1 00:00:06,760 --> 00:00:12,400 JEREMY: Hello and welcome to another episode of Eat This podcast with me, Jeremy Cherfas. 2 00:00:14,200 --> 00:00:19,200 Modern industrial agriculture depends on four basic inputs. 3 00:00:19,480 --> 00:00:23,840 There's the farm machinery that prepares the land and harvests the crops. 4 00:00:24,120 --> 00:00:32,480 There are the seeds, and there are the fertilizers that crops need to grow and the chemicals that protect them from pests and diseases. 5 00:00:33,480 --> 00:00:36,760 Now, you might be aware that as far as industrial agriculture is concerned, 6 00:00:36,760 --> 00:00:42,240 there are actually very few companies that supply those four basic inputs. 7 00:00:42,600 --> 00:00:50,200 These giant companies are the subject of a new book called Titans of Industrial Agriculture: 8 00:00:50,520 --> 00:00:56,720 How a Few Giant Corporations Came to Dominate the Farm Sector and Why It Matters. 9 00:00:57,240 --> 00:01:04,650 The author is Jennifer Clapp, a professor and Canada Research Chair at the University of Waterloo in Ontario. 10 00:01:05,770 --> 00:01:14,570 Size and market concentration matter because both factors enable companies to behave in ways that aren't good for either their direct 11 00:01:14,570 --> 00:01:17,850 customers or for those of us who just eat food. 12 00:01:18,250 --> 00:01:25,370 Typically, economists reckon that when the top four firms control 40% or more of the market, 13 00:01:25,490 --> 00:01:28,490 you start to see bad things happen. 14 00:01:28,850 --> 00:01:37,080 And when it's over 60% for the top four firms, bad things -- like high prices and political manipulation -- 15 00:01:37,080 --> 00:01:44,610 become much more likely. So how concentrated are the markets for farm inputs? 16 00:01:45,370 --> 00:01:52,090 JENNIFER: It's a bit tricky because there's global levels of concentration in terms of the global market that's controlled by these firms, 17 00:01:52,090 --> 00:01:56,810 and there's also national level and even subnational levels of concentration that matter. 18 00:01:56,810 --> 00:02:03,450 But to give the global picture: Today, the top four pesticide companies, 19 00:02:03,690 --> 00:02:10,930 which are also the top seed companies, they control around 70% of the global pesticide market and around 60% 20 00:02:11,170 --> 00:02:15,810 of the global seed market. But that can be much more concentrated, as I said, 21 00:02:15,850 --> 00:02:20,410 at the national level. So, for example, in something like 15 countries, 22 00:02:20,410 --> 00:02:25,770 the concentration ratio for maize seeds alone is over 80% for the top four firms. 23 00:02:25,770 --> 00:02:28,090 So it's different in different markets. 24 00:02:28,290 --> 00:02:32,890 S imilarly in the farm machinery industry, around half of the machineries, 25 00:02:32,930 --> 00:02:36,570 the farm machinery, sold in the world is controlled by the top four firms. 26 00:02:36,570 --> 00:02:38,650 And in fertilisers it's a little bit different. 27 00:02:38,650 --> 00:02:44,370 We actually don't have really good data because that market is a bit more fragmented. But at the national level, we know for in North 28 00:02:44,370 --> 00:02:49,770 America, for example, the top four firms control around 75% of the nitrogen fertilizer market. 29 00:02:49,930 --> 00:02:59,380 JEREMY: Let's start with farm machinery, because the kind of standard mythology is that McCormick invented the 30 00:02:59,380 --> 00:03:08,180 reaper and it was better than all the other reapers and that's why McCormick became a giant company. 31 00:03:09,900 --> 00:03:11,220 What's the real story? 32 00:03:13,180 --> 00:03:16,580 JENNIFER: It's a good question. The real story is a little bit more complicated. He was ... 33 00:03:16,620 --> 00:03:19,900 Cyrus H. Mccormick wasn't, in fact, the first to invent a reaper. 34 00:03:20,220 --> 00:03:26,060 T here was one invented in Scotland, several years before Cyrus McCormick came up with his model. 35 00:03:26,340 --> 00:03:33,780 T he story is complicated in the sense that there were multiple inventors of reapers, 36 00:03:33,780 --> 00:03:42,740 but the technology fit quite well in the North American context because of the relative scarcity of labour. 37 00:03:42,740 --> 00:03:48,620 And so because the reaper machinery saved labor, it sort of took off there a bit more. 38 00:03:48,620 --> 00:03:55,660 And there was in fact, another ... Obed Hussey had also developed a machine around the same time that Cyrus McCormick did, 39 00:03:55,660 --> 00:04:01,980 and he actually, he submitted his patent, got it, got a patent for that machinery before McCormick did. 40 00:04:02,220 --> 00:04:08,380 What I talk about in the book is that Cyrus McCormick's firm, the McCormick Harvesting Machine Company, 41 00:04:08,380 --> 00:04:14,500 really was able to take off, not simply because it made better machines , 42 00:04:14,500 --> 00:04:17,140 it was more that it was in the right place at the right time. 43 00:04:17,140 --> 00:04:20,980 It had privileged access to finance and financiers. 44 00:04:21,180 --> 00:04:27,900 It had access to this expanding market westward because of the building of the railways . 45 00:04:27,900 --> 00:04:32,060 And because it had that capital, it could offer credit to its purchasers. 46 00:04:32,060 --> 00:04:40,140 And then after his death, and I should say as well, he was very aggressive in suing any other company that he thought was 47 00:04:40,980 --> 00:04:43,220 stealing his designs or his features. 48 00:04:43,500 --> 00:04:45,700 And this made him a wildly wealthy man. 49 00:04:45,740 --> 00:04:53,140 But after his death, his family actually went on a major campaign trying to create this public image of Cyrus H. 50 00:04:53,180 --> 00:04:57,870 Mccormick as this very generous American who invented this, you know, 51 00:04:57,910 --> 00:05:00,510 game changing technology and benefited everybody. 52 00:05:00,950 --> 00:05:09,510 But it was it was more complicated because he was not a very well liked man at the time of his his great wealth and fame, 53 00:05:09,550 --> 00:05:13,870 and not unlike the big tech moguls we talk about today. 54 00:05:15,390 --> 00:05:21,710 JEREMY: I'm trying hard to avoid the big tech moguls of today , though we may get to them later. 55 00:05:21,710 --> 00:05:24,750 But the whole business of farm machinery consolidation ... 56 00:05:24,750 --> 00:05:32,310 I was stunned to read in your book that in 1902, there was this mega-merger, 57 00:05:32,710 --> 00:05:42,150 I think you and others have called it, that resulted in 85% of all tractors in North America being sold by 58 00:05:42,150 --> 00:05:45,190 one company. How did that come about? 59 00:05:46,390 --> 00:05:49,550 JENNIFER: Yeah, it's a really fascinating story. 60 00:05:49,550 --> 00:05:56,150 And I was surprised when I was reading about this as well and that's why I felt really very much like I had to convey this story, 61 00:05:56,150 --> 00:06:03,150 because it really reinforced for me that this kind of consolidation and mega-mergers we experience today is not new. 62 00:06:03,550 --> 00:06:11,670 It goes back well over a century. So that particular merger happened in the farm machinery industry. 63 00:06:11,670 --> 00:06:15,950 So McCormick invented his machinery in the 1830s. 64 00:06:15,950 --> 00:06:21,030 But by the 1860s and 70s, these had become really big companies. 65 00:06:21,030 --> 00:06:26,030 The patents, patents on his basic designs had expired, other companies had come into the mix. 66 00:06:26,390 --> 00:06:35,910 And there was these ... It's important to understand these companies were benefiting from the fact that America was expanding westward, 67 00:06:35,950 --> 00:06:37,630 taking lands of indigenous peoples. 68 00:06:37,630 --> 00:06:45,470 Expanding farming machinery also led to larger farms, but it maintained this kind of demand for farm machinery until about 69 00:06:45,470 --> 00:06:53,830 the 1870s. And around that time, a lot of the land had already been taken and the demand for farm machinery started to decline. 70 00:06:53,830 --> 00:06:58,960 And that led to what, you know, what they call, you know, these harvester wars, 71 00:06:58,960 --> 00:07:04,280 where there were this really intense competition between the firms and the sector. 72 00:07:05,000 --> 00:07:08,240 And that was, you know, the panic of 1873. 73 00:07:08,240 --> 00:07:16,960 There was a great depression in that period and that really put pressure on these firms if they wanted to survive. 74 00:07:17,000 --> 00:07:22,280 They felt they had to merge. But of course, in the US, there was the passage of the Sherman Act, 75 00:07:22,280 --> 00:07:27,720 which outlawed monopoly. Basically, no one firm can control the entire market. 76 00:07:27,760 --> 00:07:33,680 And so, interestingly, you know, these firms had gone back and forth with these merger talks across the 1890s. 77 00:07:33,680 --> 00:07:41,480 And finally, in 1902, they agreed to this mega -merger of seven different farm machinery firms together, 78 00:07:41,480 --> 00:07:43,480 and they controlled 85% of the market. 79 00:07:43,480 --> 00:07:49,240 And their advisor from, I believe it was JP Morgan Bank, George Perkins, 80 00:07:49,240 --> 00:07:54,680 he said to them, "oh, don't worry, we won't , we won't be busted by the Sherman Act because it's not a 81 00:07:54,680 --> 00:08:00,000 complete monopoly. It doesn't contain all the firms in the market". But it gave the resulting firm, 82 00:08:00,000 --> 00:08:04,400 which was called International Harvester, a commanding lead over the market. 83 00:08:04,440 --> 00:08:09,280 And as you said, it controlled 85% of the farm machinery sales in the US at that moment. 84 00:08:09,280 --> 00:08:13,520 It was quite incredible and much more concentrated than what we see even today. 85 00:08:14,000 --> 00:08:23,760 JEREMY: L et's move to fertilisers. I mean, fertilisers sort of come after farm machinery to some 86 00:08:23,760 --> 00:08:31,720 extent. S o I think one of the things that's interesting about fertilisers is, 87 00:08:31,720 --> 00:08:34,120 to begin with it was all kind of mined. 88 00:08:34,160 --> 00:08:41,370 It wasn't being manufactured , it was things like, like bird guano and bat guano and things like that . 89 00:08:41,370 --> 00:08:43,840 Was there concentration in that market? 90 00:08:46,600 --> 00:08:52,970 JENNIFER: When it became clear that you could bring in these nitrogen resources from elsewhere, 91 00:08:53,170 --> 00:08:58,210 that's when the trade in guano really took off, because it was understood around that time, 92 00:08:58,210 --> 00:09:03,970 around the 1840s and 50s, that guano, bird guano, specifically from the Chincha Islands off the coast of 93 00:09:03,970 --> 00:09:09,450 Peru, was like specifically, very, very rich in the right kinds of nitrogen for plant growth. 94 00:09:09,770 --> 00:09:14,930 So that led to the mining of those islands within just a few short decades. 95 00:09:14,930 --> 00:09:19,850 They had basically taken hundreds of feet deep of guano and mined it out in horrible conditions. 96 00:09:19,850 --> 00:09:22,930 And workers died. And it was, you know, indentured labour from China. 97 00:09:22,930 --> 00:09:25,610 It was really awful conditions. 98 00:09:25,810 --> 00:09:35,290 But yes, there were monopolies on that trade that the government of Peru actually had taken a cut. 99 00:09:35,290 --> 00:09:40,250 And then these international traders of the fertiliser, these merchant companies from Britain, 100 00:09:40,250 --> 00:09:47,290 for example. And so there was a degree of cartelisation in the fertiliser industry from really early on. 101 00:09:47,290 --> 00:09:53,730 And when the guano was depleted, then they started a similar process with nitrate mining in Chile, 102 00:09:53,930 --> 00:09:57,330 and that is responsible for tensions in the region. 103 00:09:57,370 --> 00:10:01,650 A war between various countries over the borders and, you know, access to resources. 104 00:10:01,650 --> 00:10:11,450 And again, very wealthy financial and trading interests from Britain in a cartel -like kind of setting. 105 00:10:11,450 --> 00:10:20,170 JEREMY: But when you get chemists -- Haber-Bosch process -- being able to synthesise nitrogen using lots of energy , 106 00:10:20,210 --> 00:10:28,450 was it the same people who continued to control synthetic fertilizers? 107 00:10:29,130 --> 00:10:33,850 JENNIFER: Well, the synthetic fertiliser, the synthetic nitrogen was first ... 108 00:10:33,890 --> 00:10:39,810 The process for that was first developed by BASF, which is still one of the big chemical companies in the world, 109 00:10:40,010 --> 00:10:45,890 and that , it shifted the power dynamic within the fertiliser industry, 110 00:10:46,050 --> 00:10:51,860 especially with respect to nitrogen, to these chemical companies that were on the rise in the early 20th 111 00:10:51,860 --> 00:11:01,340 century when synthetic nitrogen came around, it was more about access to the methods to use it and access to 112 00:11:01,380 --> 00:11:06,980 energy. So it was quite constrained at the beginning because of patent protection over these techniques. 113 00:11:08,100 --> 00:11:14,100 JEREMY: So how did it then stay concentrated, because patents expire? 114 00:11:15,180 --> 00:11:19,780 JENNIFER: Yeah. And in fact, at the end of the war, there was this -- the First World War -- 115 00:11:19,900 --> 00:11:29,380 there was this taking of of the technological know-how from Germany and making sure that it got into the hands of the companies in the US 116 00:11:29,380 --> 00:11:34,580 that were frantically trying to figure out how to replicate this process. 117 00:11:34,580 --> 00:11:37,060 And the US wasn't very successful in doing that, though. 118 00:11:37,100 --> 00:11:46,660 In Canada, we had a big cyanamide factory in Niagara Falls that was using energy from the falls to develop this fertiliser process. 119 00:11:46,860 --> 00:11:52,660 W hat's interesting, obviously, is the synthesis of nitrogen was really important for bomb making. 120 00:11:52,700 --> 00:11:57,060 That's sort of ... It was this desire to get away from dependence on Chile for nitrates, 121 00:11:57,060 --> 00:11:59,940 where, you know, now you could produce it yourself to make bombs. 122 00:12:00,020 --> 00:12:03,660 So there was definitely government interest and involvement in the sector. 123 00:12:03,660 --> 00:12:10,420 And that kind of helped the firms in a way to gain some of that dominance in the sector. 124 00:12:10,460 --> 00:12:17,060 JEREMY: Mhm. I t's a bit sort of Four Horsemen of the Apocalypse, but let's do pesticides. 125 00:12:17,300 --> 00:12:21,580 A gain, natural pesticides, synthetic pesticides. 126 00:12:21,620 --> 00:12:27,380 Let's focus on synthetic pesticides because that's also chemistry like fertilisers, 127 00:12:27,380 --> 00:12:30,700 it's chemistry. So is it the same firms? 128 00:12:31,900 --> 00:12:37,780 JENNIFER: M any of the same firms indeed were producing pesticides and fertilisers in the early 20th century. 129 00:12:38,060 --> 00:12:43,140 And I wouldn't be surprised if we go back to that, you know, scenario again in the future. 130 00:12:43,140 --> 00:12:52,230 But at the time, the rise of organic chemistry, synthetic, in the development of synthetic chemicals from 131 00:12:52,870 --> 00:13:00,870 coal tar and other kinds of fossil fuel derivatives, led to the screening basically of a lot of new chemical compounds to 132 00:13:00,910 --> 00:13:05,310 see what might be useful as a pesticide. 133 00:13:05,430 --> 00:13:08,510 And that's what delivered us DDT and other organic ... 134 00:13:08,510 --> 00:13:17,630 organochlorines and organophosphates that were , at the beginning, very effective in terms of handling pests. 135 00:13:17,750 --> 00:13:21,350 A nd pesticides were the result. And that was a big ... 136 00:13:22,190 --> 00:13:26,790 a big market for those firms. And again, it was entangled in the Second World War. 137 00:13:26,830 --> 00:13:31,910 There was like a government, US government, interest in having access to DDT, 138 00:13:31,950 --> 00:13:34,550 which they got from the Swiss firm that had developed it. 139 00:13:34,990 --> 00:13:44,110 And then they handed those -- basically the the production methods -- over to the US firms to produce it for the US military. 140 00:13:44,110 --> 00:13:51,990 And that gave those firms a big leg up, you know, by providing these kind of products that were both useful in 141 00:13:51,990 --> 00:13:56,270 war contexts as well as in farming, you know. 142 00:13:56,310 --> 00:14:00,350 It allowed those firms to basically really consolidate their power. 143 00:14:00,670 --> 00:14:03,870 JEREMY: Yeah, because they had government purchases on the one hand. 144 00:14:03,870 --> 00:14:07,630 And in peacetime, maintained that. 145 00:14:08,950 --> 00:14:09,590 JENNIFER: Exactly. 146 00:14:09,950 --> 00:14:19,910 JEREMY: Seeds! N owadays, concentration in the seed industry is associated specifically with F1 hybrid 147 00:14:19,910 --> 00:14:26,310 seeds, which are, you know, force you to as a farmer, you have to go back and buy new seed every year. 148 00:14:26,790 --> 00:14:34,110 But to begin with, when they were being developed, they weren't that much better than open pollinated seeds. 149 00:14:34,270 --> 00:14:37,910 So how did they get going? How did they achieve superiority? 150 00:14:38,590 --> 00:14:45,590 JENNIFER: There's been a lot of historical research looking into this question, which I found completely fascinating to dive into , 151 00:14:45,590 --> 00:14:50,920 because you're right that the selected seeds were often performing just as well as these new, 152 00:14:50,960 --> 00:14:54,720 you know, newfangled hybrids, which had been developed in the 1920s. 153 00:14:54,720 --> 00:14:58,800 And that was sort of selecting and inbreeding and then inbreeding again, 154 00:14:58,800 --> 00:15:04,440 and then you end up with this hardy hybrid that has potentially, you know, 155 00:15:04,480 --> 00:15:06,920 good yields, but it can't reproduce itself. 156 00:15:06,920 --> 00:15:08,680 So you have to buy new seeds every year. 157 00:15:08,960 --> 00:15:17,720 A nd that gave the firms producing those seeds kind of a trade secret because they didn't reveal what the inbreeding lines were. 158 00:15:17,760 --> 00:15:21,720 And so then they could actually make sure that nobody could copy what they were doing. 159 00:15:21,960 --> 00:15:30,920 B ut in terms of farmer adoption of those seeds, it wasn't automatically at first that everyone was really excited 160 00:15:30,920 --> 00:15:36,760 about them, because the yields weren't that much higher. And the price of those seeds was actually quite a bit more. So the companies tried 161 00:15:36,760 --> 00:15:41,080 all these different, you know, methods to try and get farmers to adopt them by saying, 162 00:15:41,080 --> 00:15:50,050 "we'll give you free seeds for this part of your field if you share with us half the proceeds from whatever you are able to grow on that 163 00:15:50,050 --> 00:15:54,770 field, and you'll see, you know, sort of like, you'll see you'll have higher yields and you'll do better". B ut 164 00:15:54,770 --> 00:16:03,210 really, what led to the rapid adoption of hybrids was kind of a weird confluence of events. 165 00:16:03,210 --> 00:16:08,650 There was a drought in North America in the early 1930s. 166 00:16:08,890 --> 00:16:15,210 And interestingly, the hybrid seeds, it wasn't that they were producing more corn, 167 00:16:15,250 --> 00:16:21,930 you know, per plant, but they had stiffer stalks and they could withstand fertiliser application. 168 00:16:21,930 --> 00:16:26,810 And there was a lot of synthetic fertiliser left over from the war effort. 169 00:16:26,810 --> 00:16:30,410 So there was this like pile of fertiliser that they could use. 170 00:16:30,450 --> 00:16:34,690 And what it meant was that those plants survived the drought. 171 00:16:34,690 --> 00:16:40,730 And also they didn't fall over like other plants would do if you over apply fertiliser. 172 00:16:40,930 --> 00:16:47,330 And then combined with that was US government policy trying to discourage farmers from producing too much, 173 00:16:47,330 --> 00:16:50,410 because it was overproduction and depressed prices at that time. 174 00:16:50,410 --> 00:16:56,570 So they put constraints on how many acres they could actually farm. 175 00:16:56,890 --> 00:17:06,130 And by using the hybrid seeds, they could actually plant them more closely together and pile on tons of fertiliser. 176 00:17:06,410 --> 00:17:10,730 And so we get this impression that hybrids were these really productive crops, 177 00:17:10,730 --> 00:17:15,450 but really they were just being planted much more closely together and doused with fertiliser. 178 00:17:15,690 --> 00:17:24,850 I'm talking about maize here specifically because those were the first hybrid crops, but that basically gave this illusion that it was a 179 00:17:24,850 --> 00:17:31,170 higher production. And then many farmers at the time, because they were adopting tractors, 180 00:17:31,210 --> 00:17:36,850 like, adopting hybrids made more sense because they, you know, the ears of corn, 181 00:17:36,850 --> 00:17:41,210 for example, would all be at a more or less uniform height on the plant because they were uniform, 182 00:17:41,210 --> 00:17:43,820 genetically plant ... genetically uniform plants. 183 00:17:43,940 --> 00:17:45,940 Then it was harvesting was much easier. 184 00:17:45,940 --> 00:17:49,140 So it kind of was like a bit of a lock in was already beginning. 185 00:17:49,380 --> 00:17:55,020 And plugging in the hybrid seeds kind of helped make sense of the farm machinery adoption. 186 00:17:55,020 --> 00:17:57,340 And it also made sense of the fertiliser adoption. 187 00:17:57,340 --> 00:18:05,420 Of course, then it led to a need for more pesticides because monocultures tend to attract these kinds of pests. 188 00:18:05,420 --> 00:18:11,780 But it was this rapid adoption because of these weird, you know, weather patterns, 189 00:18:11,780 --> 00:18:13,740 government policies, that sort of thing. 190 00:18:14,060 --> 00:18:20,860 But once it happened, it was really hard to turn back for many farmers because of those other inputs, 191 00:18:20,860 --> 00:18:22,260 especially like machinery. 192 00:18:22,380 --> 00:18:25,700 JEREMY: That lock in thing that you mentioned is really interesting because of course, 193 00:18:25,700 --> 00:18:32,620 when you think of seeds, modern seeds, you think of companies like what used to be Monsanto -- 194 00:18:32,660 --> 00:18:42,340 was Monsanto at the time -- breeding seeds that actually required farmers to use the herbicides that the company was 195 00:18:42,340 --> 00:18:49,560 producing. B ring in machinery as well, a nd I suppose fertilizers as well, 196 00:18:49,560 --> 00:18:56,180 and it seems like a sort of self-reinforcing flywheel. 197 00:18:58,140 --> 00:19:01,820 JENNIFER: And yes, in fact, people call it , you know, this technological treadmill. 198 00:19:02,220 --> 00:19:07,420 Once you're on it, you almost have to start running faster and faster and it's really hard to get off. 199 00:19:07,660 --> 00:19:13,180 B ut for sure that development of agricultural biotechnology in the 1990s, 200 00:19:13,180 --> 00:19:19,540 those crops were first commercialised , what they did was put a lot of effort into engineering the crops to be 201 00:19:19,540 --> 00:19:22,700 resistant to the application of their own brand of herbicides. 202 00:19:22,700 --> 00:19:26,340 And that really encouraged more herbicide use. 203 00:19:26,380 --> 00:19:31,740 And in fact, in the decades that followed, we saw a massive increase in the use of herbicides. 204 00:19:31,740 --> 00:19:38,020 In fact, you know, we used to be concerned in the 1940s and 50s about pesticide use , 205 00:19:38,340 --> 00:19:40,540 largely talking about insecticides. 206 00:19:40,540 --> 00:19:48,590 But now most of the chemicals farmers use are actually herbicides , that that attack weeds but leave the crops standing. 207 00:19:49,910 --> 00:19:59,030 JEREMY: S o far we've been talking, it's sort of all been good for the companies and possibly good in some ways for people who eat food. 208 00:19:59,470 --> 00:20:03,670 M aybe even for farmers if they got out of debt and so on. 209 00:20:03,670 --> 00:20:09,950 But are there any real benefits? I mean, I'm thinking, for example, of research and development. 210 00:20:09,990 --> 00:20:19,470 I mean, a company ... maybe a well capitalised company is better placed to find new pesticides or 211 00:20:20,270 --> 00:20:25,870 new GMOs. I sn't that a good reason to have big companies? 212 00:20:27,510 --> 00:20:32,630 JENNIFER: Well, that's a good question. And I would say that's a long standing argument that especially, 213 00:20:32,630 --> 00:20:36,950 that you hear from the large companies, is that they're the only ones with a large enough research and 214 00:20:36,950 --> 00:20:45,070 development budget to actually make these kinds of really innovative new technologies that transform the farming sector. 215 00:20:45,070 --> 00:20:49,270 And there are reasons to be a little bit skeptical of that argument. 216 00:20:49,430 --> 00:20:54,430 And this is a long standing debate in the economics field as well, with, 217 00:20:54,470 --> 00:20:59,510 you know, Joseph Schumpeter, Schumpeter saying big firms are more likely to be innovators. 218 00:20:59,510 --> 00:21:05,350 Kenneth Arrow saying, well, wait a minute, we need competition to actually spark real innovation. 219 00:21:05,550 --> 00:21:08,950 And I would say that, you know, it's an interesting debate. 220 00:21:08,950 --> 00:21:13,390 I tend to agree with many, many of Arrow's critiques because he basically says, 221 00:21:13,630 --> 00:21:18,830 if you just have two or three or four firms at the top of the market and they're able to sell their products, 222 00:21:18,830 --> 00:21:22,470 what is the incentive for them to innovate if they don't have to? 223 00:21:22,550 --> 00:21:26,070 JEREMY: Yeah, I would counter that what forces them to innovate is nature. 224 00:21:26,070 --> 00:21:32,870 Because, you plug pesticide resistance into plants, you get pesticide resistant insects. 225 00:21:32,910 --> 00:21:35,390 I mean, that's why they have to innovate. 226 00:21:36,430 --> 00:21:40,640 JENNIFER: Yeah. And they have tried to deal with some of those issues. 227 00:21:41,040 --> 00:21:49,240 But as we've seen in in the case of the genetically modified organisms you raised earlier, 228 00:21:49,520 --> 00:21:55,320 this whole idea of making seeds resistant to herbicides was trying to make this argument that glyphosate, 229 00:21:55,320 --> 00:22:02,640 which was the chemical in that herbicide, was relatively safe compared to other chemicals that were quite toxic, 230 00:22:02,680 --> 00:22:08,360 acutely toxic. S o there is a history of firms trying to respond to these issues, 231 00:22:08,360 --> 00:22:12,160 but they often are responding in a way that benefits their bottom line, 232 00:22:12,160 --> 00:22:17,760 not necessarily benefits public, the public good more generally. 233 00:22:17,800 --> 00:22:26,040 But because, of course, there are companies that are beholden to their shareholders and they're trying to make innovations that are more 234 00:22:26,040 --> 00:22:30,920 profitable. So I think we can just assume that companies are always going to do that. 235 00:22:31,880 --> 00:22:39,840 JEREMY: Let's talk about the future. I mean, the big trend at the moment, at least among the sort of wealthy 236 00:22:39,880 --> 00:22:45,360 farmers, but also in developing countries, is this idea of smart agriculture, 237 00:22:45,360 --> 00:22:54,680 of using information technology. A nd again, it's the same companies who will equip your equip your tractor with 238 00:22:55,040 --> 00:23:00,200 GPS so that it delivers the herbicide at just the spot that needs it. 239 00:23:00,600 --> 00:23:06,880 Is this the future of consolidation and of consolidation and bigness? 240 00:23:08,280 --> 00:23:13,160 JENNIFER: I think that it's leading to pressures of further consolidation. 241 00:23:13,160 --> 00:23:18,600 And I wouldn't be surprised if we see consolidation across at least the chemical seed industry, 242 00:23:18,600 --> 00:23:23,320 which is one now, which used to be separate industries, but they merged with agricultural biotechnology. So we have a 243 00:23:23,320 --> 00:23:27,040 precedent that this happens. I t's happening in the farm machinery industry. 244 00:23:27,040 --> 00:23:32,840 They're also going all in on these digital farming platforms, as well as in the fertiliser industry. 245 00:23:32,840 --> 00:23:37,250 So we are at this moment right now where we have competition across these sectors, 246 00:23:37,250 --> 00:23:43,050 whereas they used to kind of stay in their lane, until seeds and chemicals merged in the 1980s and 90s. 247 00:23:43,050 --> 00:23:50,770 And now we're seeing all three of those sets of companies vying to be the dominant digital farming platform. 248 00:23:50,770 --> 00:24:00,570 And what I mean by that is, they're selling software packages that connect farmers to satellites and cloud servers and 249 00:24:00,890 --> 00:24:09,650 use of AI, basically, as you say, using sensors on machinery to detect what's going on in the soil here , 250 00:24:09,650 --> 00:24:13,810 what's the weather like? Ssing little cameras to detect, oh, there's a weed there. 251 00:24:13,810 --> 00:24:22,370 We can spray exactly that weed. And it's, in a way, it's built on this idea of efficiency of resources. 252 00:24:22,370 --> 00:24:28,770 But these companies make a lot of profit off of the software packages, 253 00:24:28,770 --> 00:24:32,330 in fact, much more than the physical products that they sell. 254 00:24:32,330 --> 00:24:37,770 So I would say that data is becoming almost a fifth major input. 255 00:24:38,130 --> 00:24:42,410 It is a fifth input in the sector for those farmers that are moving towards digital farming. 256 00:24:42,770 --> 00:24:52,530 A nd so because they're all vying for this dominance in the platform, I wouldn't be surprised if we start to see some kind of consolidation 257 00:24:52,530 --> 00:24:54,330 across the sectors. 258 00:24:54,690 --> 00:25:01,010 JEREMY: It's interesting that you mentioned data as a as a fifth input because it's always been there, 259 00:25:01,210 --> 00:25:05,490 but it's been in the farmer's head and their experience. 260 00:25:05,890 --> 00:25:13,730 So , time was when a farmer would decide what to do, when to do it, how to do it. 261 00:25:14,090 --> 00:25:18,290 But I mean, if you've got enough capital and you can buy all the machinery, 262 00:25:18,330 --> 00:25:20,690 anyone with land can become a farmer. 263 00:25:20,730 --> 00:25:22,930 There's no skill involved, is there? 264 00:25:24,530 --> 00:25:30,370 JENNIFER: Yeah, exactly. It's ... I mean, some would say there's some skill in being able to use the digital technologies, 265 00:25:30,370 --> 00:25:31,570 but it's de-skilling. 266 00:25:31,570 --> 00:25:32,850 JEREMY: It's not farming. 267 00:25:33,410 --> 00:25:36,180 JENNIFER: Yeah. It's not farming. Yeah. Well, exactly. 268 00:25:36,180 --> 00:25:44,740 You think of farming as an art, that the decisions are coming from the farmer's own understanding of their land and the environment in which 269 00:25:44,740 --> 00:25:51,700 they are living. And so we've basically, with the rise of all of these technologies and especially digital 270 00:25:51,700 --> 00:25:55,700 agriculture, there's been this concern among scholars that it's leading to de-skilling. 271 00:25:55,820 --> 00:26:00,820 So it's de-skilling farmers. And it's going to lead, or it could lead, 272 00:26:00,860 --> 00:26:05,100 rather to a situation where farming is basically done by robots. 273 00:26:05,580 --> 00:26:09,820 All the decisions are made by AI. We don't need any farmers. 274 00:26:09,820 --> 00:26:14,460 And that's going to lead to further consolidation of farmland. 275 00:26:14,660 --> 00:26:17,900 JEREMY: And what does it mean to be a farmer in a developing world? 276 00:26:18,340 --> 00:26:28,020 I mean, has it changed, or does it threaten the kind of small scale subsistence farming on which so much of the world 277 00:26:28,020 --> 00:26:29,420 depends for food? 278 00:26:31,100 --> 00:26:40,780 JENNIFER: Yeah, that's a great question because many civil society organisations looking at these dynamics say that around 70% of the world is 279 00:26:40,820 --> 00:26:43,260 actually fed by small scale farmers. 280 00:26:43,260 --> 00:26:52,580 And it's the, you know, the 30% that is this large scale industrial agriculture that people are fed from that. 281 00:26:52,580 --> 00:26:56,980 But dynamics are constantly changing, and it's hard to verify all of these data. 282 00:26:56,980 --> 00:27:04,060 But definitely small scale farmers are really important in the global South and the small markets in which they market their goods are also 283 00:27:04,060 --> 00:27:05,900 really important for feeding people. 284 00:27:06,420 --> 00:27:13,940 But these big changes, I would argue, threaten the capacity of small scale farmers to continue the 285 00:27:13,940 --> 00:27:17,980 livelihoods that they have had for so many thousands of years. 286 00:27:18,140 --> 00:27:25,060 And this move towards digital farming, for example, i t's making its way to Asia, 287 00:27:25,100 --> 00:27:28,420 it's making its way to sub-Saharan Africa and to Latin America. 288 00:27:28,740 --> 00:27:37,390 A lot of new apps, farming apps, you know, digital applications, are being developed in these contexts, 289 00:27:37,590 --> 00:27:44,150 and while they look like they're local kind of initiatives, they're actually often connected to the big, 290 00:27:44,150 --> 00:27:51,470 big companies. So it's a situation where we're seeing, I would call it kind of like an onward march of the spread of 291 00:27:51,470 --> 00:27:58,670 industrial agriculture. And it does threaten that kind of more low input , 292 00:27:59,750 --> 00:28:01,230 smaller scale agriculture. 293 00:28:02,150 --> 00:28:09,110 JEREMY: You've gone through basically the downsides of big and consolidated agriculture. 294 00:28:09,550 --> 00:28:18,790 B ut, especially politically, given the current kind of political and market belief system, 295 00:28:18,830 --> 00:28:25,070 given that, how do you see any of this changing? 296 00:28:25,070 --> 00:28:29,110 Where will change come from? It surely won't come from the industries. 297 00:28:31,030 --> 00:28:37,710 JENNIFER: Right. And I point that out in the book, that I don't think we can rely on corporations to suddenly see the 298 00:28:37,710 --> 00:28:44,190 light and change the model , because I think the model does need to rely less, 299 00:28:44,190 --> 00:28:49,670 or maybe not at all, on these expensive external inputs that cause a lot of problems. 300 00:28:50,070 --> 00:28:54,590 And the corporations, their innovation model is to basically earn money, 301 00:28:54,630 --> 00:28:59,750 and they're beholden to their shareholders, and they're often merging and acquiring one another because of this 302 00:28:59,750 --> 00:29:06,070 pressure from investors. So I don't think we're going to see the solutions coming from there. 303 00:29:06,070 --> 00:29:09,590 But I do think we have to have solutions. 304 00:29:09,590 --> 00:29:16,470 And what I found really interesting in writing the book was -- this real lesson to me was -- 305 00:29:16,470 --> 00:29:20,110 that the transformation to industrial agriculture took, first of all, 306 00:29:20,110 --> 00:29:23,830 it took a long time. I t took over a hundred years. 307 00:29:24,350 --> 00:29:29,270 It's still evolving. B ut if we want to have a transition to a more sustainable agriculture, 308 00:29:29,270 --> 00:29:34,920 I think we have to think more long term than we have been, although we don't have a lot of time. 309 00:29:34,920 --> 00:29:40,680 So for me, this sort of keeps me up at night, this worry that if we don't have a quick transition, 310 00:29:40,680 --> 00:29:44,560 we're we're kind of cooked. So we have to push it along. 311 00:29:44,640 --> 00:29:52,960 So how do we push it along? How do we implement a real transformation more quickly than what happened over the past 150 years? 312 00:29:53,840 --> 00:30:02,640 JEREMY: Jennifer Clapp, author of Titans of Industrial Agriculture: How a Few Giant Corporations Came to Dominate the Farm Sector and Why 313 00:30:02,640 --> 00:30:03,440 it Matters. 314 00:30:04,360 --> 00:30:12,720 I was a bit unfair ending the interview where I did, because Jennifer Clapp does have some good suggestions on how we might 315 00:30:12,760 --> 00:30:19,320 tackle the policy changes needed to rein in the power of those titans of industrial agriculture. 316 00:30:19,840 --> 00:30:25,840 And it will take tough government policy, because neither the companies nor their shareholders are going to do 317 00:30:25,840 --> 00:30:31,320 anything if they don't have to. If you want to pursue that, I'll put a link to the book, 318 00:30:31,320 --> 00:30:35,040 which is published by The MIT Press in the show notes. 319 00:30:35,080 --> 00:30:44,190 You can find them, along with an archive of all previous episodes at eatthispodcast.com . 320 00:30:44,190 --> 00:30:52,080 All we really covered in this talk was farm inputs, but there's concentration and bigness all the way along the industrial 321 00:30:52,080 --> 00:30:55,560 food chain, and they probably aren't all that benign either. 322 00:30:55,920 --> 00:31:00,280 I've dealt with some bits of that in previous episodes and hope to have some more soon, 323 00:31:00,800 --> 00:31:10,440 but that'll do for now. Don't forget you can get hold of me on Instagram and Mastodon links on the website if there's anything 324 00:31:10,440 --> 00:31:16,360 you want to share. For now though, from me, Jeremy Cherfas and Eat This Podcast. 325 00:31:16,400 --> 00:31:18,760 Goodbye and thanks for listening.