Pandemic-related disruptions have exposed underlying weaknesses in our food and farm system, National Farmers Union (NFU) President Rob Larew told the House Small Business Committee today during a hearing
. In both verbal and written testimony
, Larew highlighted the need for significant structural reforms to protect farmers and consumers from similar disruptions in the future.
One of the primary contributors to supply chain delays and food shortages has been widespread corporation consolidation, particularly in the meat processing industry. Since 1968, the number of slaughtering facilities has dropped from 10,000 to just 2,773 – representing a 72 percent drop in just 52 years. “As the number of plants has shrunk, many remaining plants have grown in size,” Larew said, citing the fact that “just 50 plants slaughter and process 98 percent of all cattle in the United States.” Similar levels of concentration across the food sector has made the entire industry “less competitive, resilient, and flexible,” to the detriment of farmers and consumers alike.
As a solution, Larew proposed policies that would stem the tide of consolidation as well as build out regional food infrastructure. For the former, he recommended “stronger antitrust enforcement from the Department of Justice (DOJ), the Federal Trade Commission (FTC), and the Packers and Stockyards division of USDA.” For the latter, Larew pushed for legislation that would support the development and certification of small- and mid-sized processing plants, thus giving farmers “more options to bring their livestock to market.”
Another major problem exacerbated by the pandemic is chronic oversupply. For years, free trade agreements and cheap food policies have encouraged farmers and ranchers to overproduce certain commodities, which has pushed down prices and forced small-scale farmers out of business. In recent months, restaurant closures and shifting demand has made matters worse, as Larew noted in his testimony. “Many farmers and ranchers were left without a market for their products, leading to surplus crops being buried and milk being dumped,” he said. “Other farmers who managed to find a market often had to accept a lower price due to sudden loss of demand.” Overall, farmers are earning 6 percent less for their products than they were a year ago.
Though pandemic aid has helped farmers withstand persistently low prices, “policy changes are needed to address the causes – rather than simply the symptoms – of a broken farm economy.” One way to do this is through a supply management system that would balance farm production with consumer demand. This not only would have helped producers, but it likely would save taxpayer money as well. “If a reserve system had been in place between 1998 and 2010 for major commodity crops,” Larew remarked, “it would have reduced government payments by nearly $100 billion while net farm income would have remained about the same.”
Read Larew’s full testimony here
and watch a recording of the hearing here