KANSAS CITY, Mo. — At National Farmers Convention 2011 in Kansas City, Mo. a slate of nationally-known agricultural experts examined last year’s five USDA-DOJ joint public workshops to explore competition issues affecting the agricultural sector and the appropriate role for antitrust and regulatory enforcement.
Several panel members stressed that examination of buyer power was extremely important to crafting real solutions to competition issues.
“I think that the issue of monopsony power must be included in the deliberation process as USDA and DOJ determine where to go with the information they discovered,” said Mary Hendrickson, co-director of the Food Circles Networking Project at University of Missouri.
A common theoretical implication of monopsony is that the price of the good is pushed down near the cost of production. When asked about how domestic regulations can impact global food conglomerates, Hendrickson said a global competition policy must be developed.
Mark Lauritsen, international vice president for the United Food and Commercial Workers Union said if Justice officials don’t address the retail end of the equation, that big issue will still negatively impact farmers, ranchers and workers.
From the ranch gate to the grocery store, there is just one group that has taken a larger share of the retail dollar through the years, and they are the end sellers to consumers.
“If the Department of Justice broke up big meat packing companies into a large number of small packers, I’m not sure those small packers could withstand the demands of low prices that are dictated by large retailers,” he said.
For this to happen, panelists said the Federal Trade Commission, as the retail regulator, would have to become involved, in addition to USDA and DOJ.
Richard Oswald, Missouri Farmers Union president and a national board member of the Organization for Competitive Markets noted retail margins are, and packer margins are increasing, while producer margins decrease.
Markets they used to rely on, such as Kansas City, St. Joseph, Mo., and Omaha, Neb., aren’t there anymore, and today, the market offers very little discovery in the cash market.
During the convention members approved several ag policy planks for the coming year. In dairy, members supported the concept of a growth management program, using price as an incentive to manage production.
Members voiced support for reform of the Federal Orders system by ending make allowances, eliminating end product pricing system and establishing a broadly based competitive pricing system as the base price for milk.
In the area of commodity speculation reform, National Farmers supports legislation that will add transparency to futures markets and close the door to excessive speculation by tightening key investment laws and clarifying the oversight mission of the Commodities Futures Trading Commission.
In livestock, members commended USDA and the DOJ for conducting anti-trust listening sessions in 2010. And, the organization recommended implementation of the published GIPSA rules.
Food security issues were also discussed, and members voted to again call for establishing a World Food Reserve. National Farmers is a group marketing, price negotiating and risk management organization for the nation’s farmers and ranchers.
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