"In a pure monopoly, a single firm controls the total supply of the whole industry and is able to exert a significant degree of control over the price by changing the quantity supplied. The reason a pure monopolist has no competitors is that certain barriers keep would-be competitors from entering the market. Depending upon the form of the monopoly, these barriers can be economic, technological, or legal."
(
Wikipedia, visited 2009-05-26),
"Under monopoly, output is normally lower and price higher than under competitive conditions. A monopolist may also be deemed to earn supra-normal profits."
(Management Information System on Legal Approximation (UEPLAC),
Monopoly, 2007, visited 2009-05-26)
Government Intervention
"Some monopoly situations actually arise from government actions such as the exclusive right granted by a government to a public or private sector agent to purchase agricultural products from farmers. Other monopolistic tendencies result from control of an exclusive source of supply […], from market fragmentation, economies of scale, poor infrastructure and lack of credit. Governments can reduce these tendencies by adopting policies that encourage competition and free trade and ensure that artificial barriers to entry are removed for domestic and foreign suppliers. However, in the case of natural monopolies, where economic efficiency requires price to be set below the average cost of production but unregulated monopolies are tempted to set a price above the full costs of production, governments are likely to assume responsibility for producing the good or service themselves. The alternative is for government to regulate the price and/or output of private sector provision.
A common feature of most public agencies dealing with agriculture was the granting of monopoly rights over factors deemed necessary for their tasks […]. Governments paid the capital and recurrent budgets of these agencies, or made good their current deficits whenever sales revenue did not cover costs. Over the years, in many countries subsidies on inputs and equipment and the burden on the government budget of the recurrent and capital costs of the organizations contributed in no small way to central government budget deficits and to increased foreign exchange borrowings to cover the deficit. A consequence of the policies pursued was the creation of large unchallenged public organizations, often controlled by politically appointed managers only loosely accountable for their performance."
(Food and Agriculture Organization (FAO),
Factors influencing the decentralization decision, 2006, visited 2009-05-26)
Government Subsidies and Tariffs
Government subsidies are given to U.S. capitalist farmers and
agricultural monopolies, enabling them to undercut their competitors around the world. These imperialist agricultural policies have a ruinous impact on semi-colonial countries, where millions of workers and peasants depend on the export of raw materials.
(adapted from Williams, M.,
"U.S., French Imperialists Battle to Pillage Ivory Coast Cocoa",
Seeing Red, 2002, visited 2009-05-26)
"Although Africa has a competitive advantage in its agricultural products, demand for them in the industrialized world is low because of protective trade policies. This is particularly true in the European Union because of its Common Agricultural Policy (CAP). The EU imposes heavy tariffs and taxes on agricultural imports and provides subsidies to domestic growers. Nor are these domestic producers small farms; rather they tend to be large
agricultural monopolies. U.S. and EU subsidies are so extensive that Sweden and Oregon compete with Kenya in the sugar trade. The CAP also guarantees that African products cannot be sold competitively in the EU because of huge import tariffs. Without these tariffs, some African agricultural products would dominate first world markets."
(Shapiro, R.,
American Enterprise Institute for Public Policy Research, visited 2009-05-26)
Arguments for the Breakdown of Agricultural Monopolies
Breaking up prevalent
agricultural monopolies gives farmers control over their own goods and strengthens the market system through competition between farmers. The fixed price of monopolies causing allocation inefficiency within the economy is replaced by price dictated by supply and demand for agricultural goods.
In addition, some organizations maintain that "hunger and starvation exist mainly due to the destruction of food surpluses to keep up the price of food and the need to maintain the profit levels of the
agro-monopolies."
(
Marxism and Darwinism, visited 2009-05-26)
