June 25, 2012

DOJ ain’t the new sheriff in town, after all

Leo Horrigan, MHS

Leo Horrigan, MHS

CLF Correspondent

Center for a Livable Future

Attorney General Eric Holder and Secretary of Agriculture Tom Vilsack (right)

Ask and you shall receive …

In early April I wrote a blogpost lamenting the fact that the U.S. Department of Justice had not followed up on its nationwide “workshops” on competition in agricultural markets that were held throughout 2010. The lack of follow-up seemed a bold-faced betrayal of farmer hopes, especially after Attorney General Eric Holder had referred to the first workshop as “a milestone” and had done some tough antitrust talking at the event.

Well, lo and behold, the DOJ heard my plaintive call for follow-up and mustered a report about the workshops, released in May. All right, so my blogpost had nothing to do with the report being issued, but a man can dream, can’t he?

At any rate, I am one of the 11 people in the world outside of government who actually read the report.  It’s only 24 pages long, and it left me wanting more—not pages, just substance. Or, maybe some good news for a change.

What contract farmers—those who operate concentrated animal feeding operations, or CAFOs—were hoping is that the Department of Justice would see monopoly (and monopsony) power in the meat industry as something that enables integrators to mistreat the farmers who raise chickens or hogs for them, for example. Then, presumably, the DOJ would do something to rein in this corporate power.

Instead, the DOJ used a whole lot of verbiage to tell contract farmers, in essence, “Sorry, but we can’t help you much, ’cause this ain’t our department.”

Here’s some of the verbiage from the report:

“The [antitrust] laws apply only if a practice diminishes competition in the market as a whole, although there may be abuse of a single producer. The Supreme Court has stated that ‘[e]ven an act of pure malice by one business competitor against another does not, without more, state a claim under the federal antitrust laws’ and that ‘those laws do not create a federal law of unfair competition.’ ”

Translation:  Current antitrust laws do nothing to protect a contract grower from abuse by an integrator. If this interpretation of the law is correct, it begs the question: When will Congress or the executive branch step up and push legislation that better protects the rights and business interests of CAFO operators?

On the other hand, didn’t the DOJ know these limitations of the antitrust laws before the 2010 workshops began? Wouldn’t it have made sense to spell this out ahead of time, instead of unjustifiably raising farmer hopes? If DOJ had been more up front, it could have saved farmers and ranchers a lot of the effort they went through to share their stories, and the risks they took in doing so.

Nevertheless, the DOJ manages to paint a very happy picture of the outcomes from the whole sordid exercise. To wit:

“The Division emerges from the workshops better prepared and rededicated to fulfilling its important role in fostering a healthy and competitive agricultural sector. Vigorous antitrust enforcement is imperative, and the Division has redoubled its already active enforcement activities.”

Vigorous antitrust enforcement? Really? Take a gander at these statistics: The top four beef packing firms controlled 81 percent of the market in 2001; in pork, the top four packing companies controlled 66 percent of the market as of 2006; and in chicken, the top four broiler producers controlled almost 60 percent of the market in 2006.

Given such numbers, DOJ pronouncements about redoubling its enforcement efforts ring a bit hollow. We all know what double of nothing is.

Photo: Kris Hite

One Comment

  1. Posted by Craig Watts

    You know seems like they would have looked a little harder at what their “department” is before beebopping all over the country. It would have saved me alot of wasted time and the taxpayers alot of wasted money. Why didn’t they just address the fact that the PSA is not an anti-trust law. This would have helped much more. Enablers are worse than perps in my opinion. Maybe our government should be paid via the ranking sytem.

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