The Biden administration is launching a new Agricultural Competition Partnership to “crack down on price-gouging and other anti-competitive practices in food and agricultural markets” and create a new “Farmer Seed Liaison” to deal with patent issues.
As part of the Biden administration’s moves on competition in the economy, USDA announced the new partnership on Wednesday with attorneys general from 31 states “to tackle anti-competitive market structures in agriculture and related industries.”
Agriculture Secretary Tom Vilsack will highlight the partnership at the White House Competition Council meeting marking the second anniversary of President Joe Biden’s Executive Order on Promoting Competition. Biden and several other Cabinet officials will attend the meeting. Other federal departments are launching new efforts tied to mergers as well.
“Under the Agricultural Competition Partnership, this bipartisan group will be able to harness all available legal enforcement tools — at both the state and federal level — to help lower food prices and promote competition in agricultural markets,” the White House stated.
Vilsack said in a news release the effort shows the Biden administration is focused on the negative impacts of corporate consolidation on the economy.
“By placing necessary resources where they are needed most and helping states identify and address anti-competitive and anti-consumer behavior, in partnership with federal authorities, through these cooperative agreements, we can ensure a more robust and competitive agricultural sector,” Vilsack said. “I’m pleased to see that a bipartisan group of states have committed to joining USDA in better protecting the fair and competitive markets that are a critical cornerstone of the American economy.”
The moves reflect attempts by Democrats to tackle competition issues going back to former President Barack Obama’s first term when Vilsack held a series of hearings around the country with the Attorney General’s Office that essentially ended up leading to a government report but no specific actions to slow down industry consolidation.
The new effort also comes after the Third Circuit Court of Appeals last week rejected an attempt by the Justice Department to overturn a lower judge’s ruling that allowed U.S. Sugar to buy Imperial Sugar. The Justice Department had attempted to halt the 2021 merger, arguing it would drive up sugar prices for consumers and businesses in the Southeast.
Also, currently on deck is the $34 billion merger in the grain and oilseed industries between Bunge and Viterra — companies with a combined $121 billion in sales last year. The global merger, announced in June, would combine two of the world’s largest grain exporters and oilseed crushers and put the combined company on par with competitors ADM and Cargill. The Justice Department has not commented on that merger.
With that ruling as background, the Justice Department and Federal Trade Commission on Wednesday also launched their own draft update of merger guidelines, which will update how agencies look at a merger’s impact on competition. DOJ and FTC laid out 13 guidelines tied to competition and concentration that the agencies will use to examine mergers.
“Unchecked consolidation threatens the free and fair markets upon which our economy is based,” said Attorney General Merrick Garland. “These updated Merger Guidelines respond to modern market realities and will enable the Justice Department to transparently and effectively protect the American people from the damage that anti-competitive mergers cause.”
USDA also launched a new “farmer seed liaison” to help give farmers a voice in the patent process. USDA will work with the U.S. Patent and Trademark Office on the effort. USDA stated about the mission of the liaison, “We aim to connect seed growers and intellectual property administrators, antitrust regulators, licensing and labeling enforcers, and other federal partners to ensure that farmers have the choices they need to be successful, this season and beyond.”
According to USDA, the Agricultural Competition Partnership will focus on:
— Anti-competitive market structures and practices, as well as price gouging and other anti-consumer practices in food, retail, meat and poultry processing and other agricultural industries.
— Lack of choices for consumers and producers.
— Conflicts of interest, misuse of intellectual property, and anti-competitive barriers across the food and agricultural supply chains, such as seed markets.
USDA will partner with the Center for State Enforcement of Antitrust and Consumer Protection Laws, which USDA stated is “a neutral, nonpartisan organization that provides similar support to the states.” This will allow USDA to better coordinate with state attorneys general.
The moves in agriculture come while USDA is still in the middle of rewriting proposed rules on the Packers and Stockyards Act — rewriting rules that go back to the 2008 farm bill and attempts in Vilsack’s first term as well as those during the Trump administration to address competition issues. The rules, if finalized, would deal with tournament pricing in the poultry industry as well as “undue and unreasonable preferences” in packer pricing of livestock. The rules would address the ability of a producer to file a claim against packers even if it did not harm overall competition.
A provision currently in the House funding bill for USDA’s fiscal year 2024 would block the department from implementing those Packers and Stockyard rules.
The White House last week also held a listening session on agricultural competition with 16 different organizations about the need for more competition in agricultural markets.