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America runs on poverty: How food monopolies exploit the poor

There is too little subsidization of small farms and too much power in food industry monopolies; this is a problem because it drives up grocery store prices to such a degree that the inaccessibility of healthy food contributes to the so-called “obesity epidemic.” Therefore, the government needs to enforce anti-monopoly and antitrust laws, as well as subsidize small farms, to make the prices of healthy food as cheap as possible for the ordinary American.

As the Declaration of Independence tells us, the government has an obligation to ensure the opportunities of life, liberty and happiness for every American—and to ensure a healthy life, healthy food must be accessible. Voters and their representatives need to stop throwing around phrases like “obesity epidemic” without dealing with its root cause, food scarcity. The American Dream is dead; America is in crisis, and America is starving.

The biggest contributor to America’s poor health is the fact that for most people, healthy food is simply too expensive to buy because America’s agriculture is run by monopolies. It is these very monopolies that are responsible for America’s exorbitantly high food prices. According to Food and Water Watch, “consolidation of the food supply is severe at every step of the food chain, from farm to fork. And it impacts not only farmers and food manufacturers, but also consumers in the form of reduced consumer choices and higher grocery prices.”

Monopolies decrease competition, which allows companies to raise prices without worrying about losing business. For example, let’s say you want to buy some milk, and your local store only sells these brands: Silk, Horizon Organic, and the Organic Cow. These brands don’t have to compete for the lowest price because they are all owned by a company called WhiteWave. Among monopolies, you are a captive customer. No matter how high the prices are, you have to buy high because you don’t have any other options. Food and Water Watch says that corporations know that when they sell multiple brands of the same product, it “leads consumers to believe that they are choosing among competitors when they are actually just choosing among products made by the same firm that may have been made at the same factory.” According to the University of Missouri, the “four largest food and agriculture companies controlled 82 percent of the beef packing industry, 85 percent of soybean processing and 63 percent of pork.” If healthy food is ever to be affordable, we must break up monopolies by enforcing antitrust laws so that true price competition can exist. 

The power of monopolies doesn’t only affect store prices—it also affects the livelihoods of small farmers, and contributes to the perpetual poverty associated with the job. As CounterPunch Magazine states, one of the agribusiness monopoly’s most harmful effects is that it “drives up the prices that farmers pay for inputs, such as seeds, and forces them to accept lower prices due to the lack of any pretense of a competitive marketplace.” 

As the Democratic party continues its death crawl to the political center, it is quickly losing its reputation as the party of trust-busters like Franklin Delano Roosevelt. Politicians, even those who claim to be on the left, refuse to tackle the root of the problems consumers and small farmers face; instead they rely on intermittent bailouts to assuage America’s farmers. But even last year’s 16 billion dollar bailout was “just a Band-Aid,” Bret Davis, a fourth-generation soybean farmer in Delaware, Ohio told the New York Times. He said he had received roughly $150,000 of bailout money last year, but estimated that his losses due to the trade war “were almost $250,000″—losses enhanced by the inherent financial fragility of being a small farmer.

Democrats’ unwillingness to attack greedy agrobusiness might come from the fact that agribusiness corporations American Crystal Sugar, Deere & Co, Farm Credit Council, Publix Super Markets, Limbi LP, British American Tobacco and many others all have Democrats on their payrolls according to campaign finance watchdog Open Secrets. Republicans, of course, receive millions in donations as well. Last year New Food Economy reported on the USDA’s elimination of the the Grain Inspection, Packers and Stockyards Administration (GIPSA), which was responsible for enforcing antitrust regulations in meatpacking. Its functions are now nested within the Agricultural Marketing Service (AMS); the AMS is overseen by the Trump administration, which is $837,480 deep in the agribusiness industry’s pocket as reported by Open Secrets. In light of these facts, it is no longer an exaggeration to say that the meatpacking industry literally has zero direct oversight.

According to the American Academy of Family Physicians, obesity rates are continuing to climb. Now is the time to take severe, direct action against the corporations starving the American people; as Food and Water Watch states, “it is time for regulators to step in to protect consumers and restore some semblance of competition for consumers in grocery stores, providing a chance for innovative, small or local food companies to get on store shelves.” 

All this does seem dire—and it absolutely is—but there is some good news. New laws to protect American consumers from monopolies don’t need to be created; current laws just need to be enforced. The Clayton Antitrust Act of 1914 was built off the Sherman Act to create a four-part comprehensive anti-monopoly legislation. The Clayton Act explicitly bans “[discrimination] in price between different purchasers of commodities … lessen competition or tend to create a monopoly in any line of commerce.” This means that, in theory, businesses are not allowed to price their products differently when targeting different markets. The act also bans selling goods on the condition that the purchaser shall not conduct business with market competitors when the effect of such behavior contributes to a monopoly.

Under the Clayton Act, selling products on the condition that the buyer not engage with any market competitors, or on the condition that the buyer also purchase another product, is illegal; this bans exclusive dealings and product tying. Regarding how monopolies get created in the merger process, the act also states that “no person … shall acquire, directly or indirectly, the whole or any part of the stock or other share capital … of the assets of another person engaged also in commerce … where … the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.”  The act also regulates mergers and monopolies through the stipulation that “no person shall, at the same time, serve as a director or officer in any two corporations … that are … by virtue of their business and location of operation, competitors.”

The U.S. Department of Justice even admits that nearly every major agribusiness company has violated the Clayton Act in some way, from Monsanto to Cargill to Dean Foods. Since 1914, the law has fiercely regulated America’s monopolies to the extent that they shouldn’t even exist; but our politicians, in their greed and ambivalence, have prevented the just vision of the Clayton Antitrust Act from coming to fruition and benefiting all American consumers. 

Organizations like CounterPunch and Food and Water Watch outline a few common-sense recommendations that, with their swift implementation, would strike a blow to the power of food monopolies and alleviate the pressure on American consumers to shell out for high markups in their grocery stores. 

Furthermore, a future where small farms and local food businesses thrive and where monopolies and trusts are dead “will require increased funding for the Department of Justice and the Federal Trade Commission (FTC) to support a staff committed to public, not corporate service.” As CounterPunch continues to put succinctly: “the Department of Justice … must launch serious investigations into the illegal practices of agribusiness corporations, including the effects of mergers and acquisitions on food system workers. Next, breaking up corporations must be seriously considered—this means overturning past mergers, as well as looking into breaking up the corporate processors, retailers, and distributors that currently control the food system.” 

Food and Water Watch also maintains five recommendations for the U.S. Government with the goal of making the food industry more accessible and equitable:

1) “Congress or the FTC should enact a national moratorium on grocery chain mergers, including the host of deals already pending.” 

2) “The FTC should reject mergers or sales of food companies or brands that add to consolidation inside the supermarket. The FTC has approved food company mergers unless the firms are rival manufacturers of specific grocery items, which has allowed food conglomerates to control the overall variety of goods sold in grocery stores.” 

3) “The FTC should investigate and document the level of consolidation in grocery retailing nationwide and in metropolitan areas and its impact on consumer choices and prices. Grocery inflation has now significantly outstripped overall inflation and wage growth; the federal government must assess the role of both manufacturing and retail grocery consolidation on prices and choices.” 

4) “Congress must grant the FTC sufficient authority to effectively regulate food marketing, especially to children. Today, Congress has limited the FTC’s authority to restrict food marketing. Congress should provide the FTC with the full authority to regulate food and beverage marketing and give the FTC the authority to create mandatory nutrition standards for food and beverages marketed to youth.”

5) “The FTC must investigate and document the coordinated practices used by grocery retailers and food manufacturers that act to block new, local and innovative companies from getting onto supermarket shelves. Common practices that are justified as increasing efficiency (such as shared in-store marketing costs, slotting fees or category captains) only have served to cement the dominance of the largest companies at the expense of the innovation and local food companies that consumers want to see in the grocery store.” 

Monopolies have a direct, negative impact on American health. There is an undeniable connection between food prices and the ability of consumers to access healthy food. As we advocate for changing the structure of America’s food system, we also advocate for America’s health, and as we do, it is important that our rhetoric is right. By focusing our attention on a so-called “obesity epidemic,” we inherently apply a moral evaluation to weight; there is nothing inherently wrong or immoral about being fat, and calling it an epidemic does not make it so. By focusing on weight, exercise, or even the much-maligned American portion sizes, our moral disdain is being misapplied to fat Americans, rather than the grocery chains and food corporations that overprice healthy food in such a way that eating fast food is significantly cheaper than even buying groceries. Obesity, by and large, is not a result of gluttony, but of poverty. 

Health and income are also undeniably related. The primary stakeholders of this issue, poor communities and communities of color, bear the brunt of health problems in America. An example that I, as a college student, have been bombarded with concerns over is the “freshman fifteen.” We’ve all been told that the freshman fifteen is the result of students leaving home for the first time and being free to indulge in junk food, but how can we possibly expect poor college students to stay healthy and eat whole food when at most universities, food options consist of fast food chains, and they cannot afford fresh food at the grocery store? 

Our ideas about food production are lies. We have all been raised to believe that if something is expensive, then it is deservedly so. But in truth, America is an outlier in its exorbitant food prices. Across the world, obesity is lower in places where whole food is cheaper. American prices are artificial, the result of corporations preying on the American misunderstanding of food, health and poverty.

Lastly, while we must attack large corporations, we must also promote the success of small farms and local food businesses through subsidies. For too long, the government has been subsidizing the wrong type of farm. The bulk of U.S. farm subsidies go to about 4% of farms, practically all of which are monopolies that produce corn, soy and wheat. Most of that product skips the store and is processed into the also heavily subsidized ethanol. The product that doesn’t get made into ethanol gets used as feed in factory farms, which are only second to monopolies in their destructive nature. 

Small sustainable farms are what should be supplying our food. In fact, the proliferation of small sustainable farms would be the natural result of breaking up monopolies. However, small farms are incredibly hard to sustain, as well as expensive to buy from. All you need to do is go to a farmers’ market rather than a chain grocery store to see how the high cost of running a small family farm drives up prices. To make these prices lower, the government must alleviate the production costs by subsidizing small farms. Factory farms harm vulnerable workers, voiceless animals and the earth.

As the Institute for Policy Studies asks, if politicians are “going to subsidize agriculture, why not give more support to family farms, which often farm more sustainably and grow much healthier foods?”  We know why—politicians won’t bite the hand that feeds them. Agribusiness has a strong hold on politicians, with Hillary Clinton receiving over $2 million in donations from the agribusiness industry, according to Open Secrets.

Corporate influence in politics is the biggest roadblock to breaking American monopolies, and in order to break its stronghold as soon as possible, we must elect Senator Bernie Sanders as President of the United States in 2020.  In the 2020 election cycle, “77 percent of Sanders’ fundraising this year came from donations of $200 or less. That’s the highest share of small-dollar donations relative to total fundraising among all major candidates,” according to the Washington Post. As stated on his campaign website, Sanders also plans to “ban all corporate contributions to the Democratic Party Convention and all related committees, and as President he would be ban all corporate donations for inaugural events and cap individual donations at $500.” 

To improve America’s health, we must attack on two fronts: general poverty and food prices. Stopping short of the anarcho-communist long-term goal of the human right to food, housing, education and guaranteed work, in the short term we must take immediate steps to feed our country. Sanders is the only candidate with a comprehensive wealth redistribution plan that will help more Americans rise out of poverty. As the Guardian explains, “oligarchy rules the United States: the republic has been ransacked, its commonwealth privatised, and rentierism runs amok. The richest 10% of Americans capture an estimated 97% of all capital income.” Sanders’ Extreme Wealth Tax will “raise an estimated $4.35 trillion over the next decade and cut the wealth of billionaires in half over 15 years, which would substantially break up the concentration of wealth and power of this small privileged class” while simultaneously providing funds for social services like free college. According to the Associated Press, Sanders also advocates for progressive policies that specifically target food inequality, like increasing the distribution of SNAP benefits, as well breaking up agricultural monopolies and subsiding small farms. The saying we all learned in kindergarten still holds true; you are what you eat. And because of the predatory nature of capitalism and the immense power of food monopolies, Americans eat like crap.