Issue link: https://www.e-digitaleditions.com/i/1134511
farm finance farm406 12 ere is growing recognition of America's historically high levels of industry concentration, and it's looking like this will be a major issue in the 2020 presidential election. Most of the commentary has focused on big tech platforms like Amazon, Google and Facebook. But another sector that has seen significant concentration is also being targeted: agriculture. But first, a lile background. Some think that America is on the verge of a second antitrust movement. e first came in response to growing abuses by monopolistic firms during the "Gilded age", particularly in the oil and railroad industries. e Sherman Act of 1890 outlawed aempts by firms to monopolize markets and other anti-competitive behaviors, and several other anti-monopoly laws and judicial decisions followed. However, enforcement of these laws has severely lagged in the last several decades, as the Federal Trade Commission and Department of Justice (the two organizations in charge of enforcing antitrust laws) have consistently adopted the view that larger firms will achieve more efficiency through economies of scale, and that consumers will benefit through lower prices as a result. Significantly higher concentration across a wide range of sectors has been the result. ere is contentious ongoing debate about the various effects of industry concentration. One important paper from last year, for example, shows that wages tend to stagnate in areas with high employer concentration. e agricultural sector has been impacted by industry concentration more than most. A recent analysis by the Open Markets Institute argues that small farmers have suffered from the growth of agribusiness monopolies in several ways. e meat processing and dairy industries have become significantly more concentrated in the last few decades, and many farmers work in regions with only one or two firms to sell their output to, leaving them with lile bargaining power and lower prices. Similar problems exist on the input side, with a few large firms dominating the seeds (particularly aer the Monsanto- Bayer merger) and farm equipment industries. In addition to unfavorable prices, industry concentration on both the input and output sides oen lock farmers into unfavorable contract terms, such as the requirement that farmers cannot perform their own repairs on John Deere equipment. Grocery chains By Brock Smith Time to Break-up Agribusiness Monopolies?