[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3159 Introduced in House (IH)]
106th CONGRESS
1st Session
H. R. 3159
To impose a moratorium on large agribusiness mergers and to establish a
commission to review large agriculture mergers, concentration, and
market power.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 27, 1999
Mr. Pomeroy (for himself, Mr. Minge, and Ms. Baldwin) introduced the
following bill; which was referred to the Committee on Agriculture, and
in addition to the Committee on the Judiciary, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To impose a moratorium on large agribusiness mergers and to establish a
commission to review large agriculture mergers, concentration, and
market power.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Agribusiness Merger Moratorium and
Antitrust Review Act of 1999''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Concentration in the agricultural economy including
mergers, acquisitions, and other combinations and alliances
among suppliers, producers, packers, other food processors, and
distributors has been accelerating at a rapid pace in the
1990's.
(2) The trend toward greater concentration in agriculture
has important and far-reaching implications not only for
family-based farmers, but also for the food we eat, the
communities we live in, and the integrity of the natural
environment upon which we all depend.
(3) In the past decade and a half, the top 4 largest pork
packers have seized control of some 57 percent of the market,
up from 36 percent. Over the same period, the top 4 beef
packers have expanded their market share from 32 percent to 80
percent, the top 4 flour millers have increased their market
share from 40 percent to 62 percent, and the market share of
the top 4 soybean crushers has jumped from 54 percent to 80
percent.
(4) Today the top 4 sheep, poultry, wet corn, and dry corn
processors now control 73 percent, 55 percent, 74 percent, and
57 percent of the market, respectively.
(5) A handful of firms dominate the processing of every
major commodity. Many of them are vertically integrated, which
means that they control successive stages of the food chain,
from inputs to production to distribution.
(6) Growing concentration of the agricultural sector has
restricted choices for farmers trying to sell their products.
As the bargaining power of agribusiness firms over farmers
increases, agricultural commodity markets are becoming stacked
against the farmer.
(7) The farmer's share of every retail dollar has plummeted
from around 50 percent in 1952, to less than 25 percent today,
while the profit share for farm input, marketing, and
processing companies has risen.
(8) While agribusiness conglomerates are posting record
earnings, farmers are facing desperate times. The commodity
price index is the lowest since 1987. Hog prices are at their
lowest since 1972. Cotton and soybean prices are the lowest
they have been since the early 1970's.
(9) The benefits of low commodity prices are not being
passed on to American consumers. The gap between what shoppers
pay for food and what farmers are paid is growing wider. From
1984 to 1998, prices paid to farmers fell 36 percent, while
consumer food prices actually increased by 3 percent.
(10) Concentration, low prices, anticompetitive practices,
and other manipulations and abuses of the agricultural economy
are driving family-based farmers out of business. Farmers are
going bankrupt or giving up, and few are taking their places;
more farm families are having to rely on other jobs to stay
afloat; and the number of farmers leaving the land will
continue to increase unless and until these trends are
reversed.
(11) The decline of family-based agriculture undermines the
economies of rural communities across America; it has pushed
Main Street businesses, from equipment suppliers to insurance
sales people, out of business or to the brink of insolvency.
(12) Increased concentration in the agribusiness sector has
a harmful effect on the environment; corporate hog farming, for
example, threatens the integrity of local water supplies and
creates noxious odors in neighboring communities. Concentration
also can increase the risks to food safety and limit the
biodiversity of plants and animals.
(13) The decline of family-based farming poses a direct
threat to American families and family values, by subjecting
farm families to turmoil and stress.
(14) The decline of family-based farming causes the demise
of rural communities, as stores lose customers, churches lose
congregations, schools and clinics become under-used, career
opportunities for young people dry up, and local inequalities
of wealth and income grow wider.
(15) These developments are not the result of inevitable
market forces. Its problems arise rather from policies made in
Washington, including farm, antitrust, and trade policies.
(16) To restore competition in the agricultural economy,
and to increase the bargaining power and enhance economic
prospects for family-based farmers, the trend toward
concentration must be reversed.
SEC. 3. DEFINITIONS.
In this Act:
(1) Broker.--The term ``broker'' means any person engaged
in the business of negotiating sales and purchases of any
agricultural commodity in interstate or foreign commerce for or
on behalf of the vendor or the purchaser, except that no person
shall be considered a broker if the only sales of such commodities are
for a value less than $10,000,000 per year.
(2) Commission merchant.--The term ``commission merchant''
means any person engaged in the business of receiving in
interstate or foreign commerce any agricultural commodity for
sale, on commission, or for or on behalf of another, except
that no person shall be considered a commission merchant if the
only sales of such commodities are for a value less than
$10,000,000 per year.
(3) Dealer.--The term ``dealer'' means any person engaged
in the business of buying, selling, or marketing agricultural
commodities in interstate or foreign commerce, except that--
(A) no person shall be considered a dealer with
respect to sales or marketing of any agricultural
commodity of that person's own raising; and
(B) no person shall be considered a dealer if the
only sales of such commodities are for a value less
than $10,000,000 per year.
(4) Agricultural input supplier.--The term ``agricultural
input supplier'' means any person engaged in the business of
selling, in interstate or foreign commerce, any product to be
used as an input (including seed, germ plasm, hormones,
antibiotics, fertilizer, and chemicals, but excluding farm
machinery) for the production of any agricultural commodity,
except that no person shall be considered an agricultural input
supplier if sales of such products are for a value less than
$10,000,000 per year.
(5) Processor.--The term ``processor'' means any person
engaged in the business of handling, preparing, or
manufacturing (including slaughtering) of an agricultural
commodity, or the products of such agricultural commodity, for
sale or marketing for human consumption, except that no person
shall be considered a processor if the only sales of such
products are for a value less than $10,000,000 per year.
TITLE I--MORATORIUM ON LARGE AGRIBUSINESS MERGERS
SEC. 101. MORATORIUM ON LARGE AGRIBUSINESS MERGERS.
(a) In General.--
(1) Moratorium.--Until the date referred to in paragraph
(2) and except as provided in subsection (b)--
(A) no dealer, processor, commission merchant,
agricultural input supplier, broker, or operator of a
warehouse of agricultural commodities with annual net
sales or total assets of more than $100,000,000 shall
merge or acquire, directly or indirectly, any voting
securities or assets of any other dealer, processor,
commission merchant, agricultural input supplier,
broker, or operator of a warehouse of agricultural
commodities with annual net sales or total assets of
more than $10,000,000; and
(B) no dealer, processor, commission merchant,
agricultural input supplier, broker, or operator of a
warehouse of agricultural commodities with annual net
sales or total assets of more than $10,000,000 shall
merge or acquire, directly or indirectly, any voting
securities or assets of any other dealer, processor,
commission merchant, agricultural input supplier,
broker, or operator of a warehouse of agricultural
commodities with annual net sales or total assets of
more than $100,000,000 if the acquiring person would
hold--
(i) 15 percent or more of the voting
securities or assets of the acquired person; or
(ii) an aggregate total amount of the
voting securities and assets of the acquired
person in excess of $15,000,000.
(2) Date.--The date referred to in this paragraph is the
earlier of--
(A) the effective date of comprehensive
legislation--
(i) addressing the problem of market
concentration in the agricultural sector; and
(ii) containing a section stating that the
legislation is comprehensive legislation as
provided in section 101 of the Agribusiness
Merger Moratorium and Antitrust Review Act of
1999; or
(B) the date that is 18 months after the date of
enactment of this Act.
(b) Exceptions.--
(1) Waiver authority.--The Attorney General shall have
authority to waive the moratorium imposed by subsection (a)
only under extraordinary circumstances, such as insolvency or
similar financial distress of 1 of the affected parties.
(2) Cooperative associations.--Subsection (a) shall not
apply to a cooperative association (as defined in section 15(a)
of the Agricultural Marketing Act (12 U.S.C. 1141j(a)) or to an
entity owned by a cooperative association.
TITLE II--AGRICULTURE CONCENTRATION AND MARKET POWER REVIEW COMMISSION
SEC. 201. ESTABLISHMENT OF COMMISSION.
(a) Establishment.--There is established a commission to be known
as the Agriculture Concentration and Market Power Review Commission
(hereafter in this title referred to as the ``Commission'').
(b) Purposes.--The purpose of the Commission is to--
(1) study the nature and consequences of concentration in
America's agricultural economy; and
(2) make recommendations on how to change underlying
antitrust laws and other Federal laws and regulations to keep a
fair and competitive agriculture marketplace for family
farmers, other small and medium sized agriculture producers,
generally, and the communities of which they are a part.
(c) Membership of Commission.--
(1) Composition.--The Commission shall be composed of 12
members as follows:
(A) Three persons, one of whom shall be a person
currently engaged in farming or ranching, shall be
appointed by the President pro tempore of the Senate
upon the recommendation of the Majority Leader of the
Senate, after consultation with the Chairman of the
Committee on Agriculture, Nutrition, and Forestry.
(B) Three persons, one of whom shall be a person
currently engaged in farming or ranching, shall be
appointed by the President pro tempore of the Senate
upon the recommendation of the Minority Leader of the
Senate, after consultation with the ranking minority
member of the Committee on Agriculture, Nutrition, and
Forestry.
(C) Three persons, one of whom shall be a person
currently engaged in farming or ranching, shall be
appointed by the Speaker of the House of
Representatives, after consultation with the Chairman
of the Committee on Agriculture.
(D) Three persons, one of whom shall be a person
currently engaged in farming or ranching, shall be
appointed by the Minority Leader of the House of
Representatives, after consultation with the ranking
minority member of the Committee on Agriculture.
(2) Qualifications of members.--
(A) Appointments.--Persons who are appointed under
paragraph (1) shall be persons who--
(i) have experience in farming or ranching,
expertise in agricultural economics and
antitrust, or have other pertinent
qualifications or experience relating to
agriculture and agriculture industries; and
(ii) are not officers or employees of the
United States.
(B) Other consideration.--In appointing Commission
members, every effort shall be made to ensure that the
members--
(i) are representative of a broad cross
sector of agriculture and antitrust
perspectives within the United States; and
(ii) provide fresh insights to analyzing
the causes and impacts of concentration in
agriculture industries and sectors.
(d) Period of Appointment; Vacancies.--
(1) In general.--Members shall be appointed not later than
60 days after the date of enactment of this Act and the
appointment shall be for the life of the Commission.
(2) Vacancies.--Any vacancy in the Commission shall not
affect its powers, but shall be filled in the same manner as
the original appointment.
(e) Initial Meeting.--Not later than 30 days after the date on
which all members of the Commission have been appointed, the Commission
shall hold its first meeting.
(f) Meetings.--The Commission shall meet at the call of the
Chairperson.
(g) Chairperson and Vice Chairperson.--The members of the
Commission shall elect a chairperson and vice chairperson from among
the members of the Commission.
(h) Quorum.--A majority of the members of the Commission shall
constitute a quorum for the transaction of business.
(i) Voting.--Each member of the Commission shall be entitled to 1
vote, which shall be equal to the vote of every other member of the
Commission.
SEC. 202. DUTIES OF THE COMMISSION.
(a) In General.--The Commission shall be responsible for examining
the nature, the causes, and consequences concentration in America's
agricultural economy in the broadest possible terms.
(b) Issues To Be Addressed.--The study shall include an examination
of the following matters:
(1) The nature and extent of concentration in the
agricultural sector, including food production, transportation,
processing, distribution and marketing, and farm inputs such as
machinery, fertilizer, and seeds.
(2) Current trends in concentration of the agricultural
sector and what this sector is likely to look like in the near
and longer term future.
(3) The effect of this concentration on farmer income.
(4) The impacts of this concentration upon rural
communities, rural economic development, and the natural
environment.
(5) The impacts of this concentration upon food shoppers,
including the reasons that Depression-level farm prices have
not resulted in corresponding drops in supermarket prices.
(6) The productivity of family-based farm units, compared
with corporate based agriculture, and whether farming is
approaching a scale that is larger than necessary from the
standpoint of productivity.
(7) The effect of current laws and administrative practices
in supporting and encouraging this concentration.
(8) Whether the existing antitrust laws provide adequate
safeguards against, and remedies for, the impacts of
concentration upon family-based agriculture, the communities
they comprise, and the food shoppers of this Nation.
(9) Accurate and reliable data on the national and
international markets shares of multinational agribusinesses,
and the portion of their sales attributable to exports.
(10) Barriers that inhibit entry of new competitors into
markets for the processing of agricultural commodities, such as
the meat packing industry.
(11) The extent to which developments, such as formula
pricing, marketing agreements, and forward contracting tend to
give processors, agribusinesses, and other buyers of
agricultural commodities additional market power over producers and
suppliers in local markets.
(12) Such related matters as the Commission determines to
be important.
SEC. 203. FINAL REPORT.
(a) In General.--Not later than 12 months after the date of the
initial meeting of the Commission, the Commission shall submit to the
President and Congress a final report which contains--
(1) the findings and conclusions of the Commission
described in section 202; and
(2) recommendations for addressing the problems identified
as part of the Commission's analysis.
(b) Separate Views.--Any member of the Commission may submit
additional findings and recommendations as part of the final report.
SEC. 204. POWERS OF COMMISSION.
(a) Hearings.--The Commission may hold such hearings, sit and act
at such times and places, take such testimony, and receive such
evidence as the Commission may find advisable to fulfill the
requirements of this title. The Commission shall hold at least 1 or
more hearings in Washington, D.C., and 4 in different agriculture
regions of the United States.
(b) Information From Federal Agencies.--The Commission may secure
directly from any Federal department or agency such information as the
Commission considers necessary to carry out the provisions of this
title. Upon request of the Chairperson of the Commission, the head of
such department or agency shall furnish such information to the
Commission.
(c) Postal Services.--The Commission may use the United States
mails in the same manner and under the same conditions as other
departments and agencies of the Federal Government.
SEC. 205. COMMISSION PERSONNEL MATTERS.
(a) Compensation of Members.--Each member of the Commission shall
be compensated at a rate equal to the daily equivalent of the annual
rate of basic pay prescribed for level IV of the Executive Schedule
under section 5315 of title 5, United States Code, for each day
(including travel time) during which such member is engaged in the
performance of the duties of the Commission.
(b) Travel Expenses.--The members of the Commission shall be
allowed travel expenses, including per diem in lieu of subsistence, at
rates authorized for employees of agencies under subchapter I of
chapter 57 of title 5, United States Code, while away from their homes
or regular places of business in the performance of services for the
Commission.
(c) Staff.--
(1) In general.--The Chairperson of the Commission may,
without regard to the civil service laws and regulations,
appoint and terminate an executive director and such other
additional personnel as may be necessary to enable the
Commission to perform its duties. The employment of an
executive director shall be subject to confirmation by the
Commission.
(2) Compensation.--The Chairperson of the Commission may
fix the compensation of the executive director and other
personnel without regard to the provisions of chapter 51 and
subchapter III of chapter 53 of title 5, United States Code,
relating to classification of positions and General Schedule
pay rates, except that the rate of pay for the executive
director and other personnel may not exceed the rate payable
for level V of the Executive Schedule under section 5316 of
such title.
(d) Detail of Government Employees.--Any Federal Government
employee shall be detailed to the Commission without reimbursement, and
such detail shall be without interruption or loss of civil service
status or privilege.
(e) Procurement of Temporary and Intermittent Services.--The
Chairperson of the Commission may procure temporary and intermittent
services under section 3109(b) of title 5, United States Code, at rates
for individuals which do not exceed the daily equivalent of the annual
rate of basic pay prescribed for level V of the Executive Schedule
under section 5316 of such title.
SEC. 206. SUPPORT SERVICES.
The Administrator of the General Services Administration shall
provide to the Commission on a reimbursable basis such administrative
support services as the Commission may request.
SEC. 207. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated $2,000,000 to the
Commission as required by this title to carry out the provisions of
this title.
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