Family farmers and independent producers are concerned that agricultural markets are consolidating to the point where their access to open markets and their ability to compete have been stifled. These farmers and producers believe that the larger players are monopolizing the market, and are dictating the terms of agriculture contracts and the prices of agricultural commodities. They also believe that agribusinesses and other large companies are unfairly competing in the agriculture market, and are engaging in unfair and predatory business practices.
Family farmers and independent producers are concerned that their needs are not being taken into account in current antitrust reviews. In fact, the focus of the antitrust review by the Justice Department and the Federal Trade Commission is on consumer impact. Yet, because agriculture is unique, special considerations are necessary for this sector of the economy. For example, there already is an antitrust exception for agricultural cooperatives. However, it appears that the agriculture cooperative antitrust exemption has not been adequate in providing family farmers and producers equal access to competitive markets. The impact on independent producers and family farmers should be considered when mergers and acquisitions in the agriculture industry are being analyzed by federal antitrust agencies.
The Department of Agriculture has special expertise on agricultural markets and farm policy. While under the DoJ/USDA Memorandum of Understanding, the DoJ Antitrust Division can consult with USDA when it is reviewing an agribusiness merger, this consultation is not a required element of the antitrust review process. The Justice Department does not have the expertise necessary to evaluate these transactions with an eye towards the needs of farmers and independent producers. USDA is in the best position to do this.
In addition, farmers and independent producers are concerned that unfair and predatory business practices in the agriculture arena are not being investigated, and that DoJ and USDA are not doing enough to enforce the antitrust and agriculture competition through the Packers & Stockyards laws.
The bill I introduced on March 20 addresses both concerns regarding agribusiness concentration and unfair business practices in the agriculture industry. First, it would inject the expertise of USDA in the antitrust review process of an agribusiness merger, by requiring USDA to evaluate whether the merger would "substantially harm the ability of independent producers and family farmers to compete in the marketplace", and by giving USDA an opportunity to negotiate with the parties about any concerns during the DoJ/FTC merger review process. The evaluation by USDA would have to be completed within this time frame so as not to disrupt the DoJ/FTC merger review process. In addition, USDA participation in the DoJ/FTC process from the beginning allows the merging parties an opportunity to negotiate any necessary limitations/conditions on the transaction to address USDA concerns, without prolonging the current HSR process.
If DoJ/FTC decides not to challenge the merger and USDA still is not satisfied with the terms of the transaction, within 30 days of DoJ/FTC's decision not to oppose the transaction USDA may challenge the merger in court, based on the "substantial harm to the ability of independent producers and family farmers to compete in the market" standard. USDA must prevail in court with respect to this standard in order to stop or impose conditions on an agribusiness merger.
My bill does not automatically stop a merger. USDA must prevail in federal court to stop or impose conditions on a merger, based on concerns for family farmers and independent producers. My bill does not provide for USDA to challenge a merger based on the antitrust laws. Therefore, DoJ and the FTC are not pitted against USDA. They have different statutory charges in terms of evaluating a merger. My bill does not require USDA to challenge a merger. In fact, it encourages the parties to negotiate any changes/conditions either during the HSR process or within the 30 day time frame after DoJ/FTC decides not to oppose the merger. My bill does not usurp the antitrust responsibility from DoJ or the FTC. The process that my bill creates for the USDA does not displace the DoJ/FTC antitrust review, rather it strengthens USDA's ability to make its concerns known and considered when a merger is reviewed without disrupting the current process.
Second, my bill would expand USDA's ability to investigate and bring enforcement action against agribusinesses and producers who engage in anti-competitive, unfair or monopolistic business practices. The proposal expands the current authority of USDA to regulate these activities in the livestock/hog market under the Packers & Stockyards Act to apply to all agricultural commodities.
I look forward to working with others who have proposals and are interested in addressing agriculture concentration so that we can do what is best for family farmers.