Earlier this year, 49 scarecrows were sent by British farmers to stand outside the Houses of Parliament. The image was powerful enough to garner media attention. However, the cause of it was even more unsettling. According to a survey, almost half of UK growers of fruits and vegetables predicted going bankrupt in a year. The scarecrows weren’t a practical joke. They served as a stand-in for farmers who were too terrified to participate in direct protests.
It’s not an unreasonable fear. According to reports, a farmer produced 60 tonnes of salad potatoes for a major UK supermarket, but the order was abruptly canceled. No payment. No justification. Simply ruin. Although it’s a brief tale, it conveys a lot about the real power dynamics in our food system.
When you look at that system’s structure honestly, it looks like an hourglass. At the top, food is produced by millions of farmers. Millions of customers purchase it at the bottom. A surprisingly small number of corporations, including large supermarkets, commodity traders, and agrochemical companies, sit in the narrowing middle and profit from each transaction that goes through. Only five businesses currently manage between 70% and 90% of the world’s commercial grain trade: ADM, Bunge, Cofco, Cargill, and Louis Dreyfus Company. Five businesses. The bread you’re eating. The cereal in your closet. the refrigerated meat.
It seems that most customers are unaware of this. Additionally, the businesses are taking their time explaining it. Currently, Bunge is trying to combine with rival company Viterra, which would further constrict an already small market. According to research from the University of Saskatchewan, the agreement would reduce farm incomes in western Canada alone by about $770 million annually. Both companies operate in about 40 countries and are based in tax havens, Switzerland and Jersey. Farmers worldwide, including those in Britain, would probably have to pay billions.
Farmers are not the only ones affected by this issue. According to research by economists Jan Eeckhout and Jan de Loecker, average global markups—the amount that businesses charge over their actual production costs—have increased from about 21% in 1980 to 61% in the present. In practical terms, a pizza that would have cost £12 in a less concentrated market might now cost you £16. In essence, that £4 disparity is a private tax that is neither imposed by the government nor authorized by the electorate. It’s easy to understand why some economists have begun to refer to it as “greedflation.”
The story of the seed industry is comparable. In a recent significant report, Michael Fakhri, the UN Special Rapporteur on the Right to Food, pointed out that just four companies currently control the majority of the global market for agricultural chemicals and seeds. The cost of farming increases as seed prices rise, which they usually do with this degree of market concentration. The majority of the agrochemicals linked to their genetically modified seeds are also produced by the so-called Big Four, which lowers biodiversity and makes farms more susceptible to climate shocks. It is a system that concentrates its own profits while exacerbating its own vulnerability.
It is a tale of ideology triumphing over facts about how regulators permitted this to occur. The “consumer welfare” doctrine, which holds that larger businesses are more efficient and that these efficiencies will eventually benefit consumers through lower prices, began to influence competition authorities in the US and Europe in the 1970s. The mergers continued to occur. The costs continued to increase. Out of 6,500 mergers that have been notified since 2005, only 14 have been blocked by the European Commission. It’s hard to reconcile that record with the Commission’s standing as a vigilant watchdog.
According to Oxfam, the pandemic years between 2020 and 2022 produced over 60 new food billionaires. Simultaneously, the number of farms in the EU has decreased by 37% over the past fifteen years, with small and mid-sized businesses accounting for the majority of this decline. Just 20% of the largest farms receive 80% of EU farm subsidies, which are intended to help struggling farmers. These subsidies ultimately fund supermarkets’ access to inexpensive supplies. When considered collectively, the system is able to harm farmers, perplex consumers, and favor a comparatively small number of shareholders.
It’s still unclear if European regulators will act swiftly enough to prevent the Bunge-Viterra deal from further altering the market. There are indications of real progress in the US, where authorities are actively pursuing breakup cases against Google, Amazon, and Meta. In 2021, Facebook was compelled by the UK’s Competition and Markets Authority to sell off the graphics platform Giphy, a move that had an international impact. These are not fleeting moments. They contend that the political consensus regarding corporate consolidation is gradually eroding.
As this is happening, it’s difficult not to feel that the scarecrows outside Parliament were pointing to something that most discussions about food policy still fail to specifically mention: the hourglass is getting tighter, and the people who actually grow food are being crushed. It won’t be easy to break that structure. However, it’s getting harder to argue that it’s not required.
