Foodopoly and Corporate Governance, Book Review Example

Writing from the expert’s perspective, Hauter (2012) talks about the lobby behind the world’s and America’s food industry. She concludes that while corporations and even food agencies state that production is designed to help farmers and consumers, it is only serving the interest of large companies. The author goes even further, stating that large corporations are responsible for the obesity epidemic worldwide. The size of hog farms grew in the past few decades, and companies tried to rationalize this movement stating that it enables more effective production and benefits customers through lower prices. In reality, farmers now receive cents for their crops, and large food packaging companies control what people eat.

The main problem addressed through the book is that the regulators of America failed to realize the impact of corporate lobbying on people’s health and well-being. Looking at the external analysis of the market, it is evident that the gradual and continuous deregulation of the food and agriculture market led to companies being able to shape policies to eliminate competition of smaller firms. This, in turn, reduced the number of options people have today to choose their food, and minimized small farms’ profits. The corporate decisions made by companies were based on maximizing profits, and this is also true for large supermarket chains, such as Wal-Mart. The supply chain of the company is designed to favor large corporations, who are able to comply with different criteria and provide the price asked for by Wal-Mart. As the company is aiming for maximum profit, two of the stakeholders are disadvantaged: consumers, and small farms.

The lack of anti-trust legislation in America within the food and agriculture business created an unfair competition. Large companies gained a competitive advantage, and pushed small companies out of the market, or bought them up. The top food processing firms are now controlling more than 60 percent of the food market: simply saying: they determine what people eat. This corporate competitive strategy of increasing market share and profits puts consumers into a vulnerable position. Farmers that are still selling corps for large food manufacturing and packaging companies earn less than the average living wage in America, while food companies realize record profits. As farmers earn less, they slowly go out of business, and give way for larger farms, owned or sponsored by food manufacturers. The companies in question have also used their size and influence to shape the political scene to favor their products. They even gained support from the government for subsidized irrigation systems, while smaller companies were not eligible for support. Taking advantage of the power and size of the company to influence political decisions is a form of corruption. Companies also lied to the public about fair policies and made an impression that consumers had a choice of products, while many of the brands were owned and produced by the same giant food packaging company.

The main strength of the book is that it reveals not only the corporate actions of the companies in the past decades, but also puts it in the context of policies and politics. The author states that the responsibility is not only the large companies’, but also the governments’ that let them abuse their power.

While the author provides a clear indication of what people can do to support the movement, unfortunately, reshaping an already operational free market would not happen overnight. Large food manufacturers have a great share in the marketplace, and can use their lobbying power to fight back against movements. Future work based on methods of collaboration between governments, consumer groups, and farmers needs to be completed to make change happen.

References

Hauter, W. (2012) Foodopoly: The battle over the future of food and farming in America. New Press.