OT: Ag Mergers, monopolies, who controls your food

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For the week of Oct. 4, 1999

The Concern Over Market Consolidation

By: C. David Kelly

Life in rural America has been anything but tranquil during the past 36 months. Prices for some commodities have hit lows not seen since the Great Depression. Foreign market opportunities are being squeezed. Regulatory costs are shooting through the roof. Many family farmers, seeing production costs far exceed their returns, aren't sure whether they will still be in business a year from now.

Now, another wrinkle has been thrown into producers' bowl of worries. The recent purchase of Murphy Family Farms by Smithfield Foods, which will combine two of the nation's largest hog companies, is the latest of a growing list of major mergers in the agribusiness industry. The purchase comes on the heels of Cargill's acquisition of the grain operations of Continental Grain Co., which combined two of the world's largest grain companies.

The growing list of mergers fuels farmers' fears that unless they are under contract with a large conglomerate, they will have no place to market their products. It's a concern Farm Bureau is focusing a sharp eye on.

"Farm Bureau is concerned about consolidation," said Joe Miller, a policy specialist with the American Farm Bureau Federation. "The real concern at this point is whether there will be viable marketing alternatives to farmers. The real concern has been if there are only four major packers for cattle and 10 for hogs with these consolidations, what could easily happen is if you don't have a contract with these packers, you may not have anyplace to sell.

"The same is true for grain. If you don't have a contract with, say, Cargill, will you be able to sell your product? Our concern (regarding consolidation) is more on the availability of viable marketing opportunities for farmers not tied to these major corporations."

Preventing such consolidations such as the Murphy/Smithfield or Cargill/Continental would not guarantee that all operations would stay in business, according to Miller. "There's always the possibility that farmers could lose more markets faster by trying to prevent consolidation than by allowing them," he said.

Farm Bureau, however, believes the government should play a role in overseeing that anti-trust laws aren't being violated by such mega-mergers. Farm Bureau is adamant that market opportunities for ALL farmers be protected. To achieve this, Farm Bureau has called on the Justice Department to review all mergers, including the Murphy/Smithfield deal.

"The time has come for the Justice Department to have someone with agricultural expertise to oversee such concentration issues," said AFBF President Dean Kleckner. "Agriculture is a unique industry. It requires someone with the experience and background to ensure anti-trust laws are not being violated and that opportunities for all farmers are protected."

Bipartisan legislation has been introduced in Congress calling for a one-year moratorium on agribusiness mergers. This would allow Congress and the Justice Department to determine just what impact such mergers have on agriculture.

Farmers have enough to worry about during these hard economic times. The last thing they need is to have a product ready for market, but no place to sell it.

C. David Kelly is the assistant director of new services for the American Farm Bureau Federation.

-- marsh (siskfarm@snowcrest.net), October 04, 1999


Reminds me of a time back in '29. Farmers then had experienced a decade of problems before the crash hit the rest of the economy.

-- peace farmer (peacefarmer@webtv.net), October 04, 1999.

Be sure and check out the following web site. www.corporatepredators.org

Check out "The Criminal Element" and "Recent Columns." This is the facts of what is happening in the corporate takeover of America. If Y2K is bad, it will be easier for the corporate hogs to get fatter. If Y2K isn't bad, then we're ruined anyway.

Buy the book, you need to know who all the enemies are. After all, corporations have the best government that money can buy.

-- gilda (jess@listbot.com), October 04, 1999.

Thanks Marsh. Diane, Jim--can somebody make a link to the corporate predator site above. Thanks.

-- gilda (jess@listbot.com), October 04, 1999.

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