Farm bill offers opportunity to challenge corporate control of the food system

By: Anthony Pahnke, vice president of Family Farm Defenders, and Associate Professor of International Relations at San Francisco State University, CA.

Originally published by The Hill, 10/13/22

The Packers and Stockyard (P&S) Act was passed just over a century ago, and needs to be updated as part of the 2022 Farm Bill debate. Anti-Trust = Parity Pricing!

To his credit, Biden has been trying.

That is, the current administration has tried to make agriculture more competitive, from issuing an executive order last year calling on the United States Department of Agriculture (USDA) to clarify and strengthen regulations on the nature of improper market conduct, to investing hundreds of millions in new meat processing ventures.

Following through with the executive order, the USDA — through its authority granted by the Packers and Stockyard Act (P&S Act) — has issued rules, or guidelines, to increase transparency in how poultry growers contract with their buyers. Another proposed rule that is open for public comment until Dec. 2 would increase protections for whistleblowers and reform contract farming in livestock.

Still, consolidation has continued apace.

For instance, Biden’s Department of Justice (DOJ) tried three times to convict poultry executives of price fixing, and three times they have failed. Meanwhile, mergers among poultry processors keep happening. The DOJ allowed one recent case to proceed on the condition that the firms pay $84.8 million for violating worker rights and agree to comply with antitrust laws.

While better than nothing, the agreement between the companies and the DOJ does nothing to stop concentration, where the top four firms went from controlling 35 percent to 54 percent of the industry from 1986 to 2018.

If that were not enough, there’s ongoing vertical integration in beef between retailers and processors, and horizontal mergers taking place among already large players in the sugar industry.

Overall, Biden’s “whole-of government” approach when it comes to strengthening competition in agriculture seems to lack one critical element: enforcement.

More to the point, officials struggle to effectively use the legislative tools at their disposal to stop corporate consolidation. Such tools not only include the P&S Act for poultry and beef, but also other progressive-era legislation such as the Sherman Antitrust, Clayton and Federal Trade Commission Acts.

To the detriment of farmers, few entities in control of an industry can drive down the prices paid to producers for the sake of improving margins. As much has been seen in various lawsuits that have been settled out of court, whether in dairy or beef.

Not only a problem for farmers, consumers and workers also have a lot at stake in this matter.

Specifically, concentrated markets provide opportunities for firms to collude and depress worker wages, as well as inflate prices at the grocery store.

Still, not all hope is lost.

Specifically, the ongoing debates concerning the 2023 Farm Bill present an opportunity to strengthen antitrust policies.

Now, as politicians campaign for reelection, is the perfect time to raise the matter of corporate concentration. In Minnesota, Iowa, and Illinois, for instance, politicians have been hearing over the past week or so from rural communities about the issues of concern.

Typical farm bill items that draw the attention of legislators and the public include subsidies and conservation, as well as nutrition. In fact, the Supplemental Nutrition Assistance Program (SNAP) occupies around 75% of the legislation’s total allocation.

Still, strengthening antitrust laws can also be included.

In fact, in 2008, it was.

Specifically, the 2008 Farm Bill amended the P&S Act by requiring processors to provide more information on capital requirements, while also increasing the power of growers to cancel contracts. The bill called on the USDA to craft guidelines on how to implement these changes. After years of delay, mainly at the behest of meat industry advocates, the Obama administration issued a set of watered-down rules that the Trump administration later nixed altogether.

This time around could be different, especially for the interest that the Biden administration has shown in following through with dealing with corporate power in agriculture.

For instance, the next farm bill could include sections from Sen. Amy Klobuchar’s (D-Minn.) Competition and Antitrust Law Enforcement Reform Act. Among the bill’s many ideas are amending the Clayton Act to update the standards for mergers, while dedicating more resources to the DOJ and Federal Trade Commission (FTC) for enforcement.

Moreover, the farm bill, as a piece of legislation that must pass through both houses of Congress, provides a real opportunity to build legitimacy around the need to challenge corporate consolidation. The DOJ and FTC, with their nominated officials are critical to enforce antitrust law. Passing laws to empower them would strengthen their position.

For these reasons, the farm bill is an opportunity for farmers, workers and consumers to seriously build power and challenge the corporate stranglehold that exists on our food and farm system. Now is a particularly propitious time to forward this change, not only given the upcoming midterm elections, but because the current government appears interested in improving our agricultural system for the better. By including antitrust reform into the 2023 Farm Bill, perhaps they will succeed.

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