Grassley, Kohl, Thune Work to Keep Competition in Agriculture

WASHINGTON – Senators Chuck Grassley, Herb Kohl and John Thune today introduced legislation to ensure a level playing field for all market participants in the agriculture industry, including the independent producer and family farmer.

            “With the number of anti-competitive mergers that the Justice Department has approved, it’s very clear they haven’t figured out that we’ve got a problem. This lack of enforcement leads me to believe that not only do our antitrust regulators need more resources, we also need to beef up our laws to address vertical integration and concentration. Family farmers and small producers deserve a fighting chance in the marketplace.  We’ve been tinkering around the edges for several years now.  This legislation attempts to deal with the problem head on,” Grassley said.

            “Concentration in the agriculture industry compromises competition, raises costs for consumers and tips the scale against our small and mid-size farms.  This bill will result in greater scrutiny of agriculture mergers, stepping up the enforcement of laws already on the books and giving the Justice Department and the FTC new tools to maintain competition in our agriculture economy,” Kohl said.

            “Increased concentration in the livestock and other sectors of agriculture is adversely impacting independent producers,” said Thune. “It is past time to update our antitrust laws to address this problem. It is also critical that the Department of Agriculture and the Department of Justice coordinate their efforts and share their expertise and data when scrutinizing the growing number of agribusiness mergers. Steadily increasing levels of market concentration and an alarming number of agribusiness mergers in recent years make these steps necessary. I am pleased to join Senators Grassley and Kohl in support of the Agriculture Competition Enhancement Act and look forward to moving this bill through Congress.“

            The Senators expect the bill to be referred to the Senate Judiciary Committee, but are hopeful that it will also be considered during the farm bill debate.

            Here is a summary of the Agriculture Competition Enhancement Act of 2007. The bill:

• Creates an Agriculture Competition Task Force to assist The Justice Department and Federal Trade Commission in drafting agriculture antitrust guidelines, examine problems in agriculture competition, and coordinate activities to address anti-competitive practices.  The Task Force will be made up of representatives of the agriculture industry, state departments of agriculture, state attorneys general, farmers, ranchers and independent producers, as well as agriculture law and economics experts, the Department of Agriculture, the Justice Department and the Federal Trade Commission.

• Directs the Justice Department and the Federal Trade Commission, in consultation with a working group of the Agriculture Competition Task Force, to draft agriculture specific guidelines to use when reviewing agriculture mergers. 

• Amends the antitrust laws to shift the burden of proof in agribusiness mergers to the defendant to prove that the merger will not substantially lessen competition or create a monopoly in one or more geographic markets.

• Requires the Justice Department and the Federal Trade Commission to conduct a post merger review of certain agribusiness mergers (mergers that submitted second requests for information) five years after they’ve been approved.

• Formalizes the Department of Agriculture’s review of agriculture mergers with the Justice Department and the Federal Trade Commission, so that the Agriculture Department now will be an integral part of the anti-trust approval process in every agriculture merger.

• Authorizes additional resources for GIPSA and the Department of Justice to review agriculture transactions.

• Creates USDA Office of Competition and Fair Practices, headed by Special Counsel for Competition Matters.

• Creates DOJ Deputy Assistant Attorney General with responsibility for agriculture matters.