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OPINION | REBECCA BOEHM: Big chicken needs bigger competition

by REBECCA BOEHM SPECIAL TO THE DEMOCRAT-GAZETTE | February 4, 2022 at 2:54 a.m.

The editorial, "Meat on the bone" (Jan. 10), focused on consumer prices and inflation but missed a meatier part of the problem with excessive market concentration in the meat and chicken processing industries.

Research by the Union of Concerned Scientists indicates that curbing market concentration in the chicken industry--in which a few companies control a majority of the market--could have benefits for workers, farmers and families, especially in Arkansas, home to Tyson Foods, the nation's largest meat processor.

Today, four companies account for 87 percent of Arkansas' chicken processing sales. Market concentration in the state's chicken industry has tripled since the 1990s to a level nearly three times the threshold for a "highly concentrated market." With so little competition, dominant meat and chicken companies can exploit farmers and plant workers.

There is evidence they do just that. Chicken farmers allege their contracts with major processors like Tyson Foods are discriminatory and unfair. For over a decade, farmers have asked federal regulators to prevent exploitation in these contracts, with little progress.

While processors have used their power to create contracts that favor their interests, farmers saw their share of the consumer dollar drop. What's worse, Arkansas has lost half of its chicken farms since 1978. That's 1,700 Arkansas businesses, many family-owned, shuttered.

Lack of competition is a problem for Arkansas workers, too. Tyson is the only processor in many communities, leaving workers little to no negotiating power to improve their jobs. Chicken processing is dangerous work, with the highest rate of non-fatal injuries of any U.S. industry.

Plant workers, including those employed by Tyson, allege they are routinely denied bathroom breaks and penalized for getting sick. While Tyson touts recently increased wages, local worker rights organization Venceremos has pointed out that the 20-cent-per-hour raise and 20 hours of annual sick leave are woefully insufficient.

Meanwhile, big meat and chicken processors are raking in the profits, as Tyson executives will undoubtedly boast to shareholders at their annual meeting. The company reported some $3 billion in profits in 2021--up 48 percent from 2020--and increased shareholder payouts. Tyson also paid its chairman and two CEOs a combined $37.2 million last year.

So why are giant meat and chicken processors treating farmers and workers so poorly? Because they can. Excessive market concentration gives massive corporations virtually unchecked power, at the expense of everyone else.

Which is why we need bold policy action to curb consolidation, to restore healthy competition, and to rein in the power these massive companies hold. USDA's plan to support independent processors is a good start. But it's just that--a start.

Market concentration is about more than consumer prices. Healthy competition is a core component of our country's economic philosophy, and it's what we need now. For workers and their families who deserve respect and dignity. For family businesses who just want a fair shake. For Arkansans who want to live in thriving communities.

Rebecca Boehm is a senior economist in the Food and Environment program at the Union of Concerned Scientists.

Print Headline: Curb your consolidation


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