Farmers and consumers need an anti-monopoly agricultural policy

By Adrien Welsh  

Hundreds of agricultural producers demonstrated in Quebec City on December 6, calling on authorities to address the problems they faced. While last summer’s bad weather had a catastrophic effect on harvests and the farming community as a whole, it was merely the straw that broke the camel’s back.

Free trade

For decades, farmers have been paying the price of free trade deals, increased competition between producers, concentration of wealth and the power of monopolies over productive activities. As a result of this, along with agricultural policies that favour the largest operations, half of all farms in Quebec have been liquidated over the past twenty years.

Since the agricultural market has been increasingly liberalization through the USMCA and other free trade agreements, Quebec farmers have had to compete with their counterparts throughout North America including the United States.

While the average dairy herd size in Quebec is around 74 cows per farm, this figure rises to 300 in western Canada and 1,400 in California. To stay afloat, dairy farmers in Quebec have to pursue an intensive breeding model. They have to deal with policies which prevent breeding fewer than ten cows, and they have difficulty aid necessary to farm land of less than 100 hectares, which authorities deem unprofitable.

Of course, opening up to international competition poses a major threat to the supply management system, which is already operating on a just-in-time basis. This pressure further aggravated because US agriculture itself is heavily subsidized, being considered a matter of “national security,” while Washington describes supply management in Canada as unfair competition.

Other agricultural sectors are experiencing similar problems to dairy. For example, the exported-oriented policy of pork production means that only farms with more than 300 animals receive subsidies. Furthermore, international competition means that producers have no real guarantee of the cost price of their goods. In 2022, the average selling price of a pig was $250, while the average cost of production was $285, meaning that each pig was sold at a loss of $35.

Land prices

Added to the problems of free trade and competition are the costs of land, quotas and inputs. The price of land has doubled over the past 20 years – between 2021 and 2022 alone, it increased by 11 percent. The price of inputs, meanwhile, rose by an average of 30 percent over the past year. Quota prices are becoming prohibitive, costing about $240,000 for a micro-farm with 10 dairy cows and around $285 per laying hen.

As a result, farm debt in Quebec has jumped 115 percent since 2015 and now stands at $29.4 billion.

Farmers are caught between soaring inflation and skyrocketing production costs on the one hand, and on the other, a policy of rising interest rates which increases their debt burden tenfold.

Power of monopolies

Like all other economic sectors, agriculture is affected by monopoly power. While Quebec farms are relatively small compared to the rest of North America, they are all at the mercy of the major food monopolies, starting with the big processing and distribution corporations.

A particular – and positive – feature of the rural economy in Quebec is that 70 percent of agri-food processing takes place on site. Nevertheless, over 85 percent of agricultural production is sold to just three companies. Despite the supply management system, these monopolies are the ones which set the prices.

As a result, the surplus value extracted from farmers’ labour does not go back to the producer. Instead, it pads the bank accounts of the intermediaries who monopolize most of it, leaving farmers the least well off from the product of their labour.

An anti-monopoly agriculture policy

The solution is an agricultural policy that redistributes added value from farm to fork.

When it comes to agriculture, Quebec has no shortage of noble land. There is also plenty of agricultural training available, with two agri-food technology institutes in St-Hyacinthe and La Pocatière which are both at the cutting edge of technology and science. The people who work the land benefit from advanced training which can enhance their work towards sustainable, viable agriculture capable of ensuring Quebec’s food sovereignty.

However, this knowledge and technology are mobilized to guarantee profits for the big agribusinesses whose first victims are farmers. Beyond big corporations, nobody benefits from high food prices in grocery stores or from the fact that 47 percent of farmland is fallow or abandoned as a disastrous consequence of monopoly concentration in agriculture.

This situation is not inevitable. Rather than benefiting the big corporations while offering minimal insurance to farmers, a bold anti-monopoly agricultural policy would focus on ensuring that even the smallest farmers receive their fair share of the fruits of their labour. Of course, such a measure requires a total break with the USMCA and other capitalist free trade agreements.

At the heart of such an anti-monopoly policy must be the fair distribution among producers of the added value of agricultural products. A system of public markets – joint controlled by the state, consumers and agricultural producers – would, at the very least, impose democratic control over prices for a portion of food products. Over the longer term, it should replace the large private distribution groups.

Input prices must also be subject to strict regulation, as was the case in Canada until 2022.

There are many other measures which need to be adopted in order to respond adequately to problems in agriculture. These include issues relating to farm workers, particularly poorly paid temporary immigrant labourers, as well as the environment and pesticides.

But once freed from the current economic feudalism, small producers will be able to form cooperatives and take their place in the anti-monopoly struggle, alongside the working class.

Clarté – translated from French by PV staff

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