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Anti-trust politicsI attended a workshop on anticompetitive behavior in the livestock and biotech seed industries last week that looked more like a government hearing. It is the first time the U.S. Attorney General and the U.S. Secretary of Agriculture have met to talk about competition since the Sherman Antitrust Act and the Packers and Stockyards Act were passed nearly a century ago. The outcome of this series of meetings is far from certain, but it will either manifest itself in the courts or in the next presidential election. In either case, this administration is positioning itself to win. The question is: "Who loses?" Let's have a little internal reflection on control of the marketplace and our personal views on free and fair trade. Remember that a large farmer is defined as anyone bigger than you are, and anticompetitive is anyone who prices an item at a price that is higher than you think it should be. Based on this, ask yourself if the good feeling of seeing government restructure the big players will be good or bad for your bottom line. Livestock producers have been calling for enforcement of the Packers and Stockyards Act for generations, yet the number of meat processing companies has continued to shrink and vertical integration has allowed them to own or contract all but a small portion of their needs. Congressional outcry against their buying practices has been audible for at least 30 years, yet nothing has been done to reverse the trend. In the workshop/hearing, an official of the USDA took credit for discouraging Brazilian beef producer JBS from buying National Beef, even though the official record indicates that negotiations were terminated, rather than the government blocking the action. If the Obama administration wishes to stand up for the little livestock producer, it appears they need do nothing more than enforce the laws on the books under the jurisdiction of Grain Inspection Packers and Stockyards Administration. There is another dilemma, however, if the meat packers plead that they are being unfairly treated by retailers. Where to start seems to be a bigger problem than what to do. In the biotech seed industry, the issue is reasonably new but growing rapidly. The germplasm and biotechnology traits in the vast majority of planted acres of major crops are held by a small number of companies. The primary focus of this hearing was on Monsanto and whether its patents and practices are anticompetitive. Outside the hearing, the seed industry argues that their contracts with Monsanto are so weighted in favor of the biotech giant that they have to pay 70 percent of the price of a bag of seed in royalties. Seed producers also claim they are tied up for as much as 20 years in the future if they try to break away. An interesting aside in this debate is the "patenting of life." According to Neil Harl, Ph.D., professor emeritus from Iowa State University, the U.S. Patent Office declined to patent living organisms but was overruled by the U.S. Supreme Court. Since Congress has never addressed the issue, it raises the question of whether such a far-reaching decision should have been made by the court system. All of this leaves out the most important element for a first-term president: politics. Is there a measurable gain from bringing antitrust action against the big players in agriculture? Within the room, a sizable number were in opposition to the status quo. Every person who testified from the audience microphone had a story of being wronged by the existing system. Fanning the flames and counting votes that could be garnered from the dissident, disaffected and dissatisfied could result in a sizable electoral benefit in 2012. However, I have called this administration's agriculture policies: "Zimbabwe West." And all should fear the effects of dismantling the current system in the name of political gain. If Monsanto were stripped of its patents on biotech materials and its dominance in germplasm holdings placed under separate ownership, what would happen to the infrastructure of our agricultural system? It could spur competition and lower prices, but it also could encourage violation of patent laws and void prosecution of farmers who replant biotech seed. This could result in less investment in new technology traits and stagnate the research and development that farmers rely on to increase their yields and profitability. Corporate agriculture and major commodity groups clearly did not support the Democrats who won the White House in 2008. There is no debt or allegiance that has to be served by this administration. There is, however, the prospect that legal action to end monopolistic behavior could cause chaos in the marketplace and result in food insecurity, which would drive up prices and have negative repercussions. If the upside could be gained in 2012, with the downside not realized until 2016, is it worth it? Vengeance is said to taste sweet, but I caution that it is likely to be bitter. Editor's Note: Ken Root is an independent agricultural journalist. He was named the 2009 Farm Broadcaster of the Year and was the 2008 winner of the Oscar in Agriculture. He is an Oklahoma native and an experienced print, radio and television journalist. He has spent the last five years as Lead Farm Broadcaster at WHO Radio in¬ Des Moines, Iowa. He and his wife Gail have two adult children and two grandchildren.
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