All the heat wasn’t in the kitchen on March 17, when a group of chefs, led by AWA supporter Chef Bill Telepan, wore their traditional white jackets to Capitol Hill to push for increased funding for school lunches. Chef’s Day of Action, coordinated by the NYC Alliance for CNR (Child Nutrition Reauthorization), brought together celebrity chefs and school lunch reform advocates to urge Congress to provide an additional $4 billion in funding per year for school food programs. The Child Nutrition Reauthorization Act comes up every five years and this year President Obama has asked for an additional $1 billion per year. The Senate, however, is considering only authorizing $500 million per year—half of what the President has requested. Even $1 billion wouldn’t make much of a difference to the 30 million school children who depend on the National School Lunch Program for meals. And when you consider the size of the budget—$3.7 trillion—it’s pocket change. $1 billion only equals 17 ½ cents per day per child. The government reimburses schools $2.68 for fully subsidized lunches. The chefs say much more is needed to really make a difference. An increase in funding to $4 billion will provide an additional $0.70 per child. “We need school lunches to be about the best food, not the cheapest food,” says Chef Bill Telepan, who is also a board member of NYC’s Wellness in the Schools. “This is what we practice as chefs and we have a responsibility to bring the best food there is into schools.”
In a major move for the Obama administration, the US Department of Justice (Antitrust Division) and the US Department of Agriculture have opened an investigation into whether any illegal monopolies exist among the dominant agricultural companies.
The focus is primarily on three sectors: seed companies, beef packing and dairy. With a history of exemption from antitrust regulation, the industry as a whole has become extremely concentrated. This concentration is measured in terms of “CR4,” or concentration ratio (relative to 100%) of the top four firms in a specific food industry.
For instance, in beef packing, the top four companies (listed below with daily processing capacities) control 83.5% of the market.
1. Tyson (36,000 head/day)
2. Cargill (28,300 head/day)
3. Swift & Co. (16,759 head/day)
4. National Beef Packing Co. (13,000 head/day)
Source: Concentration of Agricultural Markets, April 2007, Mary Hendrickson and William Heffernan.
Similar levels exist in other agricultural sectors, including pork processing and genetically modified seed technology. This lack of competition has had serious implications for the independent producer; in any other industry it would be a red flag. Perhaps the recent banking crisis has shed some light? In the words of our friend at Rural Advancement Foundation International, Scott Marlow, “If they’re too big to fail, they’re too big. Enforce antitrust.” Spoken at Farm Aid this past October, his call to action challenged the audience, “Now is the time and here is the place. If not us, who, if not now, when?” Regardless of the cause of this shift in focus, we predict a heated debate and a wide range of opinions on the subject. To voice yours, follow the directions on the DOJ website to submit your comments in hard copy or electronic form.
You can also contribute to the discussion in person. As part of this investigation, a series of workshops will be held across the country to “promote dialogue among interested parties and foster learning with respect to the appropriate legal and economic analyses of these issues, as well as to listen to and learn from parties with experience in the agriculture sector.” A schedule of the workshops is listed below, please see the aforementioned DOJ website for detailed information and physical locations.
Dates, Locations and Topics
March 12, 2009 – Ankeny, Iowa
Issues of Concern to Farmers
Introduction to the workshops series with a focus on the issues facing crop farmers. Discussion topics may include seed technology, vertical integration, market transparency and buyer power.
May 21, 2010 – Normal, Alabama
Discussion topics may include production contracts in the poultry industry, concentration and buyer power.
June 7, 2010 – Madison, Wisconsin
Discussion topics may include concentration, marketplace transparency and vertical integration in the dairy industry.
August 26, 2010 – Fort Collins, Colorado
This workshop will focus on beef, hog and other animal sectors. Topics may include enforcement of the Packers and Stockyards Act and concentration.
December 8, 2010 – Washington, D.C.
This workshop will look at the discrepancies between the prices received by farmers and the prices paid by consumers. As a concluding event, discussions from previous workshops will be incorporated into the analysis of agriculture markets nationally.