Coalition of Farmer, Environmental, and Antitrust Groups Urge Mnuchin to Ban Large Agribusinesses from CARES Act Aid

April 23, 2020

Letter calls on Treasury Department to ensure that $500 billion slush fund is not used to further consolidate the food system

Washington, DC — A coalition of 68 farmer, environmental, and antitrust groups across the country sent a letter to Treasury Secretary Steven T. Mnuchin today, urging the U.S. Department of the Treasury to ensure that pandemic relief funds do not lead to further consolidation of the food and agriculture industry.

The letter urges Secretary Mnuchin to instead invest stimulus funds into farming systems that lift up farmers and rural communities while providing opportunities for diverse, sustainable agriculture systems to thrive. The letter argues that the current food system under the control of a few major corporate players is unsustainable — a reality that the coronavirus pandemic has laid bare.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law late March, provides over $2 trillion in funds to help individuals and businesses weather the economic challenges stemming from the coronavirus pandemic. The package includes $9.5 billion for the U.S. Department of Agriculture (USDA) to distribute to farmers and agriculture businesses. However, Title IV of the CARES Act authorizes an unprecedented $500 billion to the U.S. Treasury Department “to make loans, loan guarantees, and other investments” to businesses, states, and municipalities.

“While farmers and advocates of rural communities are closely watching how USDA will distribute the $9.5 billion allocated through the CARES Act, little discussion or oversite is being given to this other, much larger pot of money with few strings attached,” said Wenonah Hauter, Executive Director of Food & Water Action. “Treasury Secretary Mnuchin must make sure that money from this $500 slush fund doesn’t flow straight from the Treasury Department into the pockets of large corporations, including the food and agricultural corporations that already have a stranglehold on the market.”

“During this crisis, relief must be prioritized for the frontline workers and farmers who are the backbone of America’s food supply,” said Jason Davidson, food and agriculture campaigner with Friends of the Earth. “Consolidation in food and agriculture has already taken a toll on the security of our food system. The Trump Administration must not use Title IV funds to place more power in the hands of corporate agribusiness to wield against small farmers.”

Large agribusinesses have spent the last few decades consolidating their market power through horizontal and vertical mergers. Farmers today buy inputs from and sell into a tightly consolidated market, depressing farm income while raising prices consumers see at the grocery registers. For example, the top four beef processing firms slaughter four out of every five cattle in the U.S. Yet farm wages are stagnant, with medium farm income at negative $1,840.

The pandemic exposes the weaknesses in this tightly consolidated system and the detrimental impacts on farmers, workers, and rural communities. It is no surprise that slaughterhouses, where workers face grueling conditions in close quarters, are epicenters of the coronavirus pandemic. Additionally, the rise in large slaughterhouses — such as Smithfield’s Sioux Falls, SD plant, which processes 4 to 5 percent of all U.S. hogs — obliterated locally owned slaughterhouses. This means the closure of a single plant due to an outbreak in COVID-19 leaves thousands of farmers with no market in which to sell their livestock.

Friends of the Earth: Aisha Dukule, [email protected], (202) 893-3502

Food & Water Watch: Jackie Filson, [email protected], 860-306-0108