KCA Supports Food and Agribusiness Merger Moratorium and Antitrust Review Act of 2018
Kansas Cattlemen’s Association has signed on in support of a bill set to slow the feverish tide of large agribusiness mergers and acquisitions.
The “Food and Agribusiness Merger Moratorium and Antitrust Review Act of 2018” introduced by Sen. Cory Booker (D-NJ) would impose an 18-month moratorium on “large” agribusiness, food and beverage manufacturing, and grocery retail mergers and acquisitions. The legislation would impact any company with annual net sales or total assets of more than $16 million.
The legislation would also establish a commission to study ways to strengthen antitrust oversight of the farm and food sectors and recommend improvements to merger enforcement.
While the largest multinational agribusiness corporations are posting record earnings, farmers are facing desperate times. Since 2013, net farm income for U.S. farmers has fallen by more than half and median on-farm income is expected to be negative in 2018.
In just the past two years, chemical and seed company acquisitions and mergers have allowed three companies to control two thirds of the crop seed and nearly 70% of the agricultural chemical markets. When these acquisitions and mergers were announced it led U.S. Senator Chuck Grassley (R-IA) to call the wave of mergers a “tsunami.”
Over the last three decades, the growth of market concentration and market power has spun out of control. During this period, the four largest multinational corporations have gained control of 71% of the pork market, 85% of the beef market and 90% of the grain market.
The Food and Agriculture Concentration and Market Power Review Commission which would be established by this legislation will develop recommendations to establish a fair marketplace for family farmers and their communities. The commission would be specifically required to review the impact of vertical integration, packer ownership of livestock, and contracting practices by large agribusinesses on family farmers and suppliers.