Holder calls for Historic Era of Antitrust Enforcement, Rural America Hopeful Once Again

March 16, 2010

ANKENY, IA — There are moments in a nation’s history that define it. For America’s remaining 2 million farmers (less than 1% of the population) and the more than 300 million eaters, the recent joint Department of Justice and Department of Agriculture workshop on lack of competition in the food and agricultural sectors held in Ankeny, Iowa is potentially one of those moments.

With concentration at record levels in agriculture today, well past levels that encourage or even allow fair prices or competition, the Obama administration’s call for public workshops is an historic event. While agribusiness continues to deny any problem, a simple look at the facts shows that the playing field for family farmers and American consumers is distorted beyond anything resembling a free or competitive market.

Even though these statistics have been widely published lately, I will include them here again just to illustrate the point: 1 company (Monsanto) controls the genetics of 93% of soybeans and 80% of the corn grown in the U.S; 4 companies (Tyson, Cargill, Swift & National Beef Packing Co.) control 85% of the beef packing industry; 4 companies (Smithfield, Tyson, Swift & Cargill) control 66% of the pork packing industry.

For farmers trying to get a fair price for seeds or livestock, such concentration places a crushing burden on their bottom line.

This past Friday nearly 800 individuals from across the country gathered in a small community college auditorium to hear top officials in the Obama administration, including cabinet members Secretary of Agriculture Tom Vilsack (former governor of Iowa) and Attorney General Eric Holder, address the issue of how such excessive market concentration and food monopolies have negatively impacted the lives and livelihoods of family farmers, consumers and rural America. Over the course of eight hours, the audience, made up mostly of farmers, labor workers and farm advocates, some of whom traveled from as far as Montana, Texas, Arkansas and North Carolina, listened as academics, economists, agribusiness representatives, commodity groups and a few farmers detailed specific areas of concern regarding the lack of competition in agricultural markets or, in the case of a several industry reps, denied outright the existence of any problem.

The gravity of this meeting and its outcome could be felt by all attendees as Vilsack, Holder, DOJ antitrust chief Christine Varney, Iowa Senator Chuck Grassley and others took the stage for the first panel. A sense of anticipation and restlessness filled the crowd as the panel was announced, which included Iowa’s attorney general, Tom Miller, Congressman Leonard Boswell, Lt. Governor Patty Judge and Secretary of Agriculture Bill Northey. The inclusion of the last three panelists, while expected, caused some dismay by longtime Iowa farm activists. Having two Democrats (Boswell and Judge) and a Republican (Northey) at the podium with a long history of supporting industrial agriculture was not what many had hoped for when the workshops were first announced.

Workshop #1 Begins: Vilsack, Holder and Varney

After a round of pleasantries, saying he was glad to be back in Iowa, Secretary Vilsack opened the hearing sharing his concern about the loss of family farmers over his lifetime and the shrinking of rural communities, which he has seen as a small town lawyer, mayor, state senator, governor in Iowa and now as Secretary of Agriculture.

“Looking at the statistics regarding rural America and farms, I have a lot of concern,” said Secretary Vilsack.

He then went on to detail how the rising age of the average farmer, now 57 as reported in the 2007 Ag census, the higher and more prolonged rates of unemployment in rural America and the loss of economic opportunity in rural areas across the country were all issues that he planned to address by improving programs at the USDA.

No matter what one believes about Vilsack’s agricultural biases, favoring biotech, ethanol and exports while still increasing opportunities for beginning farmers, organics and nutrition programs like farm to school, it was evident that he realizes that agriculture and rural America are at a serious crossroads under his watch.

“This is not just about farmers and ranchers,” Vilsack said. “It’s really about the survival of rural America.”

In a USDA press release issued later that day, Vilsack drove that point home even further.

“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.”

Attorney General Holder called the public workshop “a milestone” event.

Many in the audience, especially family farmers concerned that the workshop would be another dog and pony show that promises change, but only returns agribusiness as usual, were encouraged by Holder’s attendance, which was only announced late last week.

For leading industrial ag companies, Holder’s appearance in Ankeny was a sign of how serious the Obama administration is taking the issue.

During his opening statement, Holder said that the DOJ was committed to vigorous protection of competition, noting how “reckless deregulation has restricted competition in agriculture.”

Holder went on to say, “We all know that one of the greatest threats to our economy is the erosion of free competition in our markets. And we’ve learned the hard way that recessions and long periods of reckless deregulation can foster practices that are anti-competitive and even illegal.”

These were stern warnings for the agribusiness’s minions in the audience.

Closing out the first panel was DOJ antitrust chief, Christine Varney, who was widely recognized as the driving force behind the antitrust hearings. Speaking about the realities of U.S. antitrust law and real enforcement expectations, Varney promised a tough stance from her office and a clear signal that a new sheriff is in town.

“Big companies aren’t necessarily bad,” Varney said. “But they have a responsibility to act responsibly. Patents have in the past been used to maintain or extend monopolies — and that’s illegal.”

For those family farmers and proponents of sustainable agriculture who have long seen Monsanto as the 800-pound agribusiness bully in the room, Varney’s comments were applauded.

Farmers Unite: Call on Obama to “Bust up Big Ag”

Even so, while issues of lack of competition and enforcement of antitrust laws have been on the agenda for family farmers and rural advocates for decades, the rest of the day’s lineup did not live up to what many had hoped for. When originally announced, the first workshop had been proposed to focus on seed concentration, only to get watered down to include hogs, livestock, transparency and buyer power.

For weeks leading up to the workshop, farm groups and rural advocates had been quietly pushing the USDA to find more inclusive voices and more progressive farmers, those who had been most negatively impacted by excessive ag concentration, to be included on the panels.

The resistance that DOJ and USDA officials met from family farm groups led to a delay by several days of the official farmer panel lineup being released publicly and led Sectary Vilsack to allow more farmer comment during the lunch break.

As a result of the delay, leading farm, labor and consumer groups held a townhall meeting the evening before to make sure that real farmer voices were heard on these important issues.

On the eve of what may have been the most historic day in agriculture in the 21^st century, more than 250 farmers, their friends and families, union workers and farm advocates gathered in a hotel in Ankeny, just down the road from the official DOJ/USDA event to bring attention to their plight and call for the administration to “Bust up Big Ag.”

During the open forum period, when more than 40 individuals from the audience had one minute to address the crowd, the sense of urgency for farmers and rural Americans was palpable.

Jerry Harvey, a 4^th generation southern Iowa dairy farmer described the recent plight of America’s dairy farmers, who have experienced a record crisis this past year as prices have dropped more than 50% at times from 2008 levels, stranding farmers with thousands of dollars of debt to carry each month for more than a year.

“What turned out to be the American dream, turned out to be the American nightmare for the past 15 months,” Harvey said, detailing his interactions with Iowa’s political leaders, including Senator Harkin and Grassley and Congressman Boswell’s offices to find some solution to the current dairy crisis.

After Harvey, fellow Iowa dairyman, Scott Cruise addressed the crowd, telling them that he was afraid that he wouldn’t be able to pass on his farm to his 15 year old son, who desperately wanted to become the 5^th generation to farm and milk cows in Iowa.

Unfortunately for the audience, the story was all too familiar.

For many dairy farmers, like the chicken farmers and hog farmers before them, who have all been forced out of production because of the false efficiencies of excessive concentration, the Obama administration’s announcement of an antitrust lawsuit against Dean Foods, which controls more than 40% of the fluid milk market in the U.S., it may be too late.

Even as farmers in the audience the next day clapped when Varney mentioned the DOJ’s antitrust lawsuit against Dean Foods, many realized the debt levels these family dairy farmers have been forced to endure the past year has reached a crisis point.

While many have waited a lifetime to hear government officials address lack of competition in agriculture and enforce antitrust laws, the only question that remains is: how fast will the wheels of justice turn?

David Murphy is the founder and director of Food Democracy Now!, a sixth generation Iowan, and a writer and advocate for sustainable agriculture. Read more >