GRASSLEY: During this conference call every week, you've often heard me talk about what I call a need to address the unfair practices and a word called monopsony as opposed to monopoly, which a monopsony applies to agriculture and agribusiness and, particularly, about vertical integration in agriculture.
I've also said that I plan to continue these efforts in the new Congress. So, today, I'm introducing my Agriculture Competition Enhancement Act. I also introduced the same bill in the last Congress. The bill seeks to ensure a level playing field for all participants in agriculture and, also, is intended to make sure that family farmers, as a consequence, aren't left behind.
Senator Kohl of Wisconsin is, once again, a lead co-sponsor on this bill. So that makes it a bipartisan bill. Family farmers and small producers deserve a fighting chance in the marketplace. We've been tinkering around the edges in this area for years.
This legislation attempts to deal with the problem head-on in a comprehensive way. So let me tell you about six components.
One, directing the Justice Department and the Federal Trade Commission to draft agriculture-specific guidelines when reviewing mergers in agriculture.
Two, creating an agriculture competition task force to assist the Justice Department and the Federal Trade Commission in drafting agricultural anti-trust guidelines, examine problems in agriculture competition, and coordinate activities to address ant-competitive practices.
Three, amending the anti-trust laws to shift burden of proof in agriculture mergers to the defendant.
Four, requiring the Justice Department and the Federal Trade Commission to conduct a post-merger review of certain agri-business mergers five years after they've been approved.
Five, formalizing the Department of Agriculture's review of ag mergers.
And, lastly, authorizing additional resources to GIPSA and the Department of Justice to review agriculture transactions.
Jeff Caldwell?
QUESTION: Yes. Hi, Senator Grassley.
Can you talk a little bit about some of the first point there about access to the guidelines for ag mergers there?
GRASSLEY: Yes. I'll talk in a generic way, and if that doesn't answer your question, follow up.
QUESTION: OK.
GRASSLEY: Basically, it's from my premise that people in the Justice Department and maybe even the Federal Trade Commission don't have enough of an understanding of agriculture to really make decisions that would take family farmers adequately into consideration. And it's to put in place people with that expertise and something that the Justice Department and the FTC would have to rely upon.
It would not be dispositive positions that they take, but it would be very advisory and with the intent to bringing a point of view on a merger that may not otherwise be there.
QUESTION: And what types of folks would you be identifying to take those positions then?
GRASSLEY: Well, I would be identifying people that know something about agriculture, but we aren't real specific in our task force of who serves.
QUESTION: Thank you.
GRASSLEY: Yes.
We would be trying to have it be kind of representative of agriculture without being too specific in the way that it calls for representatives of the agriculture industry. It would take into consideration people from the State Department of Agriculture, state attorneys general, farmers, ranchers, independent producers. But it isn't real definitive exactly who should be appointed.
QUESTION: I see.
GRASSLEY: OK. Tom Rider?
QUESTION: Good morning, Senator.
Senator, do you think the Obama administration will be a little more receptive to this enhancement act that you're talking about? Will you be able to get some help from them in convincing your colleagues to pass this?
GRASSLEY: Yes, I think so. I think that this administration and the Congress being a little more populous oriented helps us.
QUESTION: And what do you think your chances are?
GRASSLEY: Well, I just think they're better. That's about all I can say at this point. Until I start talking to people, you know -- and don't forget, we've probably got nine or ten new senators that have to get acquainted with me, I have to the acquainted with them. They've got to know where I'm coming from and get them to consider this.
Gene, Iowa Farmer?
QUESTION: Yes, Senator. The post-merger review, could you give me any more information of what that might entail?
GRASSLEY: Yes. It's -- it's probably locking the barn door after the horse is stolen because you can't undo a merger as a result. But it gives us a chance to have an outside group with total responsibility to look at something five years down the line and say did this help competition or did it hurt competition.
Tom Steever?
QUESTION: Good morning, Senator.
I see that you introduced a bill called the Hedge Fund Transparency Act of 2009 in an effort to close some loopholes in security laws.
How might that help in the -- as far as commodities trading is concerned?
GRASSLEY: Probably not at all. Unrelated to it, I don't know whether I have thought your question -- well, I haven't thought your question through because I just got hit with it, and so I've never really thought of it being involved there.
I haven't really thought of my hedge fund bill changing anything in the sense that anything that's going on now would be illegal. What it is a transparency bill. And I introduced this two years ago and everybody was kind of laughing under their breath because, you know, hedge funds are made up of people with $5 million or more. And so everybody says, well, if you can invest $5 million, you don't need the government looking out for you.
But you get these trillions of dollars trading and you don't know who's trading them and what they're doing. You don't even know what hedge funds exist, how much money they have except we've got a rough idea. And it's -- at the peak, it was -- worldwide, I don't know. Just in the United States, one-plus trillion dollars. Maybe one and a half-plus trillion dollars.
And nobody knows anything about it. Well, then you look back at everything that's happened to our credit crunch now that's throwing us into recession. And there's a lot about finance nobody knows anything about. There just isn't enough transparency.
So what we're trying to do is have registration bringing transparency to it. And, through transparency, we hope to reestablish credibility in the financial system because nobody's lending now because nobody -- nobody -- there's no credibility, so confidence. Confidence would be a better word. And transparency, I think, builds confidence.
Now, that bill, in and of itself, is not going to get us out of recession, I hope you understand. But hopefully, it keeps us getting into one in the future.
Ken Root?
QUESTION: Senator, can you tell me your reaction to the new secretary of agriculture deciding he's going to keep this discussion and comment period for payment limits open another 60 days?
GRASSLEY: Well, let's -- obviously, I think it's a good thing because we reacted to -- oh, wait a minute. I was thinking of -- of the other thing on -- engaged -- actively engaged in farming. Is that what you're talking about?
QUESTION: No, sir. It is looking further at whether there should be more comment and review on payment limits.
GRASSLEY: Yes. But they're all -- they're all good. And I think we're talking about the same thing.
Actually, what I brought up is just a small part of the bigger picture. And I'm glad that they're doing that.
With the small part of it I was referring to actively engaged in farming, I think, it's particularly helpful that they left it open because I don't think the previous administration had gone far enough in quantifying that activity engaged in farming is all about.
And so doing, not really affecting change that we've sought in the Farm Bill this year -- of last year. So then all the other things on payment limitations, it's not too late to get that right as it applies to the next five years.
And so I think having a new personal look at it is very, very good. And, particularly, having Governor Vilsack look at it is very, very good.
Can I go on, Ken?
QUESTION: Well, sir, what I'm looking at is that it appears there's going to be a bipartisan effort here between people like yourself, a conservative Republican, Senator Johanns from Nebraska and those people on the other side of this who want to limit payment for other reasons to where that it actually looks like it's got a chance. Doesn't it?
GRASSLEY: Well, you said better than I did. And you just put quotation marks around the words you just used. Is that OK?
QUESTION: So to speak. Yes, sir. That's fine. Thank you.
GRASSLEY: OK. Dan Skelton?
QUESTION: Good morning, Senator. House Ag Committee chairman, Collin Peterson, reportedly has urged the Obama administration to let the mandatory rules go into effect. Do you support that?
GRASSLEY: Right now, I am not totally satisfied with the way that they have been put in place. And I think a little calmer look at it would be a good thing. Not saying that maybe Governor Vilsack might not come out the same place. If he does, I might not be totally satisfied if he does, but I want -- I want the intent of Congress followed, and I think that is that if Americans ought to know if the meat they eat was entirely made in the United States or it came from someplace else.
QUESTION: So you support the review that's going on?
GRASSLEY: Basically, yes.
QUESTION: Thank you.
GRASSLEY: Chris Clayton?
QUESTION: Senator, I understand the GMA and some other meat groups have sent a letter opposing any notion of raising the ethanol blend in gasoline. And I wanted to ask you, I understand that maybe you and Senator Thune were looking at pushing an amendment on the stimulus package that would boost the blend to 12 percent. Is that accurate?
GRASSLEY: Well, I would surely vote for such an amendment. We do not have our strategy figured out yet. And I can tell you that I've been working very closely with Senator Thune over a period going back maybe to late July and again September when we had meetings in the previous administration to try to move this along.
And we need to move it along because, otherwise, previous decisions made by Congress to up the mandate until you get up to 15 billion gallons by the year 2015, I think it is, would not be worth anything if we don't change it to 11 or -- E-12 or 11, 13, E-14, E-15. It doesn't have to be done a lot, but it's got to be changed to some extent.
Now, what's the grocery manufacturers complaining about?
QUESTION: I guess they wrote a letter to the new EPA administrator yesterday.
GRASSLEY: Yes. I'll bet they're in bed with the oil companies.
QUESTION: I don't know about that.
GRASSLEY: Yes. Anyway, it's still an anti-farm campaign that they're using to cover up the increased price of food. It's the very same thing they were up to last May -- last April.
QUESTION: Well, to follow up, how do you think the Senate itself would treat the effort to push the -- push the blend up in the stimulus bill?
GRASSLEY: I would vote for it. It's not really a thing for the stimulus bill, though, quite frankly, because I want to give you a broader answer to your question unrelated to just this issue.
There's a lot of things that are in the stimulus bill that don't have anything to do with stimulus. And they are long-range change in policy. We should only be doing, in this stimulus bill, what can be done in the next two years and are really creating jobs.
Now, maybe somebody in -- in ethanol would say, well, if you don't do this, it's going to be bad for the ethanol industry. But -- not short term because we've still got our -- we've still got some room for our present mandates to go into effect. So we're going to have an energy bill out here within just a few weeks. It would be better put there.
But if it comes up on the stimulus bill, obviously, I will support the ethanol industry.
QUESTION: Thank you, sir.
GRASSLEY: By the way, before we go on, something that irritates me about the Grocery Manufacturers Association. They're out here trying to knife the farmers in the back. And last year, they reported these record profits again. And how did they get those record profits?
They had this campaign against ethanol last year. They upped their prices because corn was $8. Corn's down to $3.53 at New Hartford, Iowa. And the price of food hasn't gone down one penny.
I go to Hy-Vee and other places -- Fareway and like that in Iowa. I know what price food is.
Chris Clayton?
QUESTION: That was me, Senator.
GRASSLEY: Oh, I'm sorry.
Stacia?
Gary Diguiseppe?
QUESTION: Senator, on the stimulus package, we've seen proposals for increased rural spending emerging from Senator Conrad and Senator Lincoln. I don't know what your standing is on this proposal, but would you be more likely to support it if such measures were included?
GRASSLEY: Which measures are you talking about Blanche Lincoln putting in?
QUESTION: I'd have to go through the list, but they...
GRASSLEY: Well, no.
QUESTION: ... a proposal that they had proposed as a free-standing legislation to flues spending on rural highways, on rural health care. That's an issue you've dealt with, also, recently.
GRASSLEY: Yes. Well, I surely would -- I surely would on highways. And if there's -- if there's investment in rural health care that you can consider one-time spending and it creates jobs, too, then I would support it.
But I think you've got to think in terms of it being timely, being temporary, and creating jobs. That's kind of the three T's that we measure it by.
And I'll give you an example of what shouldn't be in this. Head Start maybe needs more money, but this creates Head Start programs for 55,000 people. You hire the teachers for them. Are you going to fire those teachers at the end of two years? That's going to be hard to do.
But President Obama is telling his own Democrats that this -- this money that we're putting in the stimulus bill isn't going to be what we call -- what we call here "put in the baseline." It means that it's not in the baseline to build on for future expenditures; that it's always going to be there.
No, it's not always going to be there. This money is going to be spent in two years, and that's the end of it. So we can't make our job harder down the road. So one-time expenditures and building a highway is one of them.
Anything else, you know, I'd have to think about as I told you that.
QUESTION: OK.
GRASSLEY: Go ahead.
QUESTION: On transportation, what do you think of Senator Kohl's bill to repeal the railroad industry's anti-trust exemption?
GRASSLEY: Oh, that shouldn't be in there. That should be in a commerce bill or in a judiciary bill and work its way through the committees and be well thought out.
QUESTION: OK. I wasn't talking about it as a part of the stimulus package.
GRASSLEY: Oh.
QUESTION: Do you support that concept?
GRASSLEY: I voted for a bill out of judiciary -- I don't know whether it's the same one you're talking about -- that would question some of the monopoly or lack of competition, I should say -- I don't want to say monopoly, but lack of competition in transportation. And it's particularly true in the case of coal for utilities.
QUESTION: So do you think that the railroad should lose their anti-trust exemption entirely?
GRASSLEY: No.
QUESTION: OK. Thank you.
GRASSLEY: Philip Brasher?
QUESTION: Yes, Senator, I have a couple of stimulus questions.
First of all, there has been some concern in the wind industry about foreign manufacturers benefiting from the tax incentives. Senator Bingaman wanted to target something at American manufacturers.
What has happened to that?
GRASSLEY: Well, I can't -- well, if it's in the bill -- well, it's got to be -- if it was in -- if it was in Senator Baucus' marks, a week ago today when we worked on it, then it's still in the bill. But I don't believe that -- I was there for all of that meeting, five or six hours of that meeting, and I don't believe that we discussed that. So I don't -- I can't really answer your question, Philip.
QUESTION: OK. Another question. What is with this money for fish farming in the stimulus bill supposedly to cover higher feed costs? Why just aqua-culture?
GRASSLEY: Well, I'll bet you the reason is is because it's a follow-on of what we did for dairy. But I have not heard that discussion, so your question is new to me.
But I'll bet you they're looking at what we did for dairy in the Farm Bill, and somebody's figuring out it ought to be there for the -- for the fish farmers down in Mississippi, I would bet.
QUESTION: Well, what do you think of it?
GRASSLEY: Well, no. I can -- I'll bet I can -- if I had that bill in front of me, 400 and some pages, or the House bill, 800 and some pages, I could go through there on every page and find something that shouldn't be in there. Why? It's -- the stimulus package is used as an excuse to get other things done that might not get done.
And our long-term policy -- and you heard me tell previous people in this news conference -- that we ought to be dealing with money that can be spent in the next two years and creates jobs and doesn't -- and doesn't guarantee any long-term obligation to future appropriators. And that's exactly what Congress Daily said that Congressman Miller of California, on education, reported that President Obama told him that none of this stuff is going to be in a baseline.
GRASSLEY: So something like that is a policy that should be thought through in the Agriculture Committee. And to what extent does this need cost thing got to do anything with creating jobs? You know, job creation, temporary, stimulus, and timely is some of the broad things we have to be looking at and measuring this bill by.
Jean at Agrinews?
OK. Anybody got a follow-up or anybody I left out?
OK. Thank you all very much.