The Union Farmer Quarterly/Fall 2001

If we pull away that Hallowe'en facade, what's really happening behind it?

"There's a transition of ownership of agriculture going on," says National Farmers Union Vice-President Fred Tait. "The corporations are taking over whatever parts of agriculture they can confine and centralize. They're replacing farmers with remote investors who don't care about the local community, the environment, the workers or the animals. They try to disguise what they're doing as farming. But it's not about farming at all. It's about investment and return."

"Investment and return" - that's what they do on Wall Street (even now.) That's the stuff that excites bankers and financial consultants and corporate lawyers, the hype that the media keep trying to push at us as "news". Investment and return - it's profit that's important, whether the product is pork or petroleum, potato chips or computer chips, health care services or engineering expertise. In fact, in the world of investment and return, there doesn't even have to be a product; in currency trading, trillions of dollars change hands daily with no material basis whatsoever. It's a world far removed from the realities that make up a farm family's life - the weather and the seasons, crops and animals and machinery, chores and bills and trying to make ends meet.

But that artificial world of investment and return is imposing itself on agriculture more than ever these days, notably in the form of ILOs. The link between the stock market and that massive new mega-barn down the road may not be immediately apparent, but it is there. Research by the NFU and others on pork production reveals a dizzying matrix of inter-related corporate interests controlling most of the hog sector in North America.

Almost all the companies involved are vertically integrated, raising industrial numbers of hogs to ensure a steady cheap supply of animals for their meat-packing plants and a captive market for their feeds and other inputs. Even when the companies don't own the barns or the animals themselves, they operate increasingly through production contracts whose terms make farmer "ownership" a joke.

Of course it is not only the livestock sector that is seeing this shift to ever greater corporate domination. In most other agricultural sectors, however, that domination tends to take somewhat different forms. Darrin Qualman, the NFU's Executive Secretary, points out that the nature of the product is a major factor in determining exactly how the companies will try to exert and increase their control. For example, grain can be stored for long periods of time without processing, while supplies and prices fluctuate. This storage element allows the big grain trading and milling companies to time their transactions so as to maximize their profits without necessarily owning or working the land which is the basic means of production.

But you can't store hogs. There is a very specific time period when the animals are ready to be slaughtered and processed, and big centralized packing plants require a continual and dependable flow of hogs at exactly that stage to operate at optimum capacity and keep their investors happy. So they try to control their supply of animals, as well as the price and quality, by investing in or contracting with mega-barns.

Supply managed agriculture presents a completely different picture. It's not that the agribusiness corporations wouldn't love to control dairy, eggs and poultry just as they do everything else, but in those sectors they have to deal with well-organized and established bodies of producers who themselves collectively control supply and marketing. In the US, where there is no such system, a single highly integrated corporation, Tyson, controls almost all broiler chicken production, and there is massive concentration in dairy, eggs and turkeys as well. It is our supply management system which has so far saved Canadian dairy and poultry farmers from a similar fate.

Without supply management, however, farmers are vulnerable to all the pressures that corporate interests can bring to bear. Whether you're talking beef or cucumbers, oats or strawberries, it is essentially a buyer's market, dominated by the big companies - packers, processors and chain store retailers. Their ideal vision of food production is of a giant assembly line - non-unionized of course - where the corporations control every detail and skim off the profits at every step along the way.

And with ILOs, they've pretty well got what they want.