Merger Moratoriums

Date: 20 Nov 2008 | posted in: agriculture | 0 Facebooktwitterredditmail

Agribusiness mergers squeeze the food industry into an hourglass- with many producers and consumers but increasingly fewer processors and distributors. Food chain clusters of Monsanto/Cargill, ConAgra, and Novartis/ADM are vertically integrating to control production from “farm gate to dinner plate”. As agribusiness concentrates, their power to buy low from farmers and sell high to consumers increases. For example, four meatpacking companies–ConAgra, IBP, Cargill and Farmland National–currently control 87 percent of the nation’s cattle slaughter, up from only 36 percent in 1980, along with 54 percent of the hog slaughter and 70 percent of the sheep slaughter. As industry consolidation increases, the prices ranchers receive for livestock are down to their lowest levels since the Depression. At the same time packers saw their share of what the final consumer pays rise 20 percent in 1998. As concentration continues to accelerate, calls for increased antitrust enforcement and merger moratoriums have sounded.

In October 1999, Senator Paul Wellstone (D-MN) introduced the Agribusiness Merger Moratorium and Antitrust Review Act of 1999, cosponsored by Senators Byron Dorgan (D-ND), Tom Daschle (D-SD), Tom Harkin (D-IA), Russ Feingold (D-WI) and Tim Johnson (D-SD). The bill imposes an 18-month moratorium on agribusiness mergers and expansion, or until Congress passes a new bill to address the problem of agricultural consolidation. The law would affect businesses with annual net revenues or assets of more than $100 million. The Act also establishes a 12-member review commission to study the effects of agricultural consolidation and to make recommendations for reform of the antitrust laws to promote more competition. The bill was defeated in November of 1999 but remains a model legislative proposal.

More:

Full Text of Agribusiness Merger Moratorium and Antitrust Review Act of 1999

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Lisa Gonzalez researches and reports on telecommunications and municipal networks' impact on life at the local level. Lisa also writes for MuniNetworks.org and produces ILSR's Broadband Bits podcast.