What is a typical consequence of agribusiness integration?

• A. It concentrates control and power in a smaller number of firms
• B. It decentralizes decision-making to small farmers
• C. It reduces efficiency and profit
• D. It eliminates marketing channels

Answer: (A)

When large agribusiness firms grow by owning multiple stages of production and distribution, they gain greater control over prices, terms, and access to markets. This centralized power comes from both vertical integration (controlling input supply, processing, and distribution) and horizontal integration (merging with or dominating more firms in the same sector). As a result, a smaller number of firms holds much more influence, shaping market outcomes and bargaining power across the chain. That concentration of control is the typical consequence of integration. While such growth can boost efficiency and profits through economies of scale, the defining idea is the shift toward fewer, more powerful firms. Decentralization, reduced efficiency, or elimination of channels would not describe the common impact of integration.