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Farmer and president of the National Black Farmers Association, John Boyd, Jr. speaks at Open Markets’ and Farm Action’s “Making the Grade” event, Tuesday June 14th.

Farmers, Ranchers, and Business Owners Urge Antitrust Action at Agency Midterm Review

By Amy Huo, Open Markets Agriculture Policy Intern, and Claire Kelloway

At a conference held last week entitled “Making the Grade,” the Open Markets Institute and Farm Action issued a report card [[link removed]] assessing how effectively the Department of Justice, U.S. Department of Agriculture, and the Federal Trade Commission have complied with the executive order [[link removed]] that President Biden gave them last July to find ways of promoting fair competition in the agricultural production system. None of the agencies are doing a stellar job. The DOJ and FTC received a B- while USDA received a D+.

USDA’s grade, as noted by Open Market’s Food Program Manager Claire Kelloway, is due to a “serious lack of decisive action and policy to support their language and investments.” While the USDA has committed significant funds to new food processing infrastructure and promised to issue Packers and Stockyards Act rules, their sluggishness puts at risk what Farm Action’s Angela Huffman describes as a “once in decades opportunity to take action against the corporate power that's driving farmers and ranchers off the land.” If the agencies don’t make significant moves to advance a pro-competition agenda before the midterms, their opportunity could be all but lost.

“Every day we delay, another farmer goes out of business. Another farm is bought up. Another farm is indoctrinated into this corporate mentality,” said Carrie Balkcom, executive director of the American Grassfed Association.

The assessment by the Open Markets Institute and Farm Action recognized improvements, such as the DOJ’s prosecution of poultry producers for price-fixing, as well as efforts to listen to farmers and workers as the DOJ and FTC revise the guidelines they use to assess mergers. However, both Open Markets and Farm Action criticized delays in issuing fair competition rules at both the FTC and USDA, emphasizing USDA’s delay in issuing promised updates to the Packers and Stockyards Act and Product of U.S.A labeling standards. Their assessment also called on antitrust enforcers to break up Big Ag businesses and dust off the Robinson-Patman act, which aims to counteract dominant retailers’ abuse of buyer power.

Other participants in the conference, which included people from across the food supply chain, stressed the urgency of prompt action. Kara Brewer Boyd, a representative from the Lumbee Tribe and president of the Association of American Indian Farmers, explained that farmers are unable to get a fair price for their grain because of consolidation among grain buyers and the loss of local elevators. “There is very little market for small-scale family farmers, especially minority farmers, due to these consolidations.” said Brewer Boyd, in video testimony [[link removed]]. “They basically dictate when we can harvest, when we can sell, and what the price is.”

Many farmers have turned to niche markets, such as organics, to escape the squeeze of powerful conventional buyers, but over time these markets have tended towards consolidation as well, depressing prices. “The corporate consolidation that has happened within organic dairy in the last 10 years has resulted in a lack of competition,” said dairy farmer Ed Maltby of the Northeast Organic Dairy Producers Alliance. “The two largest buyers in the country are creating a price structure that is driving small to mid-sized organic dairy farms out of business.”

Even as the prices they receive decrease, farmers also spoke of increasing prices for the seeds, fertilizers, and equipment they buy, as fewer, larger companies provision these products. “Large scale companies... they take away the choice and they take away the voice of not only Black farmers, but the American farmer,” said farmer and president of the National Black Farmers Association, John Boyd, Jr. As one example, Boyd focused on the challenges he faces as a Black farmer trying to get service from dominant farm equipment manufacturer, John Deere, given their monopolized control over repairing Deere products. Boyd alleged that Deere services white farmers’ tractors faster than Black farmers in his area, creating costly production delays.

Michael Gay, owner of two Fresh Foods grocery stores outside Savannah, Georgia, spoke about how consolidation in retail and the rise of big box stores, such as Walmart, have been sold as a boon to consumers but have driven independent grocers out of business and harmed consumers that rely on these outlets. “When big box stores push out competition, their prices go up,” Gay said. “When guys like me go out of business, all the local stuff goes out of the way.” Gay urged the Federal Trade Commission to enforce the Robinson-Patman Act which would protect small businesses from being driven out of the marketplace by prohibiting discrimination in pricing and promotional allowances.

Regulating buyer power could also benefit workers, added Dennis Olson from the United Food and Commercial Workers, who noted that corporations like Walmart have the power to squeeze even dominant meatpacking corporations, who may cut wages and benefits from their workers to make up the difference.

As the Biden administration approaches the halfway mark in what may be its only term, all three agencies are currently in a critical window of opportunity to respond to the issues raised during the conference. Carrie Balkcom shared that when the Biden administration’s executive order came down, hopes were high for real change. “We all danced around! ... But you see from the report card,” she said, “it's not a good outlook.”

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What We're Reading

Public Justice joined Food & Water Watch in opposing Smithfield’s attempt to dismiss their case alleging the pork producer lied to consumers and put their workers at risk throughout the Covid-19 pandemic. ( Public Justice Food Project [[link removed]])

The U.S. House of Representatives approved a bill that would create a special investigator’s office within USDA’s Packers and Stockyards division to interrogate anticompetitive practices in meat and poultry. ( MeatingPlace [[link removed]])

Democratic lawmakers reintroduced bicameral legislation that would put a moratorium on acquisitions and mergers within the food and ag industries. ( Daily Yonder [[link removed]])

The Thurmon Arnold Project at the Yale School of Management released a compendium of twenty new research papers on competition and equity in food retailing. ( Yale [[link removed]])

About the Open Markets Institute

The Open Markets Institute promotes political, industrial, economic, and environmental resilience. We do so by documenting and clarifying the dangers of extreme consolidation, and by fostering discussions of ways to reestablish America’s political economy on a more stable and fair foundation.

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Written by Amy Huo and Claire Kelloway

Edited by Phil Longman

Open Markets Institute

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