Farmers’ proposals for addressing industrial concentration in the agri-food chain

 
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The global dominance of a few large companies in the agri-food chain is a major challenge for farmers.

 
Therefore, the IFAP adopted in June 2004 a policy paper which calls for stronger action to enforce and enhance anti-trust (competition) laws as well as a policy paper on economic organisation of farmers to increase their share of the valued added from food markets.

The IFAP policy provides recommendations to make farmers more equal players in an increasingly vertically and horizontally integrated agricultural production system.  

 However, competition authorities must not prevent farmers from acting collectively, in the way that labour unions are able to do. Decisions concerning mergers of farmer cooperatives at the national level should take into account their small size on international markets.

 

Farmers’ proposals for addressing industrial concentration:   1. A legal framework to control anti-competitive behaviour at both national and international level.   2. A public policy that facilitates the organisation of farmers in the market to better face the large companies that dominate the agri-food system. 3. Supporting measures to enable farmers’ marketing organisations to deal with changes in the international economy e.g. training of leaders, mechanisms to access investment funds and professional expertise. 4. Development cooperation that encourages the grouping of producers in joint economic projects. 5. Agricultural policies that stabilise the farm economy and maintain food security.

Legal and institutional aspects

 
The inadequacy of current competition rules is one of the most pressing issues facing farmers across the globe. Independent agricultural producers cannot succeed without protection from unfair, anti-competitive practices. This is evidenced by the sharp decline in the number of family farmers in the past decade and the increasing trend toward horizontal and vertical concentration in the agricultural and food sectors.

 
The IFAP believes concentration in food production, processing and retail could be turned around with enforcement of antitrust and competition laws, a strengthened regulatory system, increased protection of consumers and revitalization of independently owned businesses and competitive markets.

 
Specifically, the IFAP requires government anti-trust agencies to require economic impact statements of proposed mergers and joint ventures. IFAP also supports establishing a level of concentration that triggers a presumption of a violation of antitrust law to make it easier for enforcement agencies to prevent high levels of concentration.

 
IFAP farmers want to limit packer ownership of livestock and control of production by non-farmer-owned corporations.  IFAP supports family farm contract producers and policies that enhance fairness and provide producers protection in their agricultural production contracts. It also supports family farm contract producers.

 
 

Organisation of farmers in the market

 
Another solution is to strengthen and adapt farmers’ economic organization. Farmers’ recommendations relating to economic producer organizations include: providing special status, tax regulations, training, access to funding, research and development, appropriate legislative modifications with farmer input, and access to fundamental services in rural areas for EPOs.  IFAP also proposed further development of farmer-owned cooperatives and marketing boards.

Local markets are being replaced by large multiple retailer who source their products globally. Even in developing countries, supermarkets already account for a much as one third of food sales, e.g. in Kenya. Producers need to group together to share technical information on markets, to by-pass middlemen in the commodity chains, and to take join marketing actions to exploit market opportunities. This is the only way for farmers to be more equal partners in a highly concentrated global agri-food system.