This week the Des Moines, Iowa suburb of Ankeny will play host to the first workshop jointly held by the Department of Justice (DOJ) and the US Department of Agriculture (USDA) that will take a look at consolidation and competition in agricultural industries.As Christopher Leonard of the Associated Press reports, many in the industry believe that this workshop will provide insight into the seriousness of the Obama administration in taking on consolidation and competition issues in agriculture. Administration officials believe the meeting on Friday will provide those interested in these issues, from attorneys to regulators, "their first chance to work side-by-side and examine the concentration of power in rural America."
Farmers are certainly interested in what will come out of the workshops to see if their "long-standing complaints" about big business drowning out smaller operations is actually addressed, or if the meetings are mere "political theater." Leonard quotes Tara Smith, the director of congressional relations for the American Farm Bureau Federation, as stating, '"This is certainly a much brighter spotlight than we've seen in the last 10 years [.]"'
Christine Varney, the head of the DOJ's antitrust division has complained that the previous administration was too hesitant to act when concerns over concentration were raised. Varney hopes to change this perception and believes vertical concentration in the market is worth taking a closer look at.
USDA Secretary Vilsack will be joining Varney at the workshops. Vilsack hopes what they hear and learn will yield "policies to foster competition in agriculture, rather than scattered enforcement actions." Additionally, Vilsack stated that if the competition practices are fair, then the government will take no action. It is their hope not to stifle large agricultural business operations, but to create a level playing field.
For their part, as Leonard reports, industry groups do not believe consolidation in the industry leads to price fixing or a lack of competition." The American Meat Institute has filed testimony in which they argue that companies have become consolidated because government regulations require large monetary investments that lead to the merger of companies in order to afford the costs of regulations.
Regardless, both sides, in theory, now have an audience to air their views on the issues. There will also be four other meetings following the meeting in Iowa.
To read the AP article by Leonard, click here.
To read previous US Agricultural & Food Law and Policy Blog Post on the announcement of the workshops, click here.
Posted: 03/08/10
