Leahy Unveils Comprehensive Agriculture Antitrust Bill ...Bill Responds To Growing Market Clout Of Large Agribusinesses, Would Likely Reign In Powerful Dairy Conglomerate, Suiza Foods, That Has Been Taking Over New England Market

April 12, 2000

WASHINGTON, D.C. (April 12) -- Key Senate agriculture leaders, led by Tom Daschle (D-S.D.) and Patrick Leahy (D-Vt.), today unveiled comprehensive agriculture antitrust legislation that would enhance the bargaining power of farmers to win a fair price for their products and empower the federal government to crack down on unfair or deceptive business practices by large agribusinesses.

At a morning news conference in the U.S. Capitol, Daschle and Leahy, the Senate Democratic Leader and the Ranking Member of the Judiciary Committee, respectively, officially introduced their landmark bill. The Senators' efforts respond to the growing trend in agriculture that has concentrated more and more market power in the hands of a few large agribusinesses. Daschle and Leahy contend that the spate of mergers and consolidations over the past several years continues to put farmers, ranchers, and rural communities at a market disadvantage.

The new bill, the "Farmers and Ranchers Fair Competition Act of 2000" would, for the first time ever, update competition laws to take into account the unique circumstances of family farmers trying to win fair prices for their products. Leahy believes that current antitrust law works well for situations with a few producers -- such as factories -- supplying manufactured products to millions of consumers. But when millions of producers with very similar products want to sell their products to a handful of giant agribusiness buyers, antitrust laws become meaningless.

"We must always remember that bigger is not always better," said Leahy at the news conference, also noting that the bill could reign in the recent spate of Vermont/New England dairy acquisitions by Suiza Foods. "The Justice Department and others need to wake up to cases of market dominance like Suiza and countless others across the country. To those frustrated farmers trampled under by big agribusinesses, this bill will help us finally say ‘enough is enough.' It will enhance competition in rural America by increasing the bargaining power of family farmers and empower the federal government to quickly act against unfair or deceptive business practices."

Current co-sponsors of the Daschle-Leahy bill include Sens. Tom Harkin (D-Iowa), Kent Conrad (D-N.D.), Byron Dorgan (D-N.D.), Tim Johnson (D-S.D.), Russ Feingold (D-Wis.), Herb Kohl (D-Wis.), Bob Kerrey (Neb.), Max Baucus (Mont.), Paul Wellstone (Minn.), Jay Rockefeller (D-W.Va.), Carl Levin (D-Mich.), and Jim Jeffords (R-Vt.). A one-page summary of the bill and the Senator's statement from the news conference follow:

(April 12, 2000) Statement of Sen. Patrick Leahy News Conference To Introduce The Daschle-Leahy "Farmers and Ranchers Fair Competition Act of 2000"

I feel a little like we are shutting the barn door after the cows have already escaped. In many respects, this legislation is already too late to help the thousands of farm families who, in quiet desperation, have gone out of business. Yet this legislation is still vital to the survival of family-sized farmers and ranchers throughout the nation. There is no level playing field in American agriculture today. On one side, we have agri-corporate giants that can raise billions of dollars on Wall Street in the blink of a computer screen simply by issuing pieces of paper and calling it stock. On the other side, we have family farmers with little-to-no bargaining power and who are deep in debt. We must remember that bigger is not always better.

Current antitrust laws have failed our farmers because the focus of these laws is in the wrong direction. Current antitrust law works well for situations with a few producers -- such as factories -- supplying manufactured products to millions of consumers. However, when millions of producers with very similar products want to sell to a couple giant agribusiness buyers, our antitrust laws are almost meaningless. We all are rightly fed up with sign-here-or-lose-your-farm contracts.

This legislation represents a new focus, and new hope. The new focus is on preventing agri-corporate giants from leveraging farmers out of business with unfair, discriminatory and deceptive practices. We aim to force these agri-corporate giants to design corporate mergers in ways that do not significantly harm rural communities or our farm families. I am proud to join with the Democratic Leader and my other colleagues in introducing legislation to enhance competition in rural America by increasing the bargaining power of family-sized farmers and ranchers. Our bill also empowers the Secretary of Agriculture to quickly act against unfair, unjust or deceptive business practices by agricultural processors.

Farmers in each of our regions are faced with particular challenges. In New England -- and in my home state of Vermont -- we have a potential new dairy bully on the block. There was a recent editorial in the Rutland Daily Herald, entitled "Milk Monopoly," and it's about a Texas giant called Suiza Foods. The editorial notes that Suiza "controls 70 percent of the milk market in New England, which ought to worry farmers and consumers alike....Suiza has been buying up milk-processing plants in New England and closing some of them down. The result is a growing monopoly on the handling of milk."

The Justice Department needs to wake up to cases like Suiza and countless others across the country. The Dashle-Leahy bill will help us finally say, "enough is enough." It will help us strengthen the hand of farmers to win themselves a fair price for their product. It is worth quoting Judge Learned Hand. He put it best in the Alcoa case: "it is possible, because of its indirect social or moral effect, to prefer a system of small producers, each dependent for his success upon his own skill and character, to one in which the great mass of those engaged must accept the direction of a few." That is the way our farm economy should work. Our bill will finally make that a reality.

Summary Of The Daschle-Leahy "Farmers and Ranchers Fair Competition Act of 2000"

1. gives the Secretary of Agriculture powerful tools (authority to assess civil money penalties of up to $100,000 per violation) to protect family-sized*/ farmers against unfair, discriminatory, or deceptive practices by large agribusinesses.
   
   
2. allows the Secretary to structure proposed agribusiness mergers in ways that will minimize any potential adverse effects on rural communities, and on farmers or ranchers. Non-compliance by agribusinesses with recommendations of the Secretary (divestiture, for example) may result in civil money fines. [The Secretary cannot stop the merger – but would notify firms of the consequences if they were to merge without complying with USDA recommendations.]
   
   
3. creates a fund (with the fines collected) to compensate farmers injured by the improper actions of agribusinesses.
   
   
4. provides whistleblower protections to farmers and ranchers who report improper activities by agribusinesses;
   
   
5. requires annual reports from large agribusinesses (over $100 million in annual sales) on their cross-ownership of other agribusinesses, their strategic alliances and on any common (interlocking) officers or board members and mandates the USDA be able to inspect agribusiness records relevant to potential violations of the Act.