Comments for the United States Departments of Agriculture and Justice Workshops on Competition Issues in Agriculture

Abstract

The Department of Justice and the Department of Agriculture have combined to hold a series of workshops related to the competitive issues affecting America's farmers and ranchers. These comments summarize the competitive issues merit attention in this process. On the farm output side they include the use and abuse of the Federal Milk Marketing Order System as well as other agricultural market orders. These orders are being abused in various ways that harm both producers and consumers. Some of these problems stem directly from the way the USDA has failed to police the ways in which the orders have been written while other problems stem from the failure of antitrust enforcement to control concentration at both the processing and retailing stages of the dairy industry as well as policing the exclusionary practices of dominant cooperatives and milk processors. With respect to livestock and poultry, the competitive problems come primarily from the failure of the USDA to use its authority under the Packers and Stockyards Act to facilitate fair, efficient and open competition in the changing contexts of the poultry and livestock industries, but the DOJ has also failed to limit the increase in concentration on the buying side of these markets which has contributed to the problem of anti-competitive conduct and exploitation. In crop markets, the problems that are emerging relate to the increased concentration of the buying markets, again the result of lax merger enforcement as well as the misuse of market orders in some fruits. Finally, on the input side, there are serious problems for competition resulting from the dominance of important new genetically modified seed technologies by a firm that has used its power to impose unjustified burdens on farmers and is now acting to frustrate technological competition. More generally, farmers are victims of higher input prices resulting from increased concentration in all of the markets providing their inputs.

Keywords: regulation and business law

JEL Classification: K2