Some Concerned Smaller Farmers May Have an Ally in the Justice Department

Like many business, over time American agriculture has become more centralized to the point where today, 2 percent of all farms account for half of all agricultural sales.

As National Public Radio’s John Burnett reports, this concentration in the agricultural industry has caught the eye of the antitrust division within the United States Justice Department, and now the antitrust division is “scrutinizing monopolies in agriculture as a top priority.”

This could spell good news for smaller farmers who have long complained that the current nature of the American agricultural industry prevents them from being able to compete at the market place. As this blog has previously reported, beginning next year the Department of Agricultural and the Justice Department will hold joint workshops across the country to discuss the issues and potentially ”anti-competitive conduct in agricultural markets.

The Organization for Competitive Markets members, which held their annual convention in St. Louis and had a session entitled “Confronting the Threats to Market Competition,” were pleased by the announcement. The nonprofit, nonpartisan group consists of academics, farmers, and others with concerns about the direction of American agriculture. Executive Director Fred Stokes, “a Mississippi rancher and registered Republican,” states in the Burnett story that ‘"We want to stop this rubber-stamping of every ag merger that comes down the pike . . . We want to call in the predators that are putting our farmers and ranchers out of business. We want them to do their job."’

Under President Bush’s antitrust division mergers were approved that created the “nation’s largest milk processor . . . the largest hog processor . . . [and] one of the nation’s largest cattle feeders.” According to Dave Balto, a public-interest attorney, the upcoming joint hearings with the Justice and Agricultural Departments are “unprecedented.” Burnett quotes Balto as stating, ‘"Typically, antitrust enforcers sit at their desk and wait till the phone rings, and then decide whether or not to open an investigation[.]"’

The Justice Department has indicated there are three areas of concern they want to take a look at. The first area is seed companies, followed by beef packing, and the third area being dairy production. It is in these areas where competition for smaller farmers is among the most difficult. It remains to be seen if these joint workshops or hearings will lead to any legislative or regulatory changes in the industry.

To read or listen to the Burnett story, click here.

Posted: 08/25/09