Corporate Control of Rural Economies Revealed by COVID

The coronavirus pandemic has revealed the absolute economic dependency of farming communities on the corporately controlled agri-food system. Producers have been forced to euthanize animals and destroy crops while retail food prices have skyrocketed and lines of cars stretch for miles at food pantries. These are but symptoms of much deeper systemic problems that have been degrading and depleting the economic resources of rural communities for decades. If rural responses to reports of sickness and death have seemed less sympathetic than others, this may reflect a subliminal association of meat packing plants and urban business centers with systematic oppression. Rather than calling for a return to “business as usual,” people in rural communities should be declaring their independence from corporate colonization.

As I have explained in previous papers and presentations, the term “economic colonization” is typically used to refer to neoliberal economic development in nations that were previously colonized politically. Rather than colonization by foreign governments, economic colonization today is carried out by multinational corporations. In rural America, economic development is following the same pattern of economic colonization of nations, with similar negative consequences. Perhaps nowhere is this phenomenon more evident than in traditional farming communities where large, corporately-controlled factory farms have displaced small, independent family farms.

On Sunday, April 26, Tyson Foods ran a full-page ad in major newspapers declaring that “the food supply chain is breaking.” Several large meat processing plants had been forced to close due to COVID-19 outbreaks among employees. The ad apparently was intended to garner public support for the April 27 Executive Order by President Trump to keep packing plants open. That being said, the coronavirus crisis does have the potential to seriously disrupt U.S. food systems. According to an AP report by David Pitt, the 15 largest pork packing plants account for 60% of total production. One closed plant was killing 20,000 hogs a day. So, when several plants of this size shut down, it disrupts the entire “supply chain.” The nation’s pork processing capacity was reduced by 25% for one particular week. Beef slaughter was also down 24% for a week. Most plants have only been closed for a few days to clean and disinfect, make changes to better protect their workers, and then have reopened--or plan to do so as quickly as possible. Those plants, like the entire food system, are designed for maximum efficiency and thus have little flexibility or ability to “social distance” or do anything other than stop and restart the “food assembly line.”

In their relentless pursuit of economic efficiency, the large meat processor and distributors have essentially removed all redundancy and resilience from their operations, placing entire sectors of the agri-food system at risk. Today’s livestock/meat sector runs pretty much like a factory assembly line, beginning with breeding stock genetics and ending at retail food markets—from conception to consumption. For fresh vegetables, the assembly line begins with seeds and ends with salads. Whenever there is a disruption in processing or any stage or station of production, the whole assembly line must be shut down. The basic problem for producers and for rural economies is that hogs, cattle, and chickens can’t be turned on and off like machines. They just keep growing and producing meat, milk, and eggs. Likewise, vegetables just keep on growing until they “go to seed.”

Problems are further complicated by the essentially separate assembly lines for supermarkets, restaurants, and institutional food service markets. During the current crisis, the restaurant and institutional sectors have been closed while the supermarkets have remained open. The large meat packers and vegetable processors have been largely unable to shift production from one type of outlet to another because of highly specialized handling, processing, and distribution facilities. So, producers have been killing flocks of hens that were producing for the institutional liquid egg market while there has been a scarcity of eggs in the supermarkets. Others have been plowing up vegetables that were destined for the restaurant market while supermarket shelves for fresh produce were empty. Dairy farmers are dumping milk destined for closed schools, while kids obviously still need milk.

Virtually all production in these sectors is either under contract or essentially committed to specific processing plants. There are no open markets or independent processors left that can accommodate the number of animals that come out of today’s large confinement animal feeding operations or CAFOs. The same is true for large-scale commercial vegetable production. Large independent producers are essentially locked in as well because the plants where they usually sell are expecting their production and other plants in their area are scheduled to run at capacity without their production. So, when a particular processing plant shuts down, the animals or produce scheduled for that processor are left without anywhere else to go. So, vegetable growers plow up crops before they “go to seed.” Contractors euthanize their producers’ hogs and chickens or cancel contracts leaving it up to the contract growers to get rid of the animals.

There are no open markets left where large numbers of independent producers and buyers meet to negotiate a fair market price that would result in the allocation of agricultural commodities to where they are needed. There are no local processing facilities that can accommodate more than the limited number of food crops or animals that are produced by local farmers for their families or a few local customers. Those facilities are currently running at capacity because of market failures elsewhere. Most of the local restaurants, schools, hospitals, and institutions are endpoints in corporately owned or contracted supply chains and have little if any freedom to access surplus local production.

The COVID-19 pandemic has revealed that neither farmers, food service workers, consumers, nor local governments in rural areas have any degree of control over their local agri-food economies. Their economic well-being depends entirely on the decisions of a few large corporations that have no legal responsibility other than to maximize profits for the benefit of their stockholders. People in rural communities are led to believe they have no choice but accept corporate control. They are told that to be economically competitive farmers must produce at a scale that can be accommodated only by the corporately controlled systems of processing and distribution. To achieve the economies of scale necessary for economic survival, producers are often forced to borrow large sums for buildings, sophisticated equipment, and industrial technologies, which results in even greater corporate control or rural economies.

As with other kinds of industry, the industrial farming systems imposed by corporate domination invariably erode and degrade the fertility of the soil and pollute the soil, air, and water with chemical and biological wastes. Corporate production contracts transform farms into biological factories and replace thinking, caring farmers with tractor drivers, cow milkers, and hog house janitors. As with earlier political colonization, once industrial economic development has depleted the resources of one area, the corporations will move on to other areas with unexploited resources and people who are desperate for work. Economic colonization will leave rural communities with depleted soils and aquifers, streams, and groundwater polluted with agricultural chemical and biological wastes, and farmers who no longer know how to farm.

The COVID-19 pandemic has clearly revealed the economic colonization of farming communities by multinational agribusiness corporations. This same dependence exists for other economic sectors of rural economies as well. Rural communities are rapidly losing the resilience they will need to cope not only with future pandemics but also with global climate change, growing social and economic inequity, and other degenerative symptoms of systematic economic extraction and exploitation. Remnant rural cultures have survived thus far through fierce independence and defiant resistance. Ironically, the independence and resistance that have sustained these remnant rural cultures in the past have become major obstacles to their future survival. People in rural areas must now find ways to succeed together or they most certainly will fail separately.

One logical way to begin healing the wounds of corporate colonization of the agri-food system is by creating food systems. Sustainable, community-based food systems could eliminate rural hunger and provide quality employment opportunities in rural areas while restoring and regenerating the resilience and productive capacity of local natural and human resources. Community-based food systems could bring people together around their common interest in wholesome, nutritious, sustainably produced foods. Regardless, the last best hope for people in rural areas is to work together rather than separately—to choose cooperation over competition and community sustainable development over corporate economic development. The COVID-19 crisis reveals the need for rural people to declare their interdependence with each other and their collective independence from corporate colonialism.

John Ikerd