Fears Of Corporations Aired
At Ag Concentration Hearing

WASHINGTON —(AP)— Independent family farmers will be replaced by a ``seamless system'' where big companies produce everything from seed to the shelf unless steps are taken to halt the pace of consolidation in agriculture, a farm group warns.

``We believe concentration will do more to influence the future structure of agriculture in the United States than the next farm bill,'' Leland Swenson, president of the 300,000-member National Farmers Union, told the House Agriculture Committee Thursday.

``Many predict that we will soon have a system where three or four companies control the food and fiber system at every level, from the seed supply until the time it reaches the consumer,'' Swenson said.

The hearing was the latest on the concentration issue. Concerns about the number of mergers in agriculture have risen since Cargill Inc. of Minnetonka, Minn., the nation's No. 1 grain company, announced plans in November to buy the worldwide operations of second-ranked Continental Grain Co.

With already low prices in both livestock and commodities markets, many lawmakers and farm groups worry that the Cargill-Continental deal, which is being reviewed by the Justice Department, will further depress prices for farmers.

``We can't continue to put the squeeze on those at the bottom of the production chain,'' said Rep. Charles Stenholm, D-Texas.

Harry L. Pearson, president of the Indiana Farm Bureau, said the American Farm Bureau is concerned that concentration could lead to inadequate market access but has not taken a position on the Cargill-Continental deal.

But the National Farmers Union, which has called for a moratorium on mergers until the impact on agriculture is determined, painted a dimmer picture of what it calls ``the industrialization of agriculture'' in a study it released by a team of University of Missouri rural sociologists.

In the livestock industry, four large firms in each sector are slaughtering four out of five beef cattle, three out of four sheep, three out of five hogs and half of all chickens, the study said.

In fact, 95 percent of all chickens are processed under production contracts — a trend that concentration critics fear could stretch to other areas of livestock.

``The farmer becomes the grower, providing the labor and often some of the capital, but never owning the product as it moves through the food system and never making management decisions,'' the report said.

The report also raised concerns about a ``seamless system'' where companies control products from ``gene to shelf.'' Such clusters are already forming, the authors wrote, pointing to an alliance between Monsanto, one of the leading biotechnology firms, and Cargill.

Another example of a major food chain player is ConAgra, the report said, noting the company has subsidiaries along most links in the food chain.

Still, Mark Drabenstott, an economist who heads the Center for the Study of Rural America at the Federal Reserve Bank of Kansas City, told lawmakers that consolidation in agriculture is ``generally a positive trend'' that leads to lower-priced and higher quality food for consumers.

``Farmers face a simple test: Build new relationships or be left out of the game,'' Drabenstott said.