August 21, 2009Client Alert

U.S. Department of Justice and U.S. Department of Agriculture Announce Plans to Investigate Alleged Anti-Competition in the Agriculture Industry

While on the campaign trail last year, then-candidate Barack Obama vowed, if elected, to investigate aspects of industry consolidation and prevent what he alleged to be anti-competitive behavior in the nation’s agribusinesses. A recently announced joint initiative between the U.S. Departments of Justice and Agriculture reveals the Administration’s approach to that promise, and appears likely to result next year in agriculture coming under the Administration’s scrutiny - - like financial institutions, car companies and health care insurers, which have also come under the Administration’s scrutiny (although not from an anti-trust or anti-competitive standpoint).

U.S. Attorney General, Eric Holder, and U.S. Department of Agriculture Secretary, Tom Vilsack, recently announced that their departments will be holding unprecedented joint public workshops to “explore competition issues and the appropriate role for anti-trust and regulatory enforcement in the agricultural industry.” The workshops will be held in farming communities throughout the United States in 2010, and are currently being scheduled. According to the joint press release, the workshops will focus on competitive issues including alleged monopolies, concentrated buying power (monopsony) and vertical integration in the agriculture industry. Interested parties will also be given an opportunity at the workshops to discuss concerns regarding anti-competitive conduct and the application of anti-trust laws in agricultural markets.

The Administration has indicated it will first explore seed companies, then meat packers and lastly, the nation’s milk processors. Critics of the Bush Administration pointed to approvals of large-scale industry consolidation in the meat packing and dairy sectors as evidence that a more aggressive anti-trust policy must be advanced.

The full joint U.S. Department of Justice/U.S. Department of Agriculture press release can be viewed here:

The two departments are soliciting input from the public on additional topics to be discussed at the workshops. Additional information about the workshop dates, times and locations will be provided by the two Department’s in the near future.

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