Blog for Rural America – Too Big to Fail
The recent bailout of mortgage giants Fannie Mae and Freddie Mac was justified by claiming they were “too big to fail.” The reason they are “too big to fail” is they are simply too big, and we let them get that way. What should be said, however, is they are too big to continue in their current form.
This is important to note because we are approaching the point where “too big to fail” will apply to agriculture. Meatpacking is the most obvious example. Three companies will likely soon control over 70 percent of the beef processing capacity in the U.S. What do you think would happen if one of these companies were to threaten bankruptcy and liquidation?
It’s no different when it comes to the seeds farmers plant every year. Monsanto and DuPont control an enormous share of the seed market. And we are headed toward the “too big to fail” dilemma in grain production.
Why should the sustainable agriculture community care? Because the inherent unsustainable paradoxes of industrial agriculture will perpetuate themselves forever if the “too big to fail” model is applied. There is an assumption among many that industrial agriculture will topple as a result of its own ecological hubris. But if industrial agriculture is “too big to fail” the government will always step in.
Thankfully, there is a solution: break these companies up. Just as we did with AT&T (and came close to doing with Microsoft) we should do with industrial agriculture behemoths. But if we sit around and wait for the subprime crisis of agriculture, you can be sure the calls for government intervention will sound the loudest from those who despise government regulation today.
Source: Excerpted from a post on our Blog for Rural America. Read the full post at www.cfra.org/blog/2008/07/31/too-big-fail
This is important to note because we are approaching the point where “too big to fail” will apply to agriculture. Meatpacking is the most obvious example. Three companies will likely soon control over 70 percent of the beef processing capacity in the U.S. What do you think would happen if one of these companies were to threaten bankruptcy and liquidation?
It’s no different when it comes to the seeds farmers plant every year. Monsanto and DuPont control an enormous share of the seed market. And we are headed toward the “too big to fail” dilemma in grain production.
Why should the sustainable agriculture community care? Because the inherent unsustainable paradoxes of industrial agriculture will perpetuate themselves forever if the “too big to fail” model is applied. There is an assumption among many that industrial agriculture will topple as a result of its own ecological hubris. But if industrial agriculture is “too big to fail” the government will always step in.
Thankfully, there is a solution: break these companies up. Just as we did with AT&T (and came close to doing with Microsoft) we should do with industrial agriculture behemoths. But if we sit around and wait for the subprime crisis of agriculture, you can be sure the calls for government intervention will sound the loudest from those who despise government regulation today.
Source: Excerpted from a post on our Blog for Rural America. Read the full post at www.cfra.org/blog/2008/07/31/too-big-fail
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