New Legislation Introduced by Senator Booker Will Hit the Pause Button on Mega-Mergers
Washington, D.C. — In the wake of unprecedented concentration in the agriculture and food sectors, Senator Cory Booker (D-NJ) introduced legislation yesterday to place a moratorium on large agribusiness, food and beverage manufacturing, and grocery retail mergers and acquisitions. S. 3404, known as the Food and Agribusiness Merger Moratorium and Antitrust Review Act of 2018, would also establish a commission to review mergers, concentration, and market power in those sectors.
Worm Capital July 2020 Performance Update: Up 152% YTD
Worm Capital performance update for the month ended July 31, 2020. Q2 2020 hedge fund letters, conferences and more Long/Short Equity Growth Strategy Net Performance Long-Only Equity Growth Strategy Net Performance
During the past several months, the Organization for Competitive Markets (OCM) has assisted members of Congress with drafting the legislation. OCM expects a companion bill to be filed in the U.S. House of Representatives in the coming weeks.
“We commend Senator Booker for taking this vital step forward. We need Congress to act now to stop mega-mergers until their full impact can be assessed and market safeguards put in place.” stated Joe Maxwell, Executive Director of OCM. “Farmers are being squeezed at both ends by corporations with abusive levels of power, from the sellers of inputs farmers need to the buyers of farmers’ goods. There is simply no profit for the farmer who actually raises and grows the food. Today, farmers are forced to farm for government subsidies and not for the market.”
While the largest multinational agribusiness corporations are posting record earnings, farmers are facing desperate times. Since 2013, net farm income for U.S. farmers has fallen by more than half and median on-farm income is expected to be negative in 2018.
In just the past two years, chemical and seed company acquisitions and mergers have allowed three companies to control two thirds of the crop seed and nearly 70% of the agricultural chemical markets. When these acquisitions and mergers were announced it led U.S. Senator Chuck Grassley to call the wave of mergers a “tsunami.”
Over the last three decades, the growth of market concentration and market power has spun out of control. During this period, the four largest multinational corporations have gained control of 71% of the pork market, 85% of the beef market and 90% of the grain market.
The Food and Agriculture Concentration and Market Power Review Commission which would be established by this legislation will develop recommendations to establish a fair marketplace for family farmers and their communities. The commission would be specifically required to review the impact of vertical integration, packer ownership of livestock, and contracting practices by large agribusinesses on family farmers and suppliers.