Currently, factory farms are able to negotiate substantially better prices per unit production (head of cow) than family farms.
Why? One answer is simple: supply. Diary alone is revealing. According to Food and Water Watch, an agricultural watchdog non profit, “in 1980, 435 diary cooperatives marketed 77 percent of milk [in the US].” In contrast, for the year 2002, 196 cooperatives marketed 86 percent. (Food and Water Watch).
But consolidation means that family farms outside the group are not able to receive the same prices and often don’t get even close to the same pay for the same unit of production.
Family farms lack collective bargaining power.
Every year a huge amount of money in the US budget gets allocated in the US Farm Bill for farm subsidies, of which the large majority goes to agribusiness, not small farmers.
Proposed changes to the 2012 Farm bill are starting now, and many are aimed at addressing the current state of monopoly in the US food and farm business.
The Food and Water Watch Fair Farm Bill press release stresses “level the playing field” and “make markets fair.”
This issue is complex: if one’s political philosphy is not to support unions but to support free trade, market interference is not helpful. But the current big ag companies already receive market interference through the varied ag commodity subsidies, not to mention routine administrative approval of products that have not been tested under standard scientific principles for food safety (gm food in particular).
Added to the current US government support of corporate agriculture through subsidies is the prospect that Monsanto and Dupont control 90 percent of the world’s seed supply. In considering the markets from that aspect, questions of market interference then shift to the issue of monopolization..
Food policy watchdog groups have in recent years proposed that Monsanto and other big ag corporations be considered as monopolies and broken up, much the way Ma Bell was.
Initially, the loss of “Ma Bell” occasioned bad service. Ultimately, today, every consumer has their own cell phone and can choose from a variety of options.
Maybe breaking up monopolies is actually a strong movement towards capitalization. Maybe it would be the best step towards offering consumer choice over food–and over food safety.
And maybe, a diversified market might even increase the number of family farms, which would be a welcome reversal to a decades-long negative trend.