Senator Proposes Moratorium
On Further Ag Sector Mergers

WASHINGTON — A senator from Minnesota is expected to introduce stronger anti-trust legislation this week after calling for the halt of mergers and acquisitions among large agribusinesses until the Senate can study the problem.

Sen. Paul Wellstone, D-Minn., will introduce legislation, probably this week, according to aides, with Sen. Patrick Leahy, D-Vt., chairman of the Senate Agriculture Committee, that would tighten anti-trust laws.

Earlier this month, Wellstone introduced a bill that would place a moratorium on mergers, acquisitions and marketing agreements among agribusinesses with net revenues or assets over $50 million until a study of the situation can be conducted, but there appear to be no plans for such a study.

"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."

He says Congress needs to take a hard look at how antitrust laws are functioning in the new global economy.

"There are serious questions about whether or not these laws are adequate in the face of unchecked global concentration," Wellstone says.

Wellstone contends there is more at stake than efficiency.

"Even if these mergers did improve efficiency, there are other values that we have to consider," he says. "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, and we need to look at the question of food sustainability."

He says it is increasingly dangerous to rely on only a few companies for the nation's 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," Wellstone says. "Antitrust is key to this whole equation."

Wellstone called for a moratorium on mergers and acquisitions among agribusinesses two weeks ago at the Economic Concentration in Agriculture Conference in Cedar Rapids, Iowa, which he attended with Sen. Chuck Grassley, R-Iowa, and Sen. Tom Harkin, D-Iowa.

Joel Klein, the Assistant Attorney General for Antitrust at the Justice Department, and Michael Dunn, USDA Undersecretary for Marketing and Regulatory Programs, who oversees the Packers and Stockyard Administration, were also at the conference.

Wellstone brought Klein and Dunn to the Midwest for a town meeting on concentration in agriculture on April 18 at the old stockyards in South St. Paul, Minnesota.

Wellstone introduced his bill on Sept. 13, calling for a halt to acquisitions and mergers until the problem can be studied.

While Wellstone calls for a temporary moratorium on mergers and acquisitions in agriculture, the next step is vague.

Andy McDonald of Wellstone's staff says there is no specific study being proposed. Wellstone is hoping that the Senate will pass some strong anti-trust legislation or will look into the matter and have substantive hearings on it, but no specific actions are planned.

"There are a number of different possibilities," McDonald says. "Paul's going to be introducing legislation with Patrick Leahy which will have significant antitrust provisions in it."

That legislation, expected to be introduced this week, could lead to a study of concentration, McDonald says.

Even then, he admits, such legislation would not cover existing concentrations of power in the hands of packers or other agriculture-related businesses.

Wellstone, McDonald says, has been a strong advocate of anti-trust action, hoping that the Senate would do something. The Minnesota senator thinks there are problems with existing anti-trust laws.

"It's more that he's not convinced that they are being enforced and wants to make sure that this Congress takes a good look at them and make sure they are still relevant for the new economy and the way the farm economy works nowadays," McDonald says.