E268: Why Corporate Control of Agriculture is Cause for Concern

How big is too big? When it comes to corporate concentration many observers raise concerns about the tech industry. However, in the new book, Titans of Industrial Agriculture: how a few giant corporations came to dominate the farm sector and why it matters, political economist Jennifer Clapp draws attention to the overwhelming shadow a small handful of transnational corporations cast over the global agricultural sector. Professor Clapp argues that these corporations hold concentrated power over the agricultural sector that keep industrial agricultural practices entrenched in patterns of production, despite the concerns of the social, ecological and health impacts to society. She explains how we got to this point and what it might take to make changes. Jennifer's work at the intersection of the global economy, food security, and food systems, and the natural environment, looks specifically at issues of global governance. She is currently a member of the International Panel of Experts on Sustainable Food Systems, and a member of the Scientific Advisory Committee of the UN Food Systems Coordination Hub. 

Interview Summary

Norbert - Jennifer, let's just jump right in and I'd love for you to help our listeners understand a little bit more about your book. You write about corporate concentration in the agricultural input sector. Can you explain what this involves and what products are we really talking about?   

Yes. The book is about what we call the agricultural inputs industry. And that's really four different product types typically, and maybe a fifth that we can talk about. So, one of them is farm machinery, and that's really referring to things like plows and tractors, harvesters, etc. That kind of machinery on the farm. The second industry is the fertilizer industry, which is all about, you know, the nutrients that we bring to the soil through fertilizer products like nitrogen, phosphorus, and potash. And the seed industry. That's another industry that is a key input for farmers. And then also pesticides. And when we talk about pesticides, we're referring to things like insecticides, chemicals that kill insects, but also chemicals that kill weeds and fungus. And so those are the four sort of big inputs that I talk about in the book. But also, the book covers a fifth input, an emerging input, which is data. And this is, especially as we're seeing the datafication and digitalization of farming. Increasingly data has now become a commodity that is bought and sold as an input into farming.

Norbert - Great. I have to ask, what drew you to the input industry? I mean, let's be honest, that's not the thing that most people get excited about. Why should we be concerned?

Yeah, that's a great question. I've actually had a very long interest in the seed in chemical industry. That goes way back to the start of my career because I did studies in agriculture for my PhD dissertation. But then I got quite interested in toxic waste and then that sort of drew me to this question of the global pesticide trade. And when I learned that, you know, oftentimes, like in the US there might be a banning of a pesticide that's no longer in use. But it was still being traded globally. And this, I found this very fascinating and how that industry worked. And that kind of drew me into understanding the connections between seeds and chemicals. And then when the digitalization of farming came along and in recent decades it became really clear that it wasn't just chemical and seed industry involved in that digitalization. It was also the fertilizer and the farm machinery sector. It made me want to understand the interconnections between these industries. I know it's like, maybe a bit specific, but they have huge consequences in terms of the way our food systems look like. And so that really drew me to understand where did these inputs come from? And why are they controlled by just a few large companies?

Erika - Jennifer, I want to ask you a question about why this sector, especially related to the inputs, is so important when we're talking about food systems. And especially their social and ecological dimensions. And specifically in the book, you tease out many of the social and ecological costs of inputs such as pesticides. Also the social and ecological consequences of even farm machinery. So it would be great if you could elaborate on their importance. 

Thanks, Erika. That's a great question and that's part of the reason why I was really drawn to study these inputs. Because I'm in a school of environmental studies, I'm very interested in these interconnections between food systems and environmental outcomes. I was really interested in learning more about where these industries came from, and as I was teasing out where they came from. And how they became dominated by such large companies, I also learned in much more depth about the ecological consequences of these inputs. I can just say a little bit about some of them because these consequences are so big that we almost forget to talk about them. They become embedded in the product itself. And so, one example is farm machinery. Farm machinery was originally seen as quite revolutionary and that it allowed farmers to harvest their fields much more quickly than they used to be able to before. But that also meant then that to make the equipment efficient and pay for them they might as well extend the size of their farm. And as farmers extended the size of their farm, in the US anyway, they moved west and displaced its indigenous people from the land, in terms of taking that land for farm production. But also, as farms began to consolidate and get larger, as mechanization continued, it also displaced others from the land. Poor farmers, black farmers, those who were renting land and didn't have access to their own. And so, people who were marginalized and we still considered marginalized in society today, were really being displaced from the land as a direct consequence of farm machinery. It's not that farm machinery is like necessarily something that we want to do away with today, but I think we need to recognize those historical connections. And really understand that when, you know, you see a book for a small child about farming and there might be a picture of a farmer and it's usually a white guy sitting on a tractor. We can forget that image has a lot of baggage associated with it in terms of displacement and inequality. And I think we need to recognize that. But it does not just stop there. There's also plowing disturbs the soil, heavy machinery compacts the soil so it can harm fertility of the soil as well. And the machinery part of the equation has long been a source of inequality in terms of being very expensive for farmers. It's been one of the main reasons farmers have often been driven into debt. Farm machinery might have been liberating in one sense to allow increased production, but it did come with costs that we should acknowledge.

We also need to recognize the ecological and social costs associated with the fertilizer industry. And this industry goes way back to the 1840s and we saw the rise of the guano trade. And we can think immediately of the working conditions of the workers who were digging the guano in the Chincha islands of Peru. And often they were coming from Asia and facing really harsh working conditions. But then when we saw the rise of synthetic nitrogen in the early 20th Century, the cost shifted in a way towards the cost of fossil fuels. The huge amount of natural gas used in the synthesis of nitrogen. And also, the climate consequences of the nitrous oxides that come from the application of synthetic nitrogen into the soil. So again, there's like enormous ecological and social impacts from that particular input.

Similarly, when we talk about seeds, the hybridization of seeds in the 1920s and 1930s also raise huge concerns about plant genetic diversity. And we know that in the last century or so we've lost around 75% of plant genetic diversity for crop genetic diversity. And this is because of the way in which we started to see the uniformity of the genetic makeup of seeds. The monocultural planting of seeds really reduced that kind of diversity. And then intellectual property protection on seeds that came with the hybridization of seeds also led to a decreased ability of farmers to save their own seed and exchange their own seed with their neighbors. So again, social ecological costs.

And finally, when we talk about pesticides, we have seen enormous issues with respect to pollution runoff. This kind of bioaccumulation of these toxic chemicals that have enormous health consequences.

So, all of these inputs have very large impacts in terms of their social and ecological costs. And we can even extend that to the issue of data today. There's a lot of concern about data platforms for digital farming where farmers are signing away the rights to the data that are coming from their own farms. And they don't have the kind of interoperability with other data sharing systems. And there's also a lack of clarity about who owns that data.

So again, there's big issues with respect to these inputs and how they are affecting both social and ecological dynamics within the food system. 

Erika - Thank you for helping us understand the social and ecological impacts of these inputs into the farming industry.

Norbert - This is a really rich conversation and I want to understand a little bit more. There's a big part of your text that's about the concentration in the input sector. What does it look like today and was it always this way?

That's a great question because it's almost a trick question because we tend to assume that this high level of concentration that we see today is something that's new. But what I found in my research is that the high degree of concentration actually has a long history that goes back about a century or more in some cases. And when we're looking at each of these sectors, the farm machinery, for example, is controlled. Most of the market is controlled by about just four firms. And they control around 50% of the global market. But when you look specifically at national markets in the US, for example, John Deere, you know, the largest company that makes farm machinery, it controls over 50% of the tractor market. So that's just one firm alone. It's similar dynamics when we look at fertilizer, seeds and pesticides and fertilizer, for example. Just two firms control a hundred percent of North American potash production. The four key companies control a large amount of the global fertilizer trade. In seeds, it's also very similar and in pesticides. In the seeds and pesticides that's especially interesting because since the 1980s and 1990s, the seed and pesticide companies actually merged with each other. We can't even say there's a set of seed companies and a set of chemical companies. It's actually seed and chemical companies. That's one set. And they control around 60% of the global seed market and around 70% of the global pesticide market. And that's really what prompted me to want to work on this book is that after 2015, there was a set of mergers in the seed and chemical sector that concentrated those firms even further. They used to be dominated by six firms. We used to call them the Big Six, and then they had major mergers where Bayer bought Monsanto, Dow and DuPont merged and formed Corteva. Syngenta group was bought by Chem China, and then bought by Sino Chem, a big Chinese chemical company. And then BASF bought up all the bits that the other companies were forced to sell to pass regulatory hurdles. And so, we ended up with a Big Four. And these companies produce both seeds and chemicals and have a quite an enormous impact in terms of their market dominance.

Norbert - Wow. This is really important and I think it's a topic that many of us who look at the food industry aren't paying attention to. And I'm really appreciative of you laying out this concentration that's taking place. Jennifer, when reading the book, I was really struck by the fact that this is not just a book about the farmers themselves and the farming industry and the companies that provide the inputs. But you also touch upon the role of universities and university science and scientists; and also the role of government in helping to fuel or seed innovation in this sector. And, you know, here I was hoping you could talk about this important role for universities and also the government given that we're in a current moment where we're seeing a retrenchment from investments by government, and also the ability of universities to continue to seed innovation. So I was hoping you could share some of your insights. 

Yes, it's certainly an interesting time on the landscape of spending on innovation and with a retrenchment of state pulling back away from supporting technological innovation and other innovations. And that's certainly true in the farm sector, and that's very different from the situation if we go back to the 1800s and see, as you mentioned, the role that the state played in terms of really trying to support innovation in these sectors. And what I argue in the book is that these firms, they got big in the first place, and they were able to consolidate in the first place, through a series of what I call market technology and policy factors. And it's kind of messy. I put them in these three big categories. But in terms of these market factors, that's what most people tend to think about when they think, 'oh, a firm got big. Maybe it's just more efficient. It's able to produce products more cheaply and therefore it just grew to be big.' And that's much more complicated than that of course. And that's because, as you said this role of technological change in which universities have played a really important role. And government support and throughout history in the US, a lot of the book focuses on the US because we have good information and data there. And the US set up the land grant college system really to support development in the agricultural sector. And that gave us, you know, a lot of the innovations that led to, for example, the hybridization of seeds. And the corporations that took up that innovation that the state supported through university research, those firms also work directly with universities in many instances, to have these kinds of collaborative relationships, to develop, herbicides, to develop seeds, to develop further farm machinery, etc. So that role of technological innovation is really important, and that innovation doesn't just come from nowhere. It doesn't just pop up. It doesn't just show up one day. Right? It comes from investment. Investment in universities and research and development. And so that has been a really important strand to develop this kind of industrial agriculture. And now we know from university research, etc., that there are some problems associated with it. Yet it's proving hard to get that kind of funding to spur a new transformation towards a more sustainable agriculture because we're not giving that kind of state support, and support to universities to do that research and innovative work to lead us towards more sustainable agriculture.

So, I think there's a lot there that we need to work on. And that's some of the recommendations that I make at the end of the book. Is that we need to shore up that kind of public investment in innovation, in alternative systems to address some of the problems.

So just let me tag on another question from that. Just what are the consequences then for having just a small number of firms dominating this sector and no longer having these investments in innovation?

Yeah, so what we're seeing increasingly as the state has pulled away from supporting agricultural research, is that most of that agricultural research now is being done by private corporations. And the big concern there is that as you have a smaller and smaller number of very large firms dominating in the sector, their incentive to innovate actually weakens. It weakens because if there's not a lot of players in the marketplace that are doing innovative work, there's just not a lot of competition. And so why would you innovate if you don't have to? If you're already a monopoly and you're able to sell your product, there's not a lot of incentive to innovate in a way that might then decrease the sales of your old products. And so, what we're seeing is a shift in innovation from the private sector, away from these kinds of transformative innovations and much more towards what we call defensive innovations. They're innovating in ways that actually enable them to sell existing products. And many would say that the rise of agricultural biotechnology was actually that kind of a defensive innovation. It was modifying seeds to make them resistant to the application of existing herbicides. And so there was innovation, but it was actually spurring further sales in an existing product. And part of the reason for that was that it became very expensive for these companies. The regulatory hurdles became quite expensive for them to develop new herbicides. And so, they were like, 'oh, it's cheaper and faster to work with seeds. Why don't we do it this way and then we'll continue to sell the herbicides.' Which by the way, got them a lot more profit than selling the seeds. So that's why they bought up a lot of the seed companies and really consolidated in that period.

And there's a longstanding concern among competition regulators, the regulators that try to prevent a huge concentration in the economy, about this question of innovation. And it's very relevant in the agricultural sector. There's this sense that if you allow too much concentration to happen, it can dampen that innovation and that takes away that dynamic, innovative spirit within the sector. It's definitely a big concern.

Norbert - Jennifer, I really appreciate this. Earlier in my career I was a part of some research related to biotechnology and innovation that happens there. And one of the things that I learned about is this idea of building thickets. These sort of patent thickets where you create a series of patents that actually make it difficult for others to be able to innovate in that same way. There are these real challenges of this kind of defensive innovation. And that's just one of the challenges that you bring up in the book. And I am interested in understanding, as sort a last question, what are some of the recommendations? You mentioned public sector funding of agricultural research and many of my colleagues in my discipline have said we need more research for agriculture. Are there other areas of recommendation to address some of the concerns you raised in the book?

Thanks, Norbert. Yes, definitely. And I definitely do call for greater public support for agricultural research. And that's something within the agricultural sector. And I think there we really need to focus efforts on alternative agricultural production methods. For example, agroecology, which tries to reduce the amount of external inputs, not to increase them, by using nature's own processes to achieve the same functions of diversity and pest control, etc. And what's troubling is that when the firms don't have that incentive to innovate, you know, they're definitely not going to innovate in ways that would reduce their profits. They're not going to do that. The public sector has to step in if we want to see that kind of research done. But we also need measures outside of that food and agriculture system that will benefit food and agriculture. One area is stronger antitrust policies. Policies that would prevent further mergers and acquisitions that would allow those firms to continue to get bigger and bigger. Those antitrust policies are used largely, we've got merger guidelines, for example, in North America. And in Europe, when two firms want to merge, they have to get regulatory approval to do so. And those merger guidelines really walk the regulators through what would be a merger that might dampen competition, that might weaken innovation, you know, that kind of thing. It's important that we make those rules stronger. They had become progressively weaker after the 1980s. There was this move in the regulatory space that was this kind of idea that maybe it's okay if firms get really, really big because they can benefit from economies of scale. Maybe they can bring down consumer prices and maybe we shouldn't worry so much about these other areas of control. And there's been a bit of a shift in view around this in recent years where we've seen the rise of concern about these very big companies, especially with what we see with the big tech companies taking control over all these aspects of our lives. And people are saying, wait a minute, maybe we don't want to have this just a few companies controlling so much of our lives. And so, you know, we need to think about other ways to enforce antitrust policies to make them stronger so that we foster more competition and not just focus on whether something's more expensive or not.

And that's, I mean, it's a bit of a hard thing to explain to some people. Obviously, people want to see lower prices. But the idea that we have to get across is that when competition dies, when it's not there, that's when the monopoly can really raise prices. And so, we need to have that competitive marketplace in order to spur innovation and also to bring prices down. That's really important and that's a kind of agenda item that's involves food and agriculture, but it's outside of the food and agriculture sector. It encompasses more. And another area where I think we can do more is to reign in the kind of undue corporate influence on the policy process. And that's arising out of a concern that as we're seeing fewer and fewer dominant companies in the food sector, and in other sectors as well, they tend to gain more political power to influence the policy and governance process. And so, what we're seeing is heightened lobby activity. Sponsoring of scientific studies and yes, coming back to the question about universities. But as corporations get bigger, they can shape science in ways that can help them win regulatory approval for their products. We need broader policies on conflict of interest to prevent large companies from taking over the policy process. And I know that's a really salient topic in the US right now, given what's going on in the broader politics. And I think it is a broader politics issue that needs to be seriously addressed if we want to support a more transformative form of food and agriculture. These kinds of policies like stronger antitrust, better conflict of interest policies, and also support for public agricultural research are all really important steps. I don't think any one of them on their own is going to do the trick in terms of spurring this desperately needed transformation in our food systems. But together, I think, they can bring us closer to that goal.

Bio

Jennifer Clapp is a Tier I Canada Research Chair in Global Food Security and Sustainability and Professor in the School of Environment, Resources and Sustainability at the University of Waterloo, Canada. Dr. Clapp is currently a member of the International Panel of Experts on Sustainable Food Systems (IPES-Food) and a member of the Scientific Advisory Committee of the UN Food Systems Coordination Hub. From 2019-2023, she was a member of the Steering Committee of the High Level Panel of Experts on Food Security and Nutrition (HLPE-FSN) of the UN Committee on World Food Security, and served as Vice-Chair of that body from 2021-2023. Dr. Clapp has published widely on the global governance of problems that arise at the intersection of the global economy, food security and food systems, and the natural environment. Her most recent research projects have examined the political economy of financial actors in the global food system, the politics of trade and food security, and corporate concentration in the global food system. She has also written on policy and governance responses to the global food crisis, the political economy of food assistance, and global environmental policy and governance. Her most recent books include Food, 3rd Edition (Polity, 2020), Speculative Harvests: Financialization, Food, and Agriculture (with S. Ryan Isakson, Fernwood Press, 2018), Hunger in the Balance: The New Politics of International Food Aid (Cornell University Press, 2012), Paths to a Green World: The Political Economy of the Global Environment, 2^nd Edition (with Peter Dauvergne, MIT Press, 2011), and Corporate Power in Global Agrifood Governance (co-edited with Doris Fuchs, MIT Press, 2009). Her forthcoming book, published with MIT Press (2025), is titled Titans of Industrial Agriculture: How a Few Giant Corporations Came to Dominate the Farm Sector and Why It Matters.