Merger Moratorium Bill Fails
By Wide Margin In Senate Vote

WASHINGTON —(AP)— The Senate has refused to slow down the mergers of food and agriculture companies that many growers blame for the downturn in the farm economy.

``This is not the way to help the family farmers. We should trust the marketplace,'' said Sen. Gordon Smith, an Oregon Republican who made millions in the frozen foods business.

The Senate voted 71-27 last week against imposing an 18-month moratorium on agribusiness mergers. Iowa Sen. Charles Grassley was the lone Republican to support the measure, while 19 Democrats joined 52 GOP senators in voting against it.

Economists say worldwide overproduction of grain, not agribusiness consolidation, is the reason for depressed commodity prices. But some farm groups complain that producers are losing their independence and bargaining power as the number of food processors, grain traders and farm suppliers shrinks.

Midwest Democrats say the Justice Department has not done enough to curb a recent wave of agribusiness mergers and acquisitions, including the purchase by giant grain trader Cargill Inc. of one of its major competitors.

``Farm families and their communities have their backs against the wall and are fighting for their survival,'' said Sen. Tom Harkin, D-Iowa. ``They are being overrun by economic forces far, far more powerful than they are.''

The moratorium would have applied to all mergers where one company had net revenue of more than $100 million and the other had more than $10 million. Farmer-owned cooperatives would have been exempt from the measure.

The department now is reviewing a deal in which the nation's largest pork processor, Smithfield Foods Inc., would take over its nearest competitor. Also, the Monsanto Co., a major supplier of seed and farm chemicals, reportedly is in merger talks with some of its competitors.

Justice Department officials say that mergers can help farmers by cutting costs for U.S. companies, making them more competitive with foreign competitors.

Farmers have been divided over whether Congress should intervene in the consolidation. Some farmers say they benefit by growing crops and livestock under contract with big food processors, and the American Farm Bureau Federation lobbied against the moratorium.

``If you want to help farmers you go after the regulations that are strangling them. You open up international markets,'' Smith said.

Republicans blocked Sen. Paul Wellstone, D-Minn., from making last-minute changes intended to attract additional GOP votes.

Grassley said he wanted to send a signal to the Justice Department ``to take a closer look'' at agribusiness mergers.

``With the steady increase in concentration, it's no wonder family farmers believe their independence and access to a competitive marketplace is becoming a thing of the past,'' Grassley said.