Essay Sample on Rural US Farmers Struggle as Big Business Takes Over Dairy Farming

Introduction

The scenario indicates that the business industry still undergoes an immense revolution. High competition is forcing most of the businesses to imply extreme measures to maximize on profits. While most of the farmers in the rural US practiced dairy farming and relying on small scale processing plants, large enterprises started taking over the industry and also taking control over the entire processing from production to retailing. When large corporations come in, they have the funds to invest in every line of production. From the YouTube video, the farmer states that they had practiced dairy farming for over 60 years since Walmart built a bottling facility, they lost supply contract with the only Dean Company where they used to supply milk. Most of the dairy farmers in the region experienced the same with other companies. Since the entrance of large companies to the industry, most of the farmers risk losing their only source of income since these corporations have their supply. In the end, the sector poses a risk of monopoly where such companies take control, forcing small businesses out of business.

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The kuns family had no other option but only shutting down their dairy milk family, a business they only knew for over seven decades. Other farming businesses from poultry farming, meat, and crop production has also been affected where most of the farming dependent families are left in misery without a source of income (Last Days Of An American Dairy Farm: 'Hard To Believe It's Over" | NBC News, 2018). Venturing of large corporations that choose to take control from production to the end product poses a monopoly. It also eliminates the brokers and small-scale businesses such as suppliers that act as middlemen by helping the farmers through collecting their small produce. Large companies on selecting a few large suppliers with whom they have a relationship, thus making it difficult for small scale farmers and businesses to survive in the market industry (MacLean, 1987).

Large companies come with highly advanced technologies that small-scale farmers and businesses could not cope up. While the farmers using traditional methods, the companies come with sophisticated equipment that performs faster and better. With only a single plant, Walmart was able to eliminate over a hundred dairy farmers from the surrounding states. The same happened in Fremont, Nebraska, when Costco built the only membership warehouse to Walmart that was able to distribute over two million whole chickens to be distributed as cooked rotisserie chicken in stores located in the region. Such a move only forces away small businesses as they cannot compete with such a large production capacity. The company recruited over 100 farmers to produce chicken according to the company's demands, which means they are the only customers. Such a move forces other chicken farmers to experience a loss and even shut down their farms as they have nowhere to sell their chicken.

To survive in such an industry, farmers can form cooperatives that could collect their farm produce and find a broader market. Though organizations have been there for quite a long time, it poses a challenge as they can only establish an entire system from production to end products like what Walmart does. The disadvantage is that companies like Walmart eliminates the need for intermediaries and taking a large portion of the marketplace, thus making it difficult for small businesses to survive. The system creates a monopoly in the industry, thus forcing most of the farmers and small-scale companies out of the market. The dangers of monopoly pose a risk of the only market where the company selects only a few suppliers and farmers whom they want. A single demand for a particular product means that there is no market as the only market available dictates the products they need shutting out the rest. There is also a risk to consumers as they can only buy what the large monopolistic companies bring to the market (MacLean, 1987).

The move by large corporations venturing into farming business scares many farmers where they fear they will go out of business. Some of the takeaway points are that rural farmers are getting agitated and look forward to the federal government to rescue their only source of income. The farmers advocate that the government needs to do something like implementing policies that would control the farming industries and the interests of small-scale farmers. On the other hand, a Company like Cost introducing the $1 million investment per setup presents cash flow into the industry. The move encourages the younger generation to get back into farming as the cash flow boosted the commodity price during the low-price cycle, thus assisting in investing in agriculture. Farmers worry about the loss in retail trade as the companies are pinched to profit-making with only contracted farmers and ranchers. The companies end up controlling quality, cost, production, and distribution hence, profits. In such a situation, small scale farmers not selected as one of the suppliers have nowhere to take their produce; thus, most of them continuing to shut down their businesses (Lauck, 2016).

Rural farmers find it that relaxing farming regulations have done a little to rescue the farming industry. The institutions and lawmakers require to encourage the government to implement policies that will save the rural American farmer. Long term policies may rescue the farming sector and eliminate the monopoly as the industry employs more. The federal government can provide subsidies to local farmers and regulate the market industry for local farmers to find a market for their products and have a share in the marketplace. Agriculture still contributes a more significant part of the economy from food production to employment in the industry. Supporting small scale farmers can encourage youths to get back into farming, create more jobs, thus reducing crime rates (Lauck, 2016).

If farmers keep losing their market share in the farming industry, the financial sector denies the farmers loans as they have no security. Funding the farming industry gets difficult as institutions like banks do not offer loans to small scale farmers and businesses. Rural farmers end up failing to get the funds to meet their needs, closing their farms, and leaving such farmers in misery. Such a gap only provides large corporations with an opportunity to take control of the industry, which resulted in a monopoly. Federal policies make it easier for large companies to dominate the market industry by keeping the prices down to encourage more customers to make purchases. The growing monopoly not only affects the small-scale farmers and businesses but also taking control of the entire system.

References

The Last Days of An American Dairy Farm: 'Hard to Believe It's Over" | NBC News [Video file]. (2018, June 29). Retrieved from https://youtu.be/XEI6HbCZjRQ

Lauck, J. (2016). American Agriculture and the Problem of Monopoly: The Political Economy of Grain Belt Farming, 1953-1980. Lincoln, NE: University of Nebraska Press.

MacLean, J. T. (1987). Small Farms & Farming in the U.S., 1984-86: 162 Citations.