US attorney general, agriculture secretary begin hearings on competition in farming system

US regulators examine competition in agriculture

ANKENY, Iowa — Federal officials concerned about how much control a few corporations have over the nation’s food supply pledged Friday to begin a new era of antitrust enforcement, seeking to balance agricultural power between companies, farmers and consumers.

More than 650 farmers, slaughterhouse workers, lobbyists and executives gathered for a hearing on competition in agriculture that will help shape how the Obama administration redraws its antitrust policy after decades of industry consolidation.

Attorney General Eric Holder and Agriculture Secretary Tom Vilsack, sitting side by side to open the hearing, called the workshop an unprecedented act of cooperation between their agencies.

“I think you will see an historic era of enforcement that will almost inevitably grow from the partnership that we have established,” Holder said.

Some Obama administration officials have made clear their unease with increasing agribusiness consolidation, with just a handful of firms controlling the lion’s share of beef production, biotech seeds and poultry growing. Those in the audience at the hearing paid keen attention, trying to discern just how aggressive the Obama administration will be.

For farmers, it is a long-overdue effort to constrain corporations like Monsanto Co., Archer Daniels Midland Co. and Tyson Foods Inc., which producers say wield unprecedented power over food production. Industry groups worry new laws or big antitrust lawsuits could punish companies in the midst of a recession and stifle innovation and investment.

Holder and Vilsack said it’s not clear what actions ultimately will result from the five hearings, which will examine competition in the dairy, seed, meatpacking and crop production.

But they said it won’t just be a series of lawsuits. They’re looking at developing broad policies that would ensure big companies don’t have too much sway over prices they pay farmers or charge consumers.

“This is not just about farmers and ranchers,” Vilsack said. “It’s really about the survival of rural America. We’ve seen a significant decline in the number of farmers and ranchers and that translates into a significant decline in the number of people living in rural America.”

The hearings play to a long-brewing sense of powerlessness and frustration in small towns that was on display Thursday night at a farmer’s rally near the site of Friday’s hearing. More than 200 people packed a small ballroom and chanted: “Bust up big ag” as speakers took to the podium and told stories.

“If we can’t get justice from the Department of Justice, where are we going to get it?” asked Garry Klicker, a farmer from Bloomfield, Iowa, drawing cheers and applause from the crowd. “We need to get these (companies) off our backs.”

Friday’s discussions took a more measured tone, as Sen. Chuck Grassley, R-Iowa and Iowa Attorney General Tom Miller and others outlined concerns about consolidation in the farm sector.

“Bigger isn’t per se bad,” Grassley said. “But it can lead to predatory business practices and behaviors and that’s what we’ve got to be concerned about.”

Friday’s hearings focused on the seed industry, where Monsanto and DuPont control the market for genetically engineered traits inserted into the vast majority of U.S. crops. Farmers have complained the lack of competition among biotech seed makers has led to a jump in seed prices, even as crop prices stagnate.

Jim Tobin, Monsanto’s vice president of industry affairs, said the company’s patented Roundup Ready gene has become the industry standard for the simple reason that farmers want it. Farmers could grow conventional soybeans, or choose from competing engineered traits offered by Monsanto’s rivals, he said.

“There’s a lot of choice today, and there’s going to be a lot more choice in the future,” Tobin said.

Still, critics said regulators should keep a close eye on Monsanto, possibly developing a new oversight authority to ensure farmers and seed companies have open access to the Roundup Ready gene when its patent expires in 2015.

Christine Varney, the Justice Department’s top antitrust official, said regulators would watch closely.

“Patents have in the past been used to maintain or extend monopolies — and that’s illegal,” Varney said.