Minnesota's attorney general says more needs to be done to eliminate and prevent monopolies in the ag sector.
At a recent session of the Sustainable Farming Association 2021 annual conference, Minnesota Attorney General Keith Ellison shared the state's response to concentration in the ag industry, which has caused lower prices and less competition among producers.
"In Washington and other parts of our country as well, there's a lot of conversation going on around monopoly and market concentration — not enough in the agricultural sector," Ellison said. "There's attention focused around Facebook and Google, and that's appropriate, but we need to focus on ag monopoly."
Ellison said that former U.S. Ag Secretary Sonny Perdue's controversial comments in 2019 that with America's farms the "big get bigger and small go out," has been the U.S. ag policy for "quite a long time."
"This is directly contrary to what the policy should be. Under the Sherman and Clayton (Antitrust Acts), it should be that the small should get the help, and the big should be regulated," Ellison said. "We should be seeking to increase the number of participants in the market, add more producers, which will give us greater variety and make more competitive, healthier markets."
But instead, Ellison said for decades the ag industry in the U.S. has experienced market concentration, which hasn't resulted in a cheaper product for consumers.
"Since 1970, more than 90% of American dairy farms have gone out of business," Ellison said. "The price farmers get paid for milk has dropped, but if you go shopping for milk, you know that milk cost what it did before."
When small producers go out of business they are purchased by larger ones. According to Ellison, market consolidation has resulted in 85% of the beef market, 90% of global grain trade and 70-80% of pork packers being controlled by four companies. He said that half of chicken farmers work in regions controlled by just one or two processing companies.
"You wonder why three out of four poultry farmers live in poverty — it's not because people don't like chicken; people eat chicken all the time," Ellison said. "Chicken farmers should be making a lot of money, but the market is controlled by the giant players."
He said it's the same story for hog producers and the sales of herbicides and pesticides.
"The truth is, whenever I see mergers, I see them skeptically, and we go right to work to figure out how we can be opposed to them," Ellison said.
Ellison said what the ag sector "needs more than anything" is antitrust enforcement. In order to do so, legislation would need to be passed that essentially changes the current laws.
"Between Supreme Court decisions and legislation, and just administrative inertia, it's been very difficult to challenge these mergers and stop market concentration," Ellison said.
The attorney general's office in Minnesota is asking the state legislature for more funding to "staff up on this area," Ellison said. He said along with working with other attorneys general offices, they are "engaging with federal partners" to put pressure on the Biden administration to do more work on antitrust enforcement.
Last spring, Ellison was one of the 11 attorneys general in Midwestern states that urged the Justice Department to pursue a federal investigation into market concentration and potential price fixing in the cattle industry during the pandemic.