December 10, 2010
Farmers and ranchers spoke out loudly and clearly about the need for fair competition during the fifth and final US Department of Justice-USDA workshops on Concentration and Regulatory Enforcement in Agriculture on Wednesday, December 8. The focus of this DC workshop was the negative impacts on farmers and ranchers arising from the drastically shrinking number of buyers for their products.
The workshop also took a close look at the market power exerted throughout the food chain by large food retailers, especially Walmart. Walmart is known for the tactics it uses to push down the price of products provided by suppliers, who in turn have the market power to push down the price at the farmgate in order to raise their own profits. The result is often a growing spread between the prices paid by consumers and the prices paid to farmers.
John Crabtree, testifying for the Center for Rural Affairs, noted that the number of hog farms in the US has decreased from over 660,000 in 1980 to fewer than 67,000 in 2010 – a decrease of about 90 percent. He concluded that the USDA and Department of Justice must stand up to the industry and bring a halt to the rush toward concentration and vertical integration in farming, ranching, livestock production and meatpacking to revitalize family farms and ranches across much of rural America.
Valerie Ruddle, a contract poultry grower in West Virginia, spoke about having to hold two off-farm jobs to be able to keep her operation afloat. She ascribed this to the one-sided “contract of adhesion” with the only poultry integrator in her area, and called for the USDA to finalize the GIPSA rule it proposed on June 22, 2010.
During a public testimony session, a representative of the National Chicken Council challenged Ruddle’s statements, arguing that the current system has been in place for years and asking why she decided to begin poultry farming five years ago if the conditions are so inequitable for growers. His comments were quickly met with the testimony of one after another poultry grower, who strongly objected to the treatment of poultry growers by large-scale, vertically integrated poultry companies; one grower asserted that farmers enter the business because the integrators lie about how growers will be treated.
In her concluding remarks, Assistant Attorney General Christine Varney stated that the US DOJ is committed to vigorous enforcement of the antitrust laws and competition advocacy. She said that she frequently talks by phone with farmers and ranchers who are concerned about how concentration in agriculture impacts their lives, and she warned that retaliation against farmers and ranchers will not be tolerated.
After the workshop, Chuck Abbott with Reuters reported that Varney, who heads the DOJ’s Antitrust Division, had also told reporters that the DOJ was investigating a number of leads that came out of the workshops. The Department has announced that it is looking into the purchase of Wisconsin milk plants by Dean’s Foods as well as Monsanto’s plans for marketing biotech soybeans.
Categories: Competition & Anti-trust