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Concentration of Agriculture Production has a Downside

By Matt McCallum
Publisher

The loss of the tart cherry crop across the nation is a terrible disaster for the growers and processors in the industry. The situation has made it very clear that the concentration in agriculture production is a very risky road we are traveling.

Remember when there were huge tart cherry crops that all growers lost money on? Unfortunately in the last 10 years many of the smaller producing states got out of the tart cherry business. Finally, the industry decided to bring back a marketing order to help flatten out the ups and downs of production.

Consolidation in the food industry has forced agriculture to consolidate to meet the increasing demands of the huge buyers. Growers are forced to sell their crop at a lower price because of the big stick these buyers yield. All a grower can do is increase yield and quality to keep the farm profitable.

Unfortunately, as everyone knows, this has forced the small to medium-sized producer out of business. Tart cherries used to be grown all over the nation and now Michigan grows 77% of total tart cherries in the United States because of the perfect growing climate and large processing capacity. And there doesn’t need to be as many growers because yields have increased 72% in the past 25 years.

This all makes sense in the new marketing order of the global economy - but there is a huge downside called a major crop disaster, like the one that wiped out the tart cherry crop this year. Now, instead of a surplus, the industry won’t be able to meet orders, processing plants won’t be able to operate, and the buyers won’t be able to fill their orders. More importantly - how will these growers survive a year with no income?

A futurist a few years ago warned of the consolidation of production areas across the globe. He said 80% of the world’s food supply is now grown in five areas of the world. If we had a major crop disaster in one area we would lose 20% of our production.

Many people say, “we can always find it somewhere.” I’m not so sure. Think about where many of the specialty crops are grown. California grows 71% of the peaches, Washington and Idaho grow 61% of the nation’s potatoes and Washington grows close to 60% of the apples. The consolidation of production is also true in corn, soybeans and wheat. This trend will only continue as the buyers get bigger and the world gets smaller.

So what did our government do to try and keep farmers profitable? Throw more money at the problem, without addressing the basic infrastructure problems. (Of course specialty crops only got a teaspoon of the money.) The Canadians got mad and threw more money at their farmers so they could compete against our “subsidized” farmers. It continues to be one unending cycle.

The United States and the world need to realize we could have a huge food problem in the future if this consolidation continues. We need to somehow sustain the small and medium farms. Direct marketing needs to be promoted more by USDA, state fruit and vegetable promotion boards and state governments. There has been some good government support of direct marketing, but the dollars need to be vastly increased. If you haven’t noticed, it’s getting much harder to find local produce anymore. The big chain stores seldom carry it, so there needs to be more outlets made available for growers who want to sell fresh produce.

Specialty crop growers also need to have a real insurance program. Waiting for a government disaster assistance check is like waiting for rain during a drought. It always comes too late and is never enough. The cherry growers that were so decimated by the crop failure might see a check, at the earliest, in 2003. By then, some will be out of business.

Let growers decide what kind of insurance coverage they need, make it affordable and let them use it as a tool for economic stability.

And no, I don’t believe we’ll ever get back to the 40,000 potato growers in the United States we had 40 years ago. (There are now less than 6,000). But, I do believe we’ve got to stop the bleeding at some point.

Let’s just hope that no other commodity has to go through what the tart cherry industry is experiencing and real changes to the system are made.


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