Today, Farm Action, IPES-Food, and dozens of other academics, labor groups, faith groups, anti-poverty groups, and farm groups, including NETWORK Lobby for Catholic Social Justice, Oxfam America, R-CALF USA, and the Farm and Ranch Freedom Alliance, sent a letter to Vice President Kamala Harris applauding her proposed food price gouging ban and her pledge to crack down on food industry mergers.
40 years of lax antitrust enforcement has led to a critical point in which urgent action must be taken to address some of the highest levels of food and agriculture market concentration in U.S. history. As historically high food prices hit Americans’ pocketbooks, Harris’s proposal provides an opportunity to build on and expand the Biden-Harris administration’s work to reverse the harm caused by decades of consolidation.
“Economists find that market abuses — such as price gouging and wage fixing — are likely to occur when the top four firms control more than 40% of the market. Concentration levels surpass that percentage in almost every food and agriculture sector, from seeds, to meat processing, to retail grocery,” the letter states.
“Because there are so few corporations in any one sector, they no longer need to compete with each other for market share; rather, they work in concert to limit supply and set prices,” the letter continues.
The letter highlights the real-world impact of these rampant market abuses on all Americans. These corporations squeeze farmers at every angle, charging them more for inputs like seeds and fertilizer while paying them less for their products — and often using supply chain disruptions as excuses to further hike prices for farmers. For example, in 2021, fertilizer prices spiked to all-time highs, with nitrogen-based fertilizer prices increasing 159-210% from the year prior. Fertilizer corporations’ own financial statements disproved their excuses about higher costs and supply chain issues.
America’s consumers are forced to keep staples off their grocery list as a result of excessively high prices.
“As powerful food corporations get away with raising prices well beyond any rise in production costs, Americans are struggling to afford to feed their families. A recent USDA study found that 13.5% of U.S. households were food insecure in 2023, marking an increase for the second year in a row,” the letter reads.
Meanwhile, workers suffer the consequences of rampant food system mergers firsthand in the form of low wages.
The letter’s signers conclude that the U.S. needs robust antitrust policies and enforcement throughout the entire food system to begin to undo this damage and urge Harris to continue this vital work.
“As a farmer, corporations are charging us more for what we need to do our job while paying us less for what we produce,” said Joe Maxwell, chief strategy officer for Farm Action. “Corporations can get away with price gouging because they no longer have to compete for market share due to how few companies are in each sector.”
Raj Patel, IPES-Food panel expert and professor in the Lyndon B Johnson School of Public Affairs at the University of Texas, Austin said: “Our food system is more Monopoly than marketplace. A few giant players have rigged the rules in their favor, and Big Food has used the pandemic and recovery to hike food prices far in excess of costs. We’ve written to Vice President Harris today to urge her to stand firm against the corporate stranglehold on our food system. A serious plan to tackle price gouging will also support unions, farmers, and sustainable food, putting an end to the profiteering that’s unfairly driving up food prices for American families.”
Media Contacts:
Emma Nicolas, Farm Action, enicolas@farmaction.us, 202-450-0094
Robbie Blake, IPES-Food, robbie.blake@ipes-food.org, +32-491-290096
