THE WAY FORWARD - Foodopoly: The Battle Over the Future of Food and Farming in America - page 183

This does not mean that we should not be excited by the healthy food projects that are being organized
around the country. Food hubs, food circles, farm to school programs, farmers' markets, CSAs, and all of
the other inspirational projects around the country are building the case for a new food system. They are
creating community by educating and inspiring people to appreciate locally grown food and the farmers
that produce it. Combined with advocacy for addressing the root causes of the dysfunctional food system,
these grassroots self-help projects can be a powerful tool for good. But rebuilding the local and regional
food system that can serve all Americans cannot be done without addressing consolidation and making
federal policy changes.
Increasing Access to Healthy Food
Besides setting the rules for how agriculture markets will work, Farm Bills create programs that help create
access to fruits and vegetables. One popular prescription for our broken food system is to divert money
from the commodity programs to the “specialty crops” title, which covers fruits and vegetables. In past
Farm Bills, money for fruits and vegetables has been misspent. For example, the Alliance for Food and
Farming received a $180,000 grant to “correct the misconception that some fresh produce items contain
excessive amounts of pesticide residues,” in an effort to rebut the Environmental Working Group's “Dirty
Dozen” list of the twelve most pesticide-contaminated fruits and vegetables.
In future Farm Bills, more guidance is needed in the specialty crops title to ensure that the money and re-
sources go toward supporting small and medium-size fruit and vegetable farmers instead of just the largest
players in these industries. Programs that support specialty crops and sustainable, organic, or diversified
production of these crops should also be included in other titles, such as research and conservation, which
have focused predominantly on commodity crop and livestock production.
However, to really promote more access to fruits and vegetables, the consolidation of the retail grocery
industry needs to be addressed. As we have seen elsewhere in this topic, four grocery chains dominate the
U.S. market. Academic studies have found that higher levels of local retail concentration are associated
with higher grocery prices. These retailers are exerting their market power over the produce industry, caus-
ing consolidation down the entire supply chain, all the way to the growers.
The retail chains favor the largest suppliers, who can best negotiate with the retailer and who then pass
on the cost-cutting pressure to their farm suppliers. Produce packers and shippers are becoming larger
and more consolidated to match the size and demands of large chains such as Walmart. An empirical
USDA study found that retailer market power enabled supermarkets to push the prices paid to shippers
of grapefruit, apples, and lettuce below the prices they might receive in a functioning competitive market,
and revealed that consumer retail prices were higher than “purely” competitive prices for apples, oranges,
grapefruit, fresh grapes, and lettuce. Enforcing and strengthening antitrust law would go a long way toward
creating more affordable access to fruit and vegetables.
Additionally, to date there has been little analysis of anticompetitive behavior by the largest produce
packers, from Dole to Earthbound Farm. An investigation should include an examination of the terms of
company contracts with growers and their impact on crop production. The majority of processed produce,
fresh fruit, fresh vegetables, sugar beet, and tobacco production is done under some form of contract, and
a significant percentage (about a fifth) of many commodity crops are grown under contract. The USDA
should survey and study contract crop producers, their contracts, and the impact of vertical integration on
farmers and the marketplace, with special emphasis on the crops with the highest shares of contract pro-
duction.
Not only does the shape of the produce industry affect the cost and composition of the fruits and ve-
getables available in grocery stores, it also dictates the end price paid by the consumer. The concentrated