Devastating fallout of corporatization of agriculture in USA


The BJP Prime Minister (PM), his cabinet colleagues and party leaders have been claiming that the three black Farm Laws enacted of late, evidently to facilitate corporate invasion in agriculture, would bring in its wake a slew of benefits and prosperity of the peasants. They are also giving a host of spurious reasons in support of their claim though unable to provide any convincing answer to any of the relevant questions that the agitating peasants are raising. Addressing the 93rd Annual General Meeting of Federation of Indian Chambers of Commerce and Industry (FICCI) via video conferencing in December last, the PM lamented that private sector has not “explored” enough the opportunities in agriculture and allied industries. The PM suggested to the private sector that they should not lose the opportunity to invest in small towns and villages, which are going to be the pillars for India’s growth in the 21st century. In public or private, the USA was held as an idol.

But now it has come to the fore what devastation has been caused to the American peasants following corporatization of agriculture in US.  40 years ago, in 1981, the US threw open agricultural sector to the corporates. Ronald Reagan, the then US President and a strong advocate of ‘free market and deregulation’, that later became the crux of the doctrine of globalization, ended government control over the agrarian economy and provided a free hand to corporates and agri-MNCs to pursue their interests in any which way on the pretext of creating a competitive market. He argued that this deregulated agriculture would be a panacea for both the farmers and the consumers. Though 90 % of the US farms are small and medium ones, they produce only 25% of the market value, while it is the corporates that dominate the US agricultural landscape and appropriate the bulk of profit. In fact, in the last decade, income of small farms has consistently been in the red.

The share of US farmers in the retail market  has declined from 50% in the 1950s to less than 15% today. It means that with corporates taking over, the small and medium farmers  have fast lost access to retail market through small retail outlets or might be forced to sell crops to agri-giants at non-remunerative price. Farmers’ debt has been as high as $425 billion.  Loan default rates and bankruptcy filings are up, so are calls to the suicide prevention lines. Farmer suicide rates in US today are 4-5 times the national average. Moreover, nearly 75% of all US poultry farmers today live below the poverty line while gigantic agri-businesses houses (“Big Ag”) control everything from “farm to fork” and from seeds to grocery stores. Four large firms control at least two-thirds of the seed market, 80% of chemical fertiliser, grain trading, dairy production, meat supply, and almost 100% of farm machinery.  Earlier, within each square mile, generations of families tended pigs and cattle, grew oats and raised children, with the sons most likely to take over the farm. Now the lands are rented out and given over to corn  Farming. Corn is a grain used for livestock feed which, besides domestic market has large demand in overseas market. Export sales for US corn in 2020-21 was up 162% compared to previous year. US government also gives subsidy for corn production as it is deemed to be a ‘cash crop’. Government money flows to the corporations in the form of write-offs, market facilitation and crop insurance subsidies. Over 70% of the $50 billion in US government subsidies goes to the top 20% of farms.

Not only that. As small farming dwindled, nearly 80% of rural counties have witnessed population declines. Local businesses like seed suppliers, grain elevators (granaries), repair shops and even hospitals have started disappearing. Some 1,000 schools are reported to be closing every year in America’s rural districts. Nearly all the farmers hold that the “opening up” of agriculture and the rise of the  “Big Ag” who  now dominate American farming are responsible for their plight and eviction. “They are vertically integrated, from animal genetics to grocery store. What they charge isn’t based upon what it costs to produce, and it’s not based on supply and demand, because they know what they need to make a profit. What they have done, through government support and taxpayer support, is to intentionally overproduce so that the price stays low, sometimes below the cost of production. That kicks their competition out of the market. Then they become the only player in town. The system has been set up for the benefit of the factory farm corporations and their shareholders at the expense of family farmers, the real people, our environment, our food system. The thing that is really pervasive about it is that they control the rules of the game because they control the democratic process. It’s a blueprint. We are paying for our own demise,” observed one small farmer in a talk with a research firm team. Another peasant said: “Investors buy the land, and they have tractors and combines that you can run by computer,” she said. “They’ll hire somebody to sit in a little office somewhere and run that stuff off the computer and farm the land that way. Now what you’ve done is you have lost the innate knowledge of how to grow food and raise animals. You’ve lost a whole generation of it, probably two. Now we are going to rely on a few corporations to decide who is going to eat and who isn’t. We’re one generation away from that picture right now. If you want to work on a farm, you will have to work for them. They will give you a job, but you’re going to be working on their terms. They control everything. So, small farms cannot survive.”

As mentioned above, while holding brief for corporatization of agriculture, President Regan said it would benefit both peasants and consumers. A brief account of peasants’ growing predicament and pauperization has been given above. Now what about the consumers? Did monopoly takeover of agriculture reduce food prices? Or the story is just the opposite? In the past 40 years, average food prices in America have shot up by more than 200%, while the earnings of the bottom 90% have increased by less than 25%.

So, this is the inevitable outcome of corporatization of agriculture. Hence, the ongoing historic peasants’ movement braving all odds against the ploy of the BJP-led Indian government to virtually replicate US model ought to be supported and strengthened so that the requiem of Indian agriculture can be thwarted.

(Source: The Guardian-09-03-19, Hindu Business Line 12-12-20, Times of India 08-03-21)

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