Friday, December 11, 2009

Grocery consolidation, globalization felt on farms

Consolidation and globalization of grocery chains is having a profound effect on competitiveness in agriculture, says an agricultural economics professor. "The increasing domination of markets by major retailers and food manufacturers, the major consolidation and rise to power of large international grocery chains is really a cataclysmic change in the food marketing sector," Richard Sexton of the University of California, Davis, said at a recent forum sponsored by the non-profit Farm Foundation.

The forum brought together "industry, academia and U.S. Department of Agriculture economists together to consider structural change and competition in U.S. agriculture and food markets," Agri-Pulse reports. Farm Foundation President Neil Conklin told Agri-Pulse that the Department of Justice was also at the Washington forum because it needs to understand what’s happening in agriculture before joint USDA/DOJ Antitrust Division workshops begin next March on whether new anti-trust and regulatory measures are needed to curb anti-competitive pressures in agriculture.

"Grocery retailers are the dominant players in the food chain today," Sexton said. "I don’t think we know very much about them, how they set prices, how they market their products, and very importantly, we know very little about how their actions affect the markets, including the upstream participants in those markets." (Read more, subscription only)

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