Bill Halts Ag Mergers for One Year

September 17, 1999

Sen. Paul Wellstone (D-MN) has introduced a bill to halt for one year mergers, acquisitions land marketing agreements between agribusinesses with net revenues or assets greater than $50 million. That would give Congress time to determine if antitrust laws need to be revised.

"Our current system isn't working," says Wellstone. "The growing number of mergers and acquisitions in the agricultural sector raise serious questions about concentration of power. The conglomerates have the power and family farmers don't."

Congress needs to study how the current antitrust laws are functioning in a global economy, he adds. "There are serious questions about whether or not these laws are adequate in the face of unchecked global concentration."

Wellstone's action comes in the wake of two controversial mergers -- Cargill-Continental and Smithfield-Murphy Farms. In the first, the Justice Department required Cargill to divest itself of certain assets but found no actual antitrust violations in the deal. There have been calls from the agricultural community for an antitrust investigation of the Smithfield deal, but some analysts have concluded there is little evidence the acquisition actually stifles competition or affects prices of hogs and pork products significantly.

"The big agribusiness companies talk about efficiency, but there's more at stake here," says Wellstone. "Even if these mergers did improve efficiency, there are other values that we have to consider. There just simply does not seem to be room for family farmers in the new system of global concentration. Our rural communities are worse off because of it."

Also at issue is whether the country can sustain its food supply when much of it is controlled by a few large corporations, he adds. "It is increasingly dangerous to rely on only a few companies for our food supply. We need to stop this trend toward two separate societies in America, one urban and well off and the other rural and struggling. Antitrust is key to this whole equation."'