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Federal regulators launch probe of Big Ag

By Staff | Mar 12, 2010

ST. LOUIS – Some Obama administration officials have made clear their unease with the increasing control a handful of corporations have over the nation’s food supply, and today, in Iowa, they could show whether they are serious about changing the system.

The first joint workshops on agriculture by regulators at the U.S. Justice and Agriculture Departments is expected to give farmers, lobbyists, executives and academics a strong indication of where the Obama administration stands on consolidation in agriculture.

Administration officials said today’s meeting in Ankeny will give antitrust attorneys and farm regulators their first chance to work side-by-side and examine the concentration of power in rural America.

The Iowa meeting will be followed by four other gatherings held later in the year.

Industry officials and farming groups aren’t sure whether the hearings are political theater or a first step toward legal action, or both.

For farmers, it’s the most attention paid in years to their long-standing complaints that big corporations are choking out smaller players.

”This is certainly a much brighter spotlight than we’ve seen in the last 10 years,” said Tara Smith, the American Farm Bureau’s director of congressional relations.

Christine Varney, head of the Justice Department’s antitrust division, came into office last spring complaining that regulators have been too slow to file cases.

”We’ve seen a lot of consolidation in the industry in the past decade,” she said. ”Any time you have a lot of concentration in any part of the market, or any part of a vertical chain, it merits looking at.”

Varney and U.S. Secretary of Agriculture Tom Vilsack said the workshops are aimed at creating broad policies to foster competition in agriculture, rather than scattered enforcement actions. Both will attend the hearings, and they emphasized that no action would be taken if competition was deemed fair. The point is to listen and learn.

The series of workshops will run through December, looking at the seed, dairy, poultry, beef and crop industries. At issue will be the practices of industrial agriculture’s biggest players, such as grain processors Archer Daniels Midland Co. and Cargill Inc., meat companies Tyson Foods Inc. and JBS SA and biotech seed firms Monsanto Co. and DuPont.

The American Meat Institute, which represents meat processors, filed testimony for the hearings, arguing that the companies have gotten so big in large part because of government regulation.

Stringent food safety rules and constant inspections forced the industry to build expensive, high-tech plants, the group said. And the firms have paid the cost for massive recalls of tainted meat, forcing large companies to merge to share the risk and smaller ones to leave the market, the testimony said.

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