The political economy of concentration in the grain trade

A wide body of academic literature and popular media has raised concern about increasing corporate power in the grain trade. Agriculture and the wider food trade have historically been highly regulated by the state, and the relationship between private and public interests have been complex. The question of state involvement in informing concentration in the grain trade has been theorized, but largely unexplored in current literature. Few studies have directly detailed the historical rise in concentration in the grain trade from an institutional perspective. This essay seeks to provide a historical overview of changes in the composition of the trade in grain within the United States and detail the role state intervention played in informing trends in grain processing and wholesale trade. Using data from the IRS Corporation Sourcebook and Economic Census, I estimate the share of top 1% businesses and calculate the Gini coefficient in asset and sale concentration among participants of the grain trade between the years 1964-2010. This essay argues that changes in state policy toward export orientation and a withdrawal of state involvement in the grain trade informed pressures toward greater accumulation among top firms in the sector. The drive toward increasing export capacity in a competitive world grain market resulted in higher degrees of concentration in the grain wholesale and grain processing sectors.