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Feds target growing monopolies in big agriculture and food processing

Today, the U.S. Department of Agriculture and the Department of Justice held the last in a series of five joint public workshops to explore the appropriate role for antitrust and regulatory enforcement in American agriculture.  

The workshop, led by Agriculture Secretary Tom Vilsack and U.S. Attorney General Eric Holder, focused on the margins at various levels of the agricultural supply chain. Featured were four panels composed of producers, academics and other industry stakeholders.

The workshop was held in Washington D.C. at the U.S. Department of Agriculture and opened with statements from Secretary Vilsack and Attorney General Holder, then a discussion with participants representing each level of the agricultural supply chain, followed by a panel consisting of dairy farmers and academics and discussing dairy margins.  In the afternoon a third panel looked at issues in the retail sector, examining concentration, margins and similar trends. The final panel discussed margins in the livestock and poultry industries.

"Today's open and transparent dialogue with farmers, ranchers, industry and academics is resulting in a clearer understanding of the complex competitive issues facing American agriculture," said Secretary Vilsack.  "A fair and competitive marketplace is important not only for producers, but also for consumers."

Throughout the year workshops have bee held around the country to explore the appropriate role for antitrust or regulatory enforcement in the agricultural industry.  In March, a workshop was held in Ankeny, Iowa to discuss seed concentration and hog market issues.  In May, poultry issues were examined in Normal, Alabama.  Dairy issues were discussed in Madison, Wisconsin in June.  And in August, competition in livestock markets was explored in Fort Collins, Colorado.

"In these workshops, and in my travels across the country, a number of themes have emerged:  Producers want to have or maintain marketing options, they want transparency, they want access to markets, they have fewer buyers with whom to do business with, they struggle with debt and face challenges accessing capital, and last, they just want to be treated fairly and be respected," commented Secretary Vilsack.  "But most importantly, they all care about the future of agriculture and want it to succeed, which is why we have seen such overwhelming response and attendance at these workshops."

Vilsack continued, "America's mid-sized farms are not always profitable enough to sustain a family."

"The farmers' and ranchers' share of the food dollar has continued to shrink, decade after decade.  If current trend lines continue, in another 20 years the farm and ranch share of the consumer dollar would reach zero," said John Crabtree of the Center for Rural Affairs, who attended the workshop in Washington, D.C.

According to Crabtree, in 1980 there were over 1.3 million ranches and farms with cattle across the country.   Today, fewer than 950,000 are still in operation.  In 1980 there were over 666,000 hog farms but according to the last USDA Hogs and Pigs Report [USDA NASS Quarterly Hogs and Pigs Report - September 2010] that number has declined by approximately 90% to fewer than 67,000.  The Center for Rural Affairs has, for nearly 15 years, pointed out that these ever-increasing gaps between retail food prices and farm- and ranch-gate prices is due in the largest part to unchecked concentration and vertical integration of the production of crops, livestock, dairy and virtually all other agricultural products.

"Standing up to industry and stopping the headlong rush toward concentration and vertical integration in farming, ranching, livestock production and meatpacking is a long row to hoe, but crucial to revitalizing family farms and ranches across much of rural America.  If Attorney General Holder and Secretary Vilsack continue to take up that challenge, family farmers, ranchers and rural communities will stand with them," Crabtree concluded.

According to Crabtree, USDA's GIPSA rule has been under attack from meatpackers and other industry groups such as the National Pork Council, but the Center for Rural Affairs has and will continue to urge USDA to hold their ground and end the volume-based, "sweetheart" deals that packers routinely give to the nation's largest corporate hog and cattle producers.  "USDA has written a strong rule that will improve enforcement of the Packers and Stockyards Act and challenge the price discrimination against family farmers and ranchers that has driven tens of thousands of them out of the livestock business," Crabtree concluded.

A copy of the Center for Rural Affairs comments on the GIPSA rule and other related materials can be downloaded at .

The Center for Rural Affairs was established in 1973 as an unaffiliated nonprofit corporation under IRS code 501(c)3. The Center for Rural Affairs was formed by rural Nebraskans concerned about family farms and rural communities, and we work to strengthen small businesses, family farms and ranches, and rural communities.