The Hidden Side of Agribusinesses
- Tarun Thukkaram
- Jan 8, 2025
- 6 min read
What is an agribusiness:
An agribusiness is a network of industries involved in all stages of agricultural production. Another way of understanding it is that an agribusiness is a business that oversees all the steps from farm to table. This includes everything from the supply of seeds, fertilizers, and machinery to farming itself and finally to the processing, distribution, and marketing of the finished products. Agribusinesses play a crucial role in ensuring the efficiency and sustainability of the global food supply chain, making sure that agricultural products reach consumers. Examples of these large corporations include Tyson Foods and Nestle.
Controversy of Agribusiness:
While crucial to the global food supply, agribusinesses are criticized for practices that impact farmers negatively. Since these large businesses have tremendous power over the markets, they can often dictate terms and prices for farmers, which usually results in maximum profits for the company while the farmer receives the losses. Due to the large conglomerates controlling all aspects of production, from the seed to the machinery, farmers can pay increased prices for the supplies and receive lower prices for their products. Additionally, a handful of agribusinesses control most of the seed, fertilizer, and other supplies, meaning that farmers have no option but to pay the high prices dictated by the businesses. Due to the lack of control over what they produce, the corps can decrease the biodiversity and make the harvest more susceptible to disease. Due to monocropping, the genetic variety of the harvest decreases, and monocropping can lead to excess nutrient depletion. This benefits agribusiness as they can sell their fertilizer and squeeze every last penny out of farmers. Soil erosion from agricultural methods, as well as pesticide runoff, can tamper with the water supply and even lead to eutrophication, which is where an excess of phosphate and nitrogen enter a body of water and can cause an algae bloom, basically creating a dead spot in the water where life cannot exist. However, agribusiness is also influenced by governments seeking development in their countries. According to the Center for Economic and Policy Research, in Kenya, for example, the government attempted to shift agriculture toward agribusinesses; however, this significantly reduced farmers’ income. Despite the increase in agribusinesses, the farmers faced losses due to the agribusiness dominating the market and dictating terms for maximum profit at the farmer’s expense.
How can we fix it:
Promoting sustainable agriculture, incentives, fair market pricing, and enforcing policies protecting small farmers can help alleviate farmers’ troubles. Sustainable agriculture practices include crop rotation, using perennial crops that can be grown and harvested year-round, and using integrated pest management, which reduces reliance on traditional pesticides. Although sustainable agriculture may lower costs, incentivizing farmers to use agribusiness supplies like seed and fertilizer can indirectly lower costs for farmers and consumers. Providing grants for these purchases from the government can help offset the farmer’s costs, which can lower prices for the consumer. Enforcing fair market pricing by the government is a way to ensure that agribusinesses provide fair pricing to the farmers. It can reduce their influence in the market and allow the government to have a say in dictating prices on behalf of the farmers as well. Enforcing laws that shield small-scale farmers from agribusiness is, by far, the most critical method of safeguarding farmers from the adverse effects of agribusiness. At the end of the day, this helps the customer by promoting competition and thriving local marketplaces. Since smaller farms must compete with larger companies in local markets, where they can typically offer their goods for reduced prices, this can help eliminate the monopolistic impression that agribusinesses have. Additionally, promoting sustainable agriculture in local areas can lessen dependency on agribusinesses and foster more local agriculture-dependent communities. In addition to promoting sustainable farming practices, programs like farm-to-table initiatives, which assist smallholder farmers by putting them in direct contact with consumers, can expand market opportunities. In addition to helping farmers, this kind of arrangement enhances community well-being and food security.
Promoting sustainable agriculture, incentives, fair market pricing, and enforcing policies protecting small farmers can help alleviate farmers’ troubles. Sustainable agriculture practices include crop rotation, using perennial crops that can be grown and harvested year-round, and using integrated pest management, which reduces reliance on traditional pesticides. Although sustainable agriculture may lower costs, incentivizing farmers to use agribusiness supplies like seed and fertilizer can indirectly lower costs for farmers and consumers. Providing grants for these purchases from the government can help offset the farmer’s costs, which can lower prices for the consumer. Enforcing fair market pricing by the government is a way to ensure that agribusinesses provide fair pricing to the farmers. It can reduce their influence in the market and allow the government to have a say in dictating prices on behalf of the farmers as well. Enforcing laws that shield small-scale farmers from agribusiness is, by far, the most critical method of safeguarding farmers from the adverse effects of agribusiness.
At the end of the day, this helps the customer by promoting competition and thriving local marketplaces. Since smaller farms must compete with larger companies in local markets, where they can typically offer their goods for reduced prices, this can help eliminate the monopolistic impression that agribusinesses have. Additionally, promoting sustainable agriculture in local areas can lessen dependency on agribusinesses and foster more local agriculture-dependent communities. In addition to promoting sustainable farming practices, programs like farm-to-table initiatives, which assist smallholder farmers by putting them in direct contact with consumers, can expand market opportunities. In addition to helping farmers, this kind of arrangement enhances community well-being and food security.
The biggest thing we, the people, can do is to support local farms, establish community gardens, invest in local businesses and farms, and spread awareness around this issue. Towns and cities can decrease their reliance on commercial farms and instead shift it towards local farms. This can result in better quality food and prevent one more farm from joining the agribusiness empire. Any support the community can provide is crucial to maintaining the independence of local farms. Establishing community gardens could have similar effects, but instead of supporting the local farms, they can make communities self-sufficient and decrease the reliance on agribusiness products.
Another way of reducing dependence on them is through “adopting” farms where communities can adopt a farm and source all their produce and other food products through that farm. This can provide the community with fresh produce and the farm competition against the agribusinesses. Spreading awareness about the situation of local farms can allow more people to be informed about the food that they consume and the process it has gone through. As more people gain awareness of the situations farmers and local farms are in, the support of the people can be the catalyst that allows new policies to be enacted to limit agribusinesses’ control over food production. Upton Sinclair’s book “The Jungle” exposed the working conditions of food processing plants in the early 20th century. This book reached the common person, and soon, everyone became concerned about what was in their food. This, in turn, got the Pure Food and Drug Act passed in 1906. This serves as an example of how bringing awareness to a topic can lead to change. Bringing awareness to the farmer’s situation can bring change and hope to their lives.
In conclusion, agribusinesses can over-dominate the industry and unfairly dictate terms, resulting in losses for the farmer. The farmer pays the price as they do not have enough bargaining power against the corporation. Agribusiness can force farmers to purchase a specific type of seed and plant a particular type of crop, restricting the farmer’s freedom. After all this, the farmer still has to sell their crop back to the agribusiness, usually at a loss. Actions can be taken to alleviate this problem, including the government enforcing fair market pricing, sustainable agriculture to lower costs and increase yield, and the government limiting the power of the agribusinesses by assisting local farmers.
References
Holmberg, S. R., & Freed, Z. (2020, July). FIGHTING MONOPOLY POWER. ILSR. Retrieved December 1, 2024, from https://ilsr.org/fighting-monopoly-power/food-farming/
Kiezebrink, V. (2024, January 30). Hungry for profits – Monopoly power in global agriculture. SOMO. Retrieved December 1, 2024, from https://www.somo.nl/hungry-for-profits/
Marsh, J. (2023, April 26). How Overfarming Affects the Environment. Environment. Retrieved December 1, 2024, from https://environment.co/what-is-overfarming/#:~:text=The%20best%20way%20farmers%20can,What%20is%20this?&text=This%20can%20give%20the%20soil,and%20avoid%20erosion%20or%20degradation.
Piñeiro, V., Arias, J., & Dearlove, H. (2021, February 24). HOW TO ENCOURAGE FARMERS TO ADOPT SUSTAINABLE AGRICULTURE. Policies, Institutions and Markets. Retrieved December 1, 2024, from https://pim.cgiar.org/2021/02/24/how-to-encourage-farmers-to-adopt-sustainable-agriculture/
Tenreyro, S., & Dhingra, S. (2020, April 14). The impacts of agribusiness-led development on farming incomes and profits. CEPR. Retrieved December 1, 2024, from https://cepr.org/voxeu/columns/impacts-agribusiness-led-development-farming-incomes-and-profits
Very informative!
I didn't know there was so much behind the food we eat!
Amazing!! Great info!!
This was so interesting to read!
Wow!