[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1739 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1739

To impose a moratorium on large agribusiness mergers and to establish a 
  commission to review large agriculture mergers, concentration, and 
                             market power.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 15, 1999

Mr. Wellstone (for himself, Mr. Dorgan, Mr. Daschle, Mr. Feingold, Mr. 
  Harkin, Mr. Johnson, and Mr. Leahy) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 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 
        (excluding agricultural cooperatives) 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 
        (excluding agricultural cooperatives) 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) 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.

 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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