• Dave
• July 28, 2021

Last week I assigned some homework, to read an article published in The Guardian about the concentration of America’s food industry. I am writing under the assumption that you read it, so if you weren’t able to get to it last week, click here. Here we go.

In 1971 President Nixon’s Secretary of Agriculture Earl Butz gave Soviet Minister of Agriculture Vladimir Matskevich a tour of the American Midwest. It was during that time that Matskevich expressed interest in purchasing American corn, soy, breeding stock, tractors, and other agricultural equipment.

What in the world does this have to do with the fact that there are just a hand full of companies that control America’s food supply today? Well, quite a lot. The Cold War had a profound effect on not only foreign relations but also domestic affairs: it impacted American culture, political ideology, the economy, and the role of the president. Agriculture and the food industry did not escape its clutches.

When Nixon came to office in 1969 he brought with him the policy of Détente, a relaxing of strained relations as a reaction against the traumatic events of the Cold War up to that point. Nixon and Henry Kissinger believed that improving trade relations with the Soviet Union would be a vital first step.

What became the 1972 US-Soviet Grain Deal was the most important trade agreement established during this period. Due to the inefficiencies of Soviet agricultural system and a series of droughts in 1971 and ’72 in the Volga region, the Soviets looked to the US for grain. Meanwhile, the US government for decades prior had been purchasing surplus grain from farmers in order to stabilize prices, so it had excess stockpiles of wheat and corn. The Nixon administration viewed this as an opportunity to bolster the American economy, promote better relations with Moscow, and establish Soviet dependence on US agriculture which could then be used as leverage to influence other foreign policy negotiations. All sounds pretty reasonable, right?

Ever since the New Deal, the federal government had payed farmers to leave sizable portions of their land fallow in order to limit supply. Large grain surpluses during the 1920s-30s caused prices to plummet, which led to and exacerbated the Great Depression. But in the early ’70s, Agricultural secretary Butz went on a campaign across the American countryside to bolster corn, soy, and wheat production. He was (in)famous for telling farmers to “plant from fencerow to fencerow” and to “get big or get out.” Many farmers were hesitant to reignite Depression-era conditions, but Butz assured them that excess grain could easily be sold to foreign markets, including to the Soviet Union. The USDA funneled money to the farmers who listened, and a policy that is supportive of large-scale, industrial agriculture became solidified.

In 1972, after the deal was signed, the US sold the majority of its stockpiled grain to the Soviet Union at low prices. This saved Soviet citizens from starvation (including my mom. Thank you Nixon), but it had far reaching impacts on the US. Because, 1972 and 1973 were very dry years in rural America. With the resulting low yields and with no stockpiles, the price for grain skyrocketed in 1973. Farmers viewed the high prices as an opportunity: they wholeheartedly took in Butz’s mantra of planting from fencerow to fencerow: they purchased more land, tractors, fertilizers, pesticides, and seeds and took on huge amounts of debt. It became a bubble. Overproduction ultimately led to plummeting prices in the 1980s and the FED’s war on inflation at the same time led to double digit interest rates. The bubble burst. Countless farms went under, and the few that survived acquired the others at a low cost, hoping to make up the falling prices with even more supply. Butz’s vision: the consolidation, “optimization,” and corporatization of agriculture came to fruition.

In 1862 President Lincoln signed the Morrill Act. This gave every state and territory 30,000 acres per member of congress to be used in establishing a “land-grant” university. Millions of acres, most of which were violently taken from Native Americans no less, were used to establish universities in order to promote and improve American agriculture. Penn State, Rutgers, Yale, and the University of California are all land-grant universities and they all have large, hugely influential agriculture departments. Well, conglomerates have infiltrated these institutions. Earl Butz, before becoming the Secretary of Agriculture, was the Dean of Agriculture at Purdue University, another land-grant school. He was also on the board of the Ralston Purina company, a large conglomerate (which has more recently been acquired by Nestle) that produces pet food, which, you guessed it, is made from corn and soy. I mention this because I want to highlight the revolving door that exists between our education system, the private interests of large-scale agribusiness, and the federal government. This is not unique to Butz: Monsanto, Dole, Tyson, Cargill, McDonalds, Coca-cola, Kraft, ConAgra, and Walmart donate millions to the agriculture departments of the Universities of Minnesota, Arkansa, Purdue, and California, Penn State, Iowa State, and Colorado State and currently have corporate representatives that sit on these departments’ advisory boards. These advisory boards are regularly consulted by the USDA for policy creation. And if I’d want to study GMO technology and how to create stronger pesticides and herbicides, it would be a good idea for me to apply to one of those schools.

The overproduction of corn and soy that resulted from Butz’s policies presented an opportunity for already burgeoning agribusinesses, especially Tyson, Archer-Daniels-Midland, and Cargill. The last two are currently among the largest companies in the world, and Cargill is the largest privately held company in the US and fourth largest in the world. In fact, the president of Cargill was involved in negotiations with the Soviets for the grain deal. Anyway, during this time, in the 1970s, and due to the overabundance of cheap corn, these companies started building a lot of feed lots to raise poultry and pork and chemical plants to produce and refine corn syrup and corn starch. This was very profitable. Their revenues and with it their power grew. And this power, combined with a couple disastrous Supreme Court and district court decisions in their favor (Cargill vs. Montfort and Haff Poultry vs Tyson Inc), allowed them to acquire smaller companies until the point where, between them and a few other companies that grew in parallel, they now control the majority of everything you see in Acme and other conventional grocery stores. That’s where we are today.

This is a crisis that came out of a complex history and is now normalized in our social-political-educational climate. What’s the solution? Well, it’s complicated, and I’m not sure that I have an answer for you other than the simple “buy local” mantra that I’ve repeated over and over again since I started this newsletter. First, I want to suggest how NOT to approach the solution.

Most articles I’ve seen written about this topic, including the one in the Guardian, identify capitalist food policies as the source of the problem. I believe that this is too simplistic. Politicians, pundits, and journalists often unconsciously or consciously throw around words that we have predisposed emotions towards in order to provoke, to garner attention, or to achieve some aim (“capitalism!” “socialism!” “communism!”). The words we use to label phenomena matter, and it’s important to clearly identify a problem in order to solve it. Labeling the problem “capitalism” may lead people to believe that the natural solution would be some brand of “socialism,” its polar opposite. But that’s no solution at all. History has shown time and time again that the interests of harmful agribusiness conglomerates and governmental administrations align. The ideologies of capitalism and socialism both emerged from and still work within the same framework, that of modernity, where fewer and fewer farmers produce more and more food to support one of its most defining characteristics: urbanization. There is nothing inherent in either any brand of socialism or capitalism that would lead to the return to local, regenerative food production. I think a new socioeconomic discourse needs to be popularized to fix the problem.

In any event I would distinguish “capitalism” from the events that I described above. The idea of capitalism emerged out of the European Enlightenment, when philosophers like Adam Smith and John Locke emphasized the importance of individual rights over and above centralized monarchal power. Adam Smith conceptualized capitalism as a means by which to enhance the rights of the individual and to decentralize political and economic power away from the aristocracy. Everything I described above involves the consolidation of power into fewer hands, creating some sort of weird neo-aristocracy. It’s not capitalism at all, especially because those judicial decisions I mentioned above essentially allowed Tyson and Cargill to engage in anti-competitive behavior by colluding with one another to fix prices. The labels of “monopolization” or “corporatocracy” are probably more fitting to describe agribusiness today.

This gives rise to the question, is there something inherent in capitalism the leads to monopolization and corporatocracy. Karl Marx and Vladimir Lenin certainly thought so, and they wrote extensively on how the stages of economic development naturally evolve from capitalism, to monopolization, to imperialism, to socialism, then to the final stage of classless communism. It echoes Adam Smith’s idea of the “invisible hand” unintentionally bringing about greater social benefits via enlightened self-interest. Capitalism is just as teleological as communism, they’re both highly idealistic, and they both were imagined by philosophers, not economists, who knew nothing about agriculture. Both Smith and Marx were wrong about anything inherently leading to anything else. History rather moves via real people with real motives and intentions responding to circumstances beyond their control (like droughts).

So, this brings me to two possible solutions. The first is to democratically elect people with the right intentions and the right motives into positions of central power. I don’t think that this would do much. Even President Biden’s executive order targeting large conglomerates, as mentioned in the article, will do little to solve the problem. The educational, private, and governmental interests are so entangled and normalized that only a dictatorship could unravel them. I believe in the separation of powers and our system of government, so we are not going down that route. Besides, never has there been a politician who is fully committed to regenerative, local agriculture. Some have mentioned it in passing, but I have no faith in any politician to effectively and competently make a difference.

The second solution is where I do have faith: it is via decentralizing power in the manner that Adam Smith imagined. Rather than shopping at conventional grocery stores, shop at your local farmers market and encourage your friends and neighbors to do the same. A farmers market is the purest example of capitalism that we have in this country. By supporting local farmers and food producers, we are taking power away from that centralized neo-aristocracy and decentralizing it into the hands of ourselves and a larger number of small farmers and food producers. There is a lot behind the phrase “buy local,” and I hope that everything I discussed gives it new meaning and greater appreciation.