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Farm, Nutrition, and Bioenergy Act of 2007 -- Continued

Floor Speech

By:
Date:
Location: Washington, DC


FARM, NUTRITION, AND BIOENERGY ACT OF 2007--Continued -- (Senate - December 13, 2007)

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Mr. KOHL. Mr. President, I rise today with Senator Grassley in support of amendment No. 3823. Our amendment will significantly enhance the antitrust review given to mergers and acquisitions in the agricultural sector.

Concentration and consolidation in agriculture is a major concern for our hard working farmers. Due to the wave of mergers and acquisitions that have occurred throughout the agricultural sector in recent years, fewer and fewer food processors have captured a greater and greater share of the market for purchasing agricultural goods. Farmers have less choice of where to sell their products, and as a result the prices they receive continue to decline.

Our Nation's farmers--who comprise less than 2 percent of the population--produce the most abundant, wholesome, and by far the cheapest supply of food on the face of the Earth. However, the way in which that food is produced is rapidly changing, creating significant new challenges. We have witnessed a massive reorganization in our food chain due to the increasing numbers of mergers in the dairy, livestock, grain, rail, and biotechnology industries. In fact, the top four beef packers control 71 percent of the market, the top four pork processors control 63 percent of the market and the top four poultry processors control 50 percent of the market. During this period of enormous transformation in the agricultural industry, disparity in market power between family farmers and the large conglomerates all too often leaves the individual farmer with little choice regarding who will buy their products and under what terms.

The effects of this increasing consolidation are felt throughout the agricultural sector. Rather than buying on the open market, processors of farm commodities are relying more and more on contractual arrangements with farmers which bind farmers to sell a specified amount of product, for prices specified by the processors. In many cases, there is no longer a significant open market to which farmers and ranchers can turn. These contractual arrangements damage the independence of family farmers, leaving them little choice regarding what to grow and the terms on which to sell their products.

Agricultural consolidation has also been pronounced in the dairy sector. Mergers among milk processors have greatly concentrated the industry, and resulted in lower prices for dairy farmers. There have been serious allegations of anticompetitive conduct by one large dairy processor in Florida and elsewhere resulting from this highly concentrated market.

Unfortunately, in recent years our antitrust regulators at the Department of Justice have done little to stem the tide of ever increasing agricultural consolidation. This is why we are today offering this amendment to the farm bill.

Our amendment will significantly enhance the scrutiny given to agricultural mergers under the antitrust laws. It will establish an Agricultural Competition Task Force--made up of representatives of antitrust enforcement officials, State and Federal agriculture regulatory officials, State attorneys generals, industry experts, and representatives of small family farmers and ranchers--charged to investigate problems of competition in agriculture and make recommendations to Congress and enforcement agencies on ways to enhance competition.

Our amendment will also direct the Justice Department and Federal Trade Commission to develop, within 2 years, new guidelines for antitrust enforcement in the agricultural sector. These guidelines are to be written to prevent anticompetitive mergers in the agricultural industry. These guidelines will require the antitrust enforcement agencies to challenge any merger or acquisition in the agricultural sector, if the effect of that merger or acquisition may be to substantially lessen competition or to tend to create a monopoly. The development of such strong guidelines should deter anticompetitive mergers from even being attempted in the first place.

Our amendment will also provide a procedure for comments by the Secretary of Agriculture regarding proposed mergers and acquisitions in the agricultural sector. These comments should provide important expertise and enhance the merger review process of the antitrust agencies when reviewing agricultural mergers.

In sum, our amendment is a significant measure to combat the ever rising tide of consolidation in agriculture which threatens to swamp our Nation's hard working family farmers. I urge my colleagues to support amendment No. 3823.

Thank you, Mr. President. I yield the floor.

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