Big Ag Firm Mergers
May Face Moratorium

WASHINGTON — Farm-state Democrats, upset with their own administration's handling of recent mergers in the agribusiness industry, proposed an 18-month moratorium Friday.

``Through the exercise of raw power and unfair tactics, corporate agribusiness interests have family farmers on the ropes,'' said Sen. Tom Harkin, D-Iowa. ``The Justice Department is supposed to be the referee, but it has not stepped in to keep the fight fair.''

In one of the latest deals, Smithfield Foods Inc. of Smithfield, Va., the biggest pork processor as well as the largest hog producer, is seeking the department's approval to acquire No. 2 producer Murphy Family Farms of Rose Hill, N.C.

In July, the department allowed Cargill Inc., North America's second-largest grain trader, to acquire the grain operations of Continental Grain, provided the companies sold some of their facilities.

Justice Department officials have said it is in the interest of farmers for U.S. companies to cut their costs because they have to compete overseas.

``This industry is restructuring like a lot of industries outside of agriculture in response to many economic factors,'' said Janet Riley, a spokeswoman for the American Meat Institute, which represents packers.

But the agricultural economy is stuck in its worst downturn since the mid-1980s, and although economists blame it on overproduction of crops and livestock, many lawmakers have been pointing to agribusiness mergers as a culprit.

Legislation was also proposed in the Senate Friday that would ban Smithfield and other meatpackers from owning livestock. Packers can manipulate prices more easily when they own their own cattle or hogs, said Sen. Tim Johnson, D-S.D. The sponsors include two Republicans, Charles Grassley of Iowa and Craig Thomas of Wyoming.

The lawmakers won a battle with the packers earlier in the week when the Senate gave final approval to legislation that would require them to start reporting the prices they pay for cattle and hogs. Producers say that it will make it easier for them to bargain with the packers.

The proposed moratorium would apply to mergers involving at least one firm with revenue or assets of more than $100 million.