The Agricultural Industry Has Consolidated and Is Controlled by only a Few Major Players

The Agricultural Industry Has Consolidated and Is Controlled by only a Few Major Players

In recent years, the agricultural industry has consolidated and is controlled by only a few major players. According to the documentary, in 1970, the five biggest players in the food industry controlled just 25% of the market. Now, the top four players control more than 80%.

One major reason is the desire to achieve massive amounts of economies of scale. This idea of mass production at the cheapest cost has created giant companies that dominate the market and put smaller competitors out of business by acquiring them for growth. Upon achieving mass economies of scale, these companies can offer extremely low prices, making it difficult for others to enter the market without taking on extremely large initial capital investments. This has led to the domination of only a few players.

Another reason for the consolidation is the increasing power that these major companies have over the entire supply chain. These major companies have gained control over the farmers (suppliers) as well as the retailers (buyers). Through the creation of economies of scale these huge companies can make the farmers dependent on their business. The farmers’ capital investments in land, buildings,