Farmers Union among groups supporting moratorium on agriculture and food mergers
A bill supported by more than 200 farm, food, rural, and consumer advocacy organizations would put an immediate moratorium on large acquisitions and mergers in the food and agriculture sector if passed. The moratorium would be in place until Congress passes comprehensive legislation addressing the problem of market concentration in the agricultural sector.
The bill was introduced on May 22 by U.S. Representative Mark Pocan (WI-02). The companion bill was introduced in the Senate by U.S. Senators Cory Booker (D-NJ) and Jon Tester (D-MT).
The Food and Agribusiness Merger Moratorium and Antitrust Review Act was originally introduced by Pocan last September and called for an 18-month moratorium on large mergers and acquisitions. This year’s updated version calls for an indefinite halt.
In addition to the indefinite moratorium, the bill would set up a commission to study how to strengthen antitrust oversight of the farm and food sectors and publish recommended improvements to merger enforcement and antitrust rules, according to a press release.
“Out-of-control consolidation has enabled big agricultural firms to control prices at every stage of the food chain, from farming to distribution, and Congress must do more to allow local farmers and food systems to be competitive, while establishing greater market transparency for the American consumer,” said Pocan in a press release. “Today, corporate profits are soaring, but many middle-class families, farmers, and food workers continue to struggle. Establishing a moratorium on ag-mergers will not only strengthen our antitrust laws, but it will also expand economic security and opportunity to more of our communities.”
Booker said the ag and food sectors "have reached alarming levels of corporate concentration."
"Today a small number of giant companies control every link of our food chain," Booker said in a press release. "For instance, four companies control as much as 90 percent of the global grain market, and the top four beef packers in the United States now control 85 percent of the beef market. These excessive levels of concentration and market power are devastating our independent family farmers and ranchers and hollowing out the rural communities in which they live."
"Farmers and ranchers are being forced to sell into ever more concentrated marketplaces that unfairly reduce the prices they receive for their crops and livestock, and unfairly increase the cost of inputs," Booker continued. "In 1950, a farmer would get 41 cents from every retail dollar for the products he sold; today that portion has plummeted to 15 cents. This must change. It’s time to restore competition to the marketplace, so that our farmers and ranchers can once again have the opportunity to share in the prosperity they help create.”
Applauding the legislation, the Organization for Competitive Markets joined the more than 200 organizations calling on Congress to hit the pause button on agriculture, food and retail concentration.
A letter the groups delivered to Congress outlined the impacts of a merger and acquisition spree that has swept through food and agriculture in the last decade, with mergers between major seed, fertilizer, food processing and grocery retail giants. This wave of consolidation has contributed to falling farm prices, declining farm incomes, stagnant wages for food workers, rising food prices and economic stagnation in rural communities.
"Food and agribusiness consolidation erodes rural economic vitality: Fewer, larger food and agribusiness companies have sapped economic activity in rural areas, contributing to the declining number of independent farmers and main street businesses," the letter stated. "These farms and small businesses are the economic engine of rural America. The loss of this local economic activity ripples across communities, eroding the stability and sustainability of religious congregations, schools, hospitals and other community organizations."
Wisconsin Farmers Union (WFU) and National Farmers Union (NFU) are also among the 200 groups supporting the legislation.
"We’re losing family farms at an alarming rate. It’s time to hit pause on mega-mergers and stop the growing trend of vertical integration in U.S. agriculture,” said Westby dairy farmer and WFU President Darin Von Ruden in a press release. “Family farmers need a level playing field, and all U.S. consumers deserve a fair, safe and secure food system.”
In just the past two years, chemical and seed company acquisitions and mergers have allowed three companies to control two thirds of the crop seed and nearly 70 percent of the agricultural chemical markets. Those mergers hurt farmers who are facing fewer options and increasing input costs amid declining farm incomes, according to the WFU.
While the largest multinational agribusiness corporations are posting record earnings, farmers are facing desperate times. Since 2013, net farm income for U.S. farmers has fallen by more than half and median on-farm income is expected to be negative in 2018. Wisconsin has been hit particularly hard, leading the nation in Chapter 12 bankruptcy filings in 2018.
Over the last three decades, the growth of market concentration has spun out of control. During this period, the four largest multinational corporations have gained control of 71 percent of the pork market, 85 percent of the beef market and 90 percent of the grain market, WFU reported.
“Over the past several decades, lax antitrust enforcement has greatly reduced competition in the industries that supply and buy from family farmers and ranchers, saddling them with higher input costs, fewer choices, and less innovation,” said NFU President Roger Johnson.
"Consolidation is one of the greatest threat to rural America," Tester said. "Less competition means higher prices and fewer choices for small family farmers as they struggle to make ends meet. This bill will help put family farmers back in control of their futures by improving access to a competitive marketplace. Rural America cannot afford to see multi-national corporations put family farms out of business."