Ag Policy Blog

Groups Call on Congress to Freeze Agribusiness Mergers

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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A coalition of more than 200 groups want lawmakers to join legislation in Congress that would freeze mergers in agribusiness for companies with combined sales or assets higher than $175 million.

The coalition sent a letter to members of Congress, noting "there has been a wave of food and agribusiness mega-mergers that have further consolidated one of the most concentrated sectors in the U.S. economy."

The last time such concern was raised about agricultural market concentration, the Obama Administration put together a joint task force with Department of Justice and USDA people. Hearings were held across the country with some emotional testimony. While each hearing was different, a few of the hearings got pretty heated. Promises were made to protect farmers who testified from retaliation. Then the attorney in charge of Antitrust at DOJ walked away and took a job in the private sector. Eventually a report was produced that ended up on shelves somewhere. https://www.justice.gov/…

Now these 213 groups, summarized as "farm, food, rural, faith and consumer advocacy organizations," seek lawmakers to cosponsor bills by Sen. Cory Booker, D-New Jersey, and Rep. Mark Pocan, D-Wisconsin, who introduced the Food and Agribusiness Merger Moratorium and Antitrust Review Act of 2018 companion bills.

The groups argue in their letter that there are too few companies that control the supplies farmers buy and the markets farmers and livestock producers sell into. This consolidation contributes to farmers paying more for inputs, but getting declining prices for their commodities. The letter points to the oft-referenced data point that net farm income has declined by half since 2013.

The groups also point to the contracts vertically integrated companies require farmers to sign. https://www.foodandwaterwatch.org/…

“With the recent onslaught of agricultural mega-mergers and acquisitions, including those of multinational giants like Chechen and Syngenta, Bayer and Monsanto, and Marfrig and National Beef, there has never been a more pressing time for Congress to take action,” said Joe Maxwell, executive director of the Organization for Competitive Markets. “OCM is encouraged by the groundswell of organizational support and proud to stand with more than 200 groups calling for a crackdown on monopolistic corporate practices that hurt farmers, workers, consumers and our communities.”

Booker and Pocan's bills would put an 18-month moratorium on mergers of companies with more than $176 million in sales or assets and establish a commission to study the impacts of consolidation in the food and agricultural sectors. The commission would also recommend any necessary changes to federal antitrust statutes or other laws and regulations to restore a fair and competitive agricultural marketplace.

“Corporate consolidation has long been one of the greatest challenges plaguing family farmers, ranchers and rural communities,” said National Farmers Union President Roger Johnson. “By allowing us to step back to evaluate and strengthen the United States’ antitrust framework, the merger moratorium is a meaningful first step in stemming the tide of concentration in the agriculture and food sectors."

Chris Clayton can be reached at Chris.Clayton@dtn.com

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