Blog | February 3, 2010

Antitrust and Agriculture

Department of Justice sealJenThe word “antitrust” has recently resurfaced and finally it’s not all about Microsoft. This time it involves all of us because these antitrust investigations look at the agriculture industry and since all of us eat, we all have a stake in the outcome.

Antitrust enforcement is meant to maintain competition and fairness in the marketplace, protecting all stakeholders—sellers, buyers, and consumers—by ensuring businesses compete for market share instead of wielding too much power over the market.

As Alicia explained in January’s Ask Farm Aid, corporate concentration has been rampant in the agricultural sector for decades now. That concentration has been encouraged by the fact that antitrust laws have rarely been enforced in agriculture. That’s why we find ourselves with a food system in the hands of a few powerful corporations.

Two of those corporations are currently under investigation by the Department of Justice (DOJ) for potential antitrust violations: Monsanto in the seed industry and Dean Foods in the dairy industry.

DOJ’s investigation into Monsanto looks into soybean seeds amid allegations that Monsanto is forcing farmers to buy its new genetically-engineered (GE) soybeans instead of first-generation, lower-priced GE beans. Farmers have had trouble finding the lower-priced seeds and some are speculating that Monsanto is making it hard to find them because Monsanto’s patent for that seed expires in 2014. That means that starting in 2015, farmers will be able to plant saved seed without paying Monsanto every year.

As far as Dean Foods is concerned (a company which controls up to 70-80% of the liquid milk market in some regions of the country), the DOJ has filed a suit to challenge Dean’s acquisition of two processing plants from Foremost Farms, a Wisconsin-based dairy processor. The suit will examine the impact the acquisition has had on farmers and milk sales to schools, grocery stores and convenience stories in Wisconsin, Michigan and Illinois.

Simultaneously, the Department of Justice is working jointly with the Department of Agriculture to hold public workshops throughout 2010 to solicit comments about the impacts of concentration in agriculture as a whole.

Farm Aid heartily applauds these actions—a lack of competition in agriculture might just be the toughest obstacle family farmers face. We’ve been taking part in strategy calls with farm groups across the country to get ready for these meetings. While making sure family farmers’ voices are heard is going to be the main focus, consumers also have an important point of view that needs to be stated loud and clear. We saw what happened to the banks that were supposedly “too big to fail.” We can’t afford to go down that same road with our food. Our democracy has its roots in farmers and it’s a democratic food system in the hands of many that has the best ability to feed us all. Below is the list of DOJ/USDA workshops—if one is in your neighborhood, mark your calendar. If not, stay tuned for opportunities to make your voice heard on this important issue.

Dates, Locations, and Topics:

March 12, 2010 – Ankeny, Iowa
Issues of Concern to Farmers
Introduction to the workshops series with a focus on the issues facing crop farmers. Discussion topics may include seed technology, vertical integration, market transparency and buyer power.

May 21, 2010 – Normal, Alabama
Poultry Industry
Discussion topics may include production contracts in the poultry industry, concentration and buyer power.

June 7, 2010 – Madison, Wisconsin
Dairy Industry
Discussion topics may include concentration, marketplace transparency and vertical integration in the dairy industry.

August 26, 2010 – Fort Collins, Colorado
Livestock Industry
This workshop will focus on beef, hog and other animal sectors. Topics may include enforcement of the Packers and Stockyards Act and concentration.

December 8, 2010 – Washington, D.C.
This workshop will look at the discrepancies between the prices received by farmers and the prices paid by consumers. As a concluding event, discussions from previous workshops will be incorporated into the analysis of agriculture markets nationally.

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