Holder and Secretary of Agriculture Tom Vilsack held five highly-publicized workshops on competition in agriculture in 2010, giving long-time critics of consolidation of agribusiness companies, especially meat processing, their most optimism in years. But two years later, Brother David Andrews of Food and Water Watch wrote, “The Obama Administration lifted up hopes and dashed them to the dustbin of history.” Andrews, a long-time critic, called the lack of follow-up action “a terrible and historic defeat at the hands of the corporate meat industry.”
Significantly, Vilsack’s off-the-cuff remark to reporters last week on Holder’s record omitted any mention of their joint focus on agribusiness concentration four years earlier. Instead, Vilsack said that Holder “certainly has been valuable to us in . . . resolving historic civil rights cases.”A July 2012 report by Holder’s
Antitrust Division concluded that “a wealth of discussion and information on
the state of competition in the agricultural sector” had given the Justice
Department “an enhanced understanding of agricultural markets” and a commitment
to “taking all appropriate investigatory and enforcement action against conduct
threatening harm to competition in agricultural markets.”
Agri-Pulse described
the report at the time as “a major letdown to critics of concentration of
economic power in the seed business, livestock slaughter, poultry production
and food retailing who once entertained hope that the Obama Administration
would move more forcefully to prevent further concentration and enhance the
market power of ‘independent’ producers who shy away from growing on contract.”
DOJ was able to cite two antitrust cases it brought following
the workshops, challenging Dean Foods’ acquisition of a mid-size milk bottling
plant in Milwaukee and a suit to block the sale of a Tyson Foods chicken plant
in Virginia to one of its competitors. In both cases, government lawyers accepted
partial settlements in 2011 that fell short of their original goals.
Subsequently, DOJ allowed Tyson Foods to acquire Hillshire Brands and cleared
the merger of Cargill, ConAgra and
Holder’s Antitrust Division also allowed Brazilian-owned JBS USA to acquire bankrupt poultry producer Pilgrim’s Pride in 2009 and to take over beef packing plants in Idaho and Nebraska. In each the Ranchers-Cattlemen Action Legal Fund-United Stockgrowers of America and several allied groups petitioned DOJ to block the acquisitions, to no avail. The same groups also opposed another major meat industry acquisition that occurred on his watch but largely beyond the reach of U.S. antitrust law – the purchase of Smithfield Foods by a Chinese conglomerate.
Perhaps as disappointing to the critics was DOJ’s decision not to challenge Monsanto’s biotech seed business. Monsanto disclosed in November 2012 that the department had ended a formal investigation of its soybean traits business and the competitive behavior of the seed industry without charges. The Antitrust Division asked Monsanto three years earlier for information about marketing practices for its Roundup Ready® soybeans. Although DOJ made no public statement, the company said that it received written notification from DOJ that the inquiry was closed.
The DOJ report itself may have suggested why little action
followed the widespread complaints lodged by critics and aggrieved producers at
the five 2010 workshops. “Participants identified an array of challenges facing
the agriculture sector, many, if not most, of which fall outside the purview of
the antitrust laws,” the report said, and “do not serve directly other policy
goals like fairness, safety, promotion of foreign trade and environmental
welfare. Many of the workshop issues may require public or private solutions
beyond the antitrust laws.” It added that “today’s antitrust laws do not permit
courts or enforcers to engineer an optimal market structure, breaking up firms
simply because one might prefer there be more of them (or for other similar
reasons).”
Holder, who attended four of the five workshops, said that while “vigorous and appropriate enforcement” of antitrust laws is essential to ensuring a fair marketplace for agricultural producers, antitrust enforcement actions will not solve every problem. The limitations on more vigorous antitrust enforcement were explained in August 2009 by Bert Foer, president of the American Antitrust Institute, in a talk to the Organization for Competitive Markets
The high levels of concentration are facts on the ground.
The antagonism toward antitrust on the part of the federal courts, especially
the U.S. Supreme Court, will likely remain a substantial limiting factor on
government initiatives during the next four years. Special interests in the
food sector are particularly powerful. If progress is to be made on generating
more competition in the food sector, there will have to be changes in antitrust
thinking and enforcement more generally.”
#30
For more news go to: www.Agri-Pulse.com
