders, Heffernan explains. "We need to realize most of us have pension plans and we're personally invested in a variety of funds. We expect a high rate of return on our investment." These corporations use acquisitions and alliances to obtain those profits.