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Feds shine spotlight on ag competition issues

In Ankeny, Iowa Friday, the Department of Justice (DOJ) and U.S. Department of Agriculture (USDA) held the first-ever joint public workshop on competition and regulatory issues in the agriculture industry. 

The workshop, led by U.S. Agriculture Secretary Tom Vilsack and U.S. Attorney General Eric Holder, featured panel discussions on a variety of topics, including competitive dynamics in the seed industry, trends in contracting, transparency and buyer power, and concluded with public testimony. 

“Today’s workshop provided the Department with an important opportunity to hear from a variety of perspectives and individuals about competition in the agriculture sector,” said Attorney General Eric Holder.  “We appreciate the importance of this industry to our economy and are committed to enforcing the antitrust laws effectively to ensure fair and open competition that protects both consumers and farmers.”

“In my travels across the country, I hear a consistent theme: producers are worried whether there is a future for them or their children in agriculture, and a viable market is an important factor in what that future looks like,” said Vilsack. “These issues are difficult and complex, which is why this workshop today is so important and long overdue.”

Friday’s meeting was the first in a series of workshops that will be held over the next several months. 

Holder, Varney serve notice to large agribusiness companies

The nation’s largest agribusiness firms received a stern warning from the Obama administration during Friday’s ag competition workshop in Ankeny, Iowa:  There’s a new sheriff in town and anti-competitive practices won’t be tolerated.

Attorney general Eric Holder set the tone for the session. “We know that a growing number of American farmers find it increasingly difficult to survive by doing what they have been doing for decades,” Holder said, “and we’ve learned that some them believe that the competitive environment may be, at least in part, to blame.”

Both Holder and Christine Varney, the assistant attorney general for antitrust, said that while big isn’t necessarily bad, it can be bad if the power that comes with being big is misused.  “With big comes an awful lot of responsibility,” said Varney.  “When you have a tremendous amount of market share, you have the responsibility to behave in ways that keep the competitive playing field open.  You cannot engage in acts that are designed to protect or extend your monopoly.”

Varney said her office will vigorously enforce antitrust law.  When pressed on what actions might be forthcoming, and when, Varney responded that it’s already happening.  She pointed to last year’s blockage of JBS SA’s attempt to purchase National Beef and a recent Justice Department lawsuit seeking to block milk processor Dean Foods’ acquisition of a competitor.   Her message was that future acquisitions and mergers will be getting much more scrutiny than they have in the past.

The following audio clips feature some of the opening comments made at the workshop.

AUDIO: Secretary of Agriculture Tom Vilsack (2 min MP3)

AUDIO: Attorney General Eric Holder (3 min MP3)

AUDIO: Christine Varney, head of DOJ Antitrust Division (3 min MP3)

AUDIO: Iowa Senator Chuck Grassley (3 min MP3)

 

Farmers have their say

The workshop agenda included a panel of six farmers conveying their thoughts on competition issues in agriculture.  Eric Nelson, a grain and cattle farmer from Moville, Iowa argued that the government needs to do a better job of enforcing the anti-competition and antitrust laws already in place.   Pam Johnson, a farmer from Floyd, Iowa, talked about the innovations that have made American agriculture the envy of the world.

AUDIO: Eric Nelson (7 min MP3)

AUDIO: Pam Johnson (6 min MP3)

 

Competitive Dynamics of the Seed Industry

Much of the focus of Friday’s workshop was the competitive dynamics of the seed industry–specifically Monsanto’s dominance in seed traits and whether the company is using that dominance unfairly.  At the heart of the discussion is the battle between rivals Monsanto and Dupont, which owns Pioneer Hi-Bred. 

One of the more interesting exchanges took place between Diana Moss with the American Antitrust Institute and Jim Tobin of Monsanto, both part of a panel discussing seed price, choice and innovation.   Dermot Hayes, Iowa State University professor of economics and finance, also weighed in.

AUDIO: Diana Moss (2 min MP3)

AUDIO: Jim Tobin (2 min MP3)

AUDIO: Dermot Hayes (2 min MP3)

 

Reaction from agribusiness and ag organizations

How do some of the nation’s largest agribusiness and ag organization’s view the tough talk from the Department of Justice in regards to competition in the ag industry?  Brownfield put that question to Sam Carney, president of the National Pork Producers Council; Jay Vroom, president of CropLife America, the trade association representing the nation’s chemical companies; and, Colin Woodall, vice-president of government affairs for the National Cattlemen’s Beef Association.

AUDIO: Sam Carney (4 min MP3)

AUDIO: Jay Vroom (3 min MP3)

AUDIO: Colin Woodall (2 min MP3)

  • Pam ain’t just some farmer:

    PAM JOHNSON, President
    In addition to serving on the ICO board of managers, Pam also is an executive director and former chair of the Iowa Corn Promotion Board (ICPB). She currently serves on the ICPB’s Research Committee, and the Industrial Usage and U.S. Production Committee. She also chairs the National Corn Growers Association’s Research and Business Development Action Team, and is a member of the U.S. Grains Council’s Trade Policy Team.

    Pam farms in Floyd County, Iowa, where she raises corn and soybeans, along with a farrow-to-finish pork operation. Pam has been farming for more than 30 years, in partnership with her husband, Maurice. Their two sons are both involved in the family’s farm business.

    The Johnsons have diversified their operation by joining with other farmers in value-added co-ops producing ethanol and soy biodiesel. Iowa’s farming community recognized Pam with the 2006 Woman in Ag Award.

    Before farming full-time, Pam worked as a registered nurse. She received her education at Northwestern Hospital School of Nursing in Minneapolis. Pam is active in her community and is pianist for her church.

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