By Jamie Martin
A recent report titled "Kings Over the Necessaries of Life" has revealed alarming trends in the agribusiness sector, highlighting how decades of mergers and consolidations have led to a significant reduction in competition. This decline in competition has resulted in higher costs for both farmers and consumers across Maryland and the entire United States.
According to Basel Musharbash, the principal attorney for the Antimonopoly Counsel and the author of the report, the failure to enforce antitrust laws since the 1980s has created a situation where a small number of firms hold substantial market power.
These companies have the ability to control prices and limit competition in virtually every area of the agricultural economy, including the production of seeds, pesticides, and the distribution of food.
The report outlines several harmful practices adopted by these companies, including the manipulation of supply to artificially inflate prices. For example, despite the rising prices of beef, the share of the consumer dollar that goes to cattle farmers has dropped significantly from 70% in the 1970s to just 30% today.
In the fertilizer sector, consolidation has led to three major firms dominating the market, allowing them to exert control over prices and limit competition.
Since the 1990s, these firms have dramatically increased fertilizer prices—by 60% in 2021 and an astonishing 132% the following year.
While companies often blame supply-chain issues for these price hikes, Musharbash argues that their financial reports tell a different story, indicating that these increases are driven by monopolistic practices.
The report also introduces an Agriculture Consolidation Data Hub, which tracks the effects of consolidation in various agricultural sectors, including farm machinery, crop insurance, and the seed industry.
The seed sector is now controlled by four large companies, which have driven up prices faster than any other agricultural input over the past two decades.
Musharbash emphasizes the urgent need to strengthen antitrust enforcement in the agricultural sector. He asserts that the current state of affairs is not inevitable, noting that past government actions effectively broke up monopolistic structures, restoring competition in the market. With the right policies and enforcement, it is possible to create a fairer environment for both farmers and consumers.
Photo Credit: agribusiness-global-trade-summit
Categories: National