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Department of Justice Drops Monsanto Antitrust Investigation Without Explanation

December 5, 2012

In late November, U.S. Department of Justice Antitrust Division decided to drop its investigation of Monsanto’s control over much of the U.S. seed market.  Monsanto has gained this control through the buyout of numerous seed companies and its use of the patent system to extract concessions from farmers who buy the seed.

As noted by commentator Tom Philpott, the Justice Department made no official announcement that it was dropping the investigation.  Nor has the Department provided the public with the rationale or basis for its decision or with any grounds on which the Department can withhold information on the investigation from the public.

This silence is in marked contrast to the Department’s conclusion in 2011 of an antitrust investigation of Perdue Farms buyout of poultry processing facilities owned by Coleman Natural Foods.  At the conclusion of that investigation, the Department released a 2-page press release, detailing both factual findings and the basis for the Department’s decision to close the investigation.

The behavior of the Justice Department in concluding the Monsanto case is essentially a betrayal of assurances made by the Obama Administration only two years ago that it would take the concerns of farmers and ranchers about the corporate concentration of agricultural markets seriously.  In 2010, USDA and the Department of Justice held five listening sessions with farmers in sites across the country on issues of Agricultural Market Competition and Regulation.  The first of the sessions focused on seed technology, vertical integration, market transparency and buyer power.  The issue of the concentration of seed production and intellectual property rights in the hands of one large corporation, Monsanto, was viewed  as one of the most important issues.

Going into the listening session, USDA analysis showed that corn seed prices had risen 135 percent since 2001.  Soybean prices went up 108 percent over that period.  By contrast, the Consumer Price Index rose only 20 percent in the same period.  Recently, Monsanto demonstrated its market power yet again by announcing its intention to raise the price of corn seed by 5 to 10 percent for the next growing season.

Presumably, public funding was used to conduct the investigation of Monsanto.  And certainly, the public through the Farm Bill’s commodity support programs is involved with subsidizing commodity farmers and, through the prices charged to farmers for inputs, also thus indirectly subsidizing Monsanto.  At the very least, we deserve an explanation from the Department of Justice of why it has closed an investigation of Monsanto’s concentration and power over the nation’s market for seed.

Categories: Competition & Anti-trust, Food Safety

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