[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 364 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 364

 To provide for the review of agricultural mergers and acquisitions by 
           the Department of Justice, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 3, 2009

Mr. Grassley (for himself and Mr. Kohl) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To provide for the review of agricultural mergers and acquisitions by 
           the Department of Justice, and for other purposes.

    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 ``Agriculture Competition Enhancement 
Act of 2009''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Agricultural commodity.--The term ``agricultural 
        commodity'' has the meaning given that term in section 102 of 
        the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
            (2) Agricultural cooperative.--The term ``agricultural 
        cooperative'' means an association of persons that meets the 
        requirements of the Capper-Volstead Act (7 U.S.C. 291 et seq.).
            (3) Agricultural industry.--The term ``agricultural 
        industry'' means any dealer, processor, commission merchant, or 
        broker involved in the buying or selling of agricultural 
        commodities.
            (4) Antitrust laws.--The term ``antitrust laws'' has the 
        meaning given that term in the first section of the Clayton Act 
        (15 U.S.C. 12).
            (5) Assistant attorney general.--The term ``Assistant 
        Attorney General'' means the Assistant Attorney General in 
        charge of the Antitrust Division of the Department of Justice.
            (6) Broker.--The term ``broker'' means any person 
        (excluding an agricultural cooperative) engaged in the business 
        of negotiating sales and purchases of any agricultural 
        commodity in commerce for or on behalf of the vendor or the 
        purchaser.
            (7) Chairman.--The term ``Chairman'' means the Chairman of 
        the Federal Trade Commission.
            (8) Commission merchant.--The term ``commission merchant'' 
        means any person (excluding an agricultural cooperative) 
        engaged in the business of receiving in commerce any 
        agricultural commodity for sale, on commission, or for or on 
        behalf of another.
            (9) Dealer.--The term ``dealer'' means any person 
        (excluding an agricultural cooperative) engaged in the business 
        of buying, selling, or marketing agricultural commodities in 
        commerce, except that no person shall be considered a dealer 
        with respect to sales or marketing of any agricultural 
        commodity produced by that person.
            (10) Processor.--The term ``processor'' means any person 
        (excluding an agricultural cooperative) engaged in the business 
        of handling, preparing, or manufacturing (including 
        slaughtering) an agricultural commodity, or the products of 
        such agricultural commodity, for sale or marketing in commerce 
        for human consumption (excluding sale or marketing at the 
        retail level).
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (12) Special counsel.--The term ``Special Counsel'' means 
        the Special Counsel for Competition Matters of the Department 
        of Agriculture established under section 8.
            (13) Task force.--The term ``Task Force'' means the 
        Agriculture Competition Task Force established under section 4.

SEC. 3. DEPUTY ASSISTANT ATTORNEY GENERAL FOR AGRICULTURAL ANTITRUST 
              MATTERS.

    There is in the Antitrust Division of the Department of Justice a 
Deputy Assistant Attorney General for Agricultural Antitrust Matters, 
who shall--
            (1) be responsible for oversight and coordination of 
        antitrust and related matters which affect agriculture, 
        directly or indirectly; and
            (2) work in coordination with the Task Force and the 
        Department of Agriculture on all agricultural competition 
        matters.

SEC. 4. AGRICULTURE COMPETITION TASK FORCE.

    (a) Establishment.--There is established, under the authority of 
the Attorney General, the Agriculture Competition Task Force, to 
examine problems in agricultural competition.
    (b) Membership.--The Task Force shall consist of--
            (1) the Deputy Assistant Attorney General for Agricultural 
        Antitrust Matters, who shall serve as chairperson of the Task 
        Force;
            (2) the Special Counsel;
            (3) a representative from the Federal Trade Commission;
            (4) a representative from the Department of Agriculture, 
        Office of Packers and Stockyards;
            (5) 2 representatives selected jointly by the attorneys 
        general of States desiring to participate in the Task Force;
            (6) 2 representatives selected jointly by the heads of the 
        departments of agriculture (or similar such agency) of States 
        desiring to participate in the Task Force;
            (7) 4 individuals who represent the interests of small 
        family farmers, ranchers, and independent producers--
                    (A) 1 of whom shall be selected by the majority 
                leader of the Senate;
                    (B) 1 of whom shall be selected by the minority 
                leader of the Senate;
                    (C) 1 of whom shall be selected by the Speaker of 
                the House of Representatives; and
                    (D) 1 of whom shall be selected by the minority 
                leader of the House of Representatives; and
            (8) 8 academics or other independent experts working in the 
        field of agriculture, agricultural law, antitrust law, or 
        economics--
                    (A) 2 of whom shall be selected by the majority 
                leader of the Senate;
                    (B) 2 of whom shall be selected by the minority 
                leader of the Senate;
                    (C) 2 of whom shall be selected by the Speaker of 
                the House of Representatives; and
                    (D) 2 of whom shall be selected by the minority 
                leader of the House of Representatives.
    (c) Duties.--The Task Force shall--
            (1) investigate problems in competition in the agricultural 
        industry;
            (2) define and focus the national public interest in 
        preserving an independent family farm and ranch sector;
            (3) coordinate Federal and State activities to address 
        unfair and deceptive practices and concentration in the 
        agricultural industry;
            (4) work with representatives from agriculture and rural 
        communities to identify abusive practices in the agricultural 
        industry;
            (5) submit to Congress such reports as the Task Force 
        determines on the state of family farmers and ranchers, and the 
        impact of agricultural concentration and unfair business 
        practices on rural communities in the United States; and
            (6) make such recommendations to Congress as the Task Force 
        determines on agricultural competition issues.
    (d) Working Group.--
            (1) In general.--The Task Force shall establish a working 
        group on buyer power to--
                    (A) study the effects of concentration, monopsony, 
                and oligopsony in agriculture, make recommendations to 
                the Assistant Attorney General and the Chairman, and 
                assist the Assistant Attorney General and the Chairman 
                in drafting agricultural guidelines under section 6(b); 
                and
                    (B) select certain agricultural mergers and 
                acquisitions that were consummated within the past 10 
                years, review the effects of such mergers and 
                acquisitions on competition in agricultural commodities 
                markets, and make recommendations to the Assistant 
                Attorney General, the Chairman, and the Secretary.
            (2) Members.--The working group shall include any member of 
        the Task Force selected under subsection (b)(8).
    (e) Meetings.--
            (1) First meeting.--The Task Force shall hold its initial 
        meeting not later than the later of--
                    (A) 90 days after the date of enactment of this 
                Act; and
                    (B) 30 days after the date of enactment of an Act 
                making appropriations to carry out this section.
            (2) Minimum number.--The Task Force shall meet not less 
        than 3 times each year, at the call of the chairperson.
    (f) Compensation.--
            (1) In general.--The members of the Task Force shall serve 
        without compensation.
            (2) Travel expenses.--Members of the Task Force shall 
        receive travel expenses, including per diem in lieu of 
        subsistence, in accordance with subchapter I of chapter 57 of 
        title 5, United States Code.
    (g) Staff of Task Force; Experts and Consultants.--
            (1) Staff.--
                    (A) Appointment.--The chairperson of the Task Force 
                may, without regard to the provisions of chapter 51 of 
                title 5 of the United States Code (relating to 
                appointments in the competitive service), appoint and 
                terminate an executive director and such other staff as 
                are necessary to enable the Task Force to perform its 
                duties. The appointment of an executive director shall 
                be subject to approval by the Task Force.
                    (B) Compensation.--The chairperson of the Task 
                Force may fix the compensation of the executive 
                director and other staff without regard to the 
                provisions of chapter 51 and subchapter III of chapter 
                53 of title 5 of the 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 staff may not exceed the rate of 
                basic pay payable for level V of the Executive Schedule 
                under section 5315 of title 5 United States Code, as in 
                effect from time to time.
            (2) Experts and consultants.--The Task Force may procure 
        temporary and intermittent services of experts and consultants 
        in accordance with section 3109(b) of title 5, United States 
        Code.
    (h) Powers of the Task Force.--
            (1) Hearings and meetings.--The Task Force, or a member of 
        the Task Force if authorized by the Task Force, may hold such 
        hearings, sit and act at such time and places, take such 
        testimony, receive such evidence, and administer such oaths or 
        affirmations as the Task Force considers to be appropriate.
            (2) Official data.--The Task Force may obtain directly from 
        any executive agency (as defined in section 105 of title 5 of 
        the United States Code) or court information necessary to 
        enable it to carry out its duties under this section. On the 
        request of the chairperson of the Task Force, and consistent 
        with any other law, the head of an executive agency or of a 
        Federal court shall provide such information to the Task Force.
            (3) Facilities and support services.--The Administrator of 
        General Services shall provide to the Task Force on a 
        reimbursable basis such facilities and support services as the 
        Task Force may request. On request of the Task Force, the head 
        of an executive agency may make any of the facilities or 
        services of such agency available to the Task Force, on a 
        reimbursable or nonreimbursable basis, to assist the Task Force 
        in carrying out its duties under this section.
            (4) Expenditures and contracts.--The Task Force or, on 
        authorization of the Task Force, a member of the Task Force may 
        make expenditures and enter into contracts for the procurement 
        of such supplies, services, and property as the Task Force or 
        such member considers to be appropriate for the purpose of 
        carrying out the duties of the Task Force. Such expenditures 
        and contracts may be made only to such extent or in such 
        amounts as are provided in advance in appropriation Acts.
            (5) Mails.--The Task Force may use the United States mails 
        in the same manner and under the same conditions as other 
        departments and agencies of the United States.
            (6) Gifts, bequests, and devises.--The Task Force may 
        accept, use, and dispose of gifts, bequests, or devises of 
        services or property, both real and personal, for the purpose 
        of aiding or facilitating the work of the Task Force. Gifts, 
        bequests, or devises of money and proceeds from sales of other 
        property received as gifts, bequests, or devises shall be 
        deposited in the Treasury and shall be available for 
        disbursement upon order of the Task Force.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $1,000,000 for each of fiscal 
years 2008, 2009, and 2010.

SEC. 5. AUTHORIZATION FOR ADDITIONAL STAFF AND FUNDING.

    There are authorized to be appropriated such sums as are necessary 
to hire additional employees (including agricultural law and economics 
experts) for the Transportation, Energy, and Agriculture Section of the 
Antitrust Division of the Department of Justice, to enhance the review 
of agricultural transactions and monitor, investigate, and prosecute 
unfair and deceptive practices in the agricultural industry.

SEC. 6. ENSURING FULL AND FREE COMPETITION IN AGRICULTURE.

    (a) Burden of Proof.--Section 7 of the Clayton Act (15 U.S.C. 18) 
is amended by adding at the end the following:
    ``In this paragraph, the term `covered civil action' means a civil 
action brought against any person for violating this section in which 
the plaintiff alleges that the effect of a merger, acquisition, or 
other transaction affecting commerce may be to substantially lessen 
competition, or to tend to create a monopoly, in the business of 
procuring agricultural products from, or selling products to, 
agricultural producers in one or more geographic areas, and establishes 
that a merger, acquisition, or transaction is between or involves 
persons competing in the business of procuring agricultural products 
from, or selling products to, agricultural producers. In any covered 
civil action--
                    ``(A) if the plaintiff is the Federal Government or 
                a State government, the burden of proof shall be on the 
                defendant or defendants to establish by a preponderance 
                of the evidence that the merger, acquisition, or 
                transaction at issue will not--
                            ``(i) substantially lessen competition; or
                            ``(ii) tend to create a monopoly in 1 or 
                        more geographic markets; and
                    ``(B) for any other plaintiff, if the plaintiff 
                demonstrates that the parties to the merger, 
                acquisition, or other transaction have a combined 
                market share of not less than 20 percent in any 
                relevant market, the burden of proof shall be on the 
                defendant or defendants to establish by a preponderance 
                of the evidence that the merger, acquisition, or 
                transaction at issue will not--
                            ``(i) substantially lessen competition; or
                            ``(ii) tend to create a monopoly in 1 or 
                        more geographic markets.''.
    (b) Agricultural Guidelines.--
            (1) Findings.--Congress finds the following:
                    (A) The effective enforcement of the antitrust laws 
                in agriculture requires that the antitrust enforcement 
                agencies have guidelines with respect to mergers and 
                other anticompetitive conduct that are properly adapted 
                to the special circumstances of agricultural commodity 
                markets.
                    (B) There has been a substantial increase in 
                concentration in the markets in which agricultural 
                commodities are sold, with the result that buyers of 
                agricultural commodities often possess regional 
                dominance in the form of oligopsony or monopsony 
                relative to sellers of such commodities. A substantial 
                part of this increase in market concentration is the 
                direct result of mergers and acquisitions that the 
                antitrust enforcement agencies did not challenge, in 
                large part because of the lack of appropriate 
                guidelines identifying particular structural 
                characteristics in the agricultural industry and the 
                adverse competitive effects that such acquisitions and 
                mergers would create.
                    (C) The cost of transportation, impact on quality, 
                and delay in sales of agricultural commodities if they 
                are to be transported to more distant buyers result in 
                narrow geographic markets with respect to buyer power.
                    (D) Buyers have no economic incentive to bid up the 
                price of agricultural commodities in the absence of 
                effective competition. Further, the nature of buying 
                makes it feasible for larger numbers of buyers to 
                engage in tacit or overt collusion to restrain price 
                competition.
                    (E) Buyers with oligopsonistic or monopsonistic 
                power have incentives to engage in unfair, exploitive, 
                discriminatory, and exclusionary acts that cause 
                producers of agricultural commodities to receive less 
                than a competitive price for their goods, transfer 
                economic risks to sellers without reasonable 
                compensation, and exclude sellers from access to the 
                market.
                    (F) Markets for agricultural commodities often 
                involve contexts in which many producers have 
                relatively limited information and no bargaining power 
                with respect to the sale of their commodities. These 
                conditions invite buyers with significant 
                oligopsonistic or monopsonistic power to exercise that 
                power in ways that involve discrimination, 
                exploitation, and undue differentiation among sellers.
                    (G) Some Federal courts have incorrectly required a 
                plaintiff to show harm to competition generally, in 
                addition to harm to the producer of agricultural 
                commodities when making a determination that an unfair, 
                unjustly discriminatory, deceptive, or preferential act 
                exists. Those same courts have also incorrectly held 
                that it is a complete defense if a defendant can show 
                any nonharmful justification for an act or practice, 
                even though such conduct was not essential to the 
                business activities of the defendant or there were less 
                harmful ways to achieve a reasonably comparable result 
                with respect to the legitimate and necessary interests 
                of the defendant.
            (2) Issuance of guidelines.--The Assistant Attorney General 
        and the Chairman, in consultation with the Special Counsel, 
        shall issue agricultural guidelines informed and guided by the 
        findings under paragraph (1) that--
                    (A) facilitate a fair, open, accessible, 
                transparent, and efficient market system for 
                agricultural products;
                    (B) reflect the national public interest in 
                preserving a substantial and diverse family farm and 
                ranch sector;
                    (C) recognize that increasing competition in the 
                purchase of agricultural products by highly 
                concentrated firms from a sector in perfect competition 
                is entirely consistent with the objective of the 
                antitrust laws to protect consumers and enhance 
                consumer benefits from competition; and
                    (D) prevent any merger or acquisition in the 
                agricultural industry, if the effect of that merger or 
                acquisition may be to substantially lessen competition 
                or tend to create a monopoly.
            (3) Contents.--The agricultural guidelines issued under 
        paragraph (2) shall consist of merger guidelines relating to 
        existing and potential competition and vertical integration 
        that--
                    (A) establish appropriate methodologies for 
                determining the geographic and product markets for 
                mergers affecting agricultural commodity markets;
                    (B) establish thresholds of increased concentration 
                that raise a presumption that the merger will have an 
                adverse effect on competition in the affected 
                agricultural commodities markets;
                    (C) identify potential adverse competitive effects 
                of mergers in agricultural commodities markets in a 
                nonexclusive manner; and
                    (D) identify the factors that would permit an 
                enforcement agency to determine when a merger in the 
                agricultural commodities market might avoid liability 
                because it is not likely to have an adverse effect on 
                competition.
    (c) Agriculture Competition Task Force Working Group on Buying 
Power.--In issuing agricultural guidelines under this section, the 
Chairman and the Assistant Attorney General shall consult with the 
working group on buyer power of the Task Force established under 
section 4(d) and shall incorporate and implement the recommendations of 
that working group.
    (d) Completion.--Not later than 1 year after the date of enactment 
of this Act, the Chairman and the Assistant Attorney General shall 
issue agricultural guidelines under this section.
    (e) Report.--Not later than 1 year after the date of enactment of 
this Act, the Chairman and the Assistant Attorney General shall jointly 
submit a report to the Committee on the Judiciary of the Senate and the 
Committee on the Judiciary of the House of Representatives regarding 
the issuing of agricultural guidelines under this section.

SEC. 7. POST-MERGER REVIEW OF AGRICULTURAL TRANSACTIONS.

    (a) In General.--Not later than 5 years after the date of a covered 
merger or acquisition, the Assistant Attorney General or the Chairman, 
as the case may be, shall conduct a post-merger review to determine 
whether the effect of that covered merger or acquisition tended to 
substantially reduce competition in the agricultural industry.
    (b) Sharing of Results.--The Assistant Attorney General or the 
Chairman shall submit the results of any post-merger review under 
subsection (a) to the Task Force, for its consideration in examining 
problems in agricultural competition.
    (c) Definition.--In this section, the term ``covered merger or 
acquisition'' means a merger or acquisition--
            (1) in the agricultural industry;
            (2) that is subject to the notification requirements under 
        section 7A of the Clayton Act (15 U.S.C. 18a);
            (3) for which the Assistant Attorney General or the 
        Chairman, as the case may be, required the submission of 
        additional information or documentary material under section 
        7A(e)(1)(A) of the Clayton Act (15 U.S.C. 18a(e)(1)(A)); and
            (4) for which, after review under that section, the 
        Assistant Attorney General or the Chairman, as the case may 
        be--
                    (A) did not institute a proceeding or action under 
                the antitrust laws; or
                    (B) instituted a proceeding or action under the 
                antitrust laws that was resolved through a settlement 
                agreement or consent decree.

SEC. 8. SPECIAL COUNSEL FOR COMPETITION MATTERS.

    (a) In General.--There is established within the Department of 
Agriculture the Office of Competition and Fair Practices, headed by a 
Special Counsel for Competition Matters.
    (b) Duties.--The Special Counsel shall--
            (1) analyze mergers within the food and agricultural 
        sectors, in consultation with the Chief Economist of the 
        Department of Agriculture, the Assistant Attorney General, and 
        the Chairman, as required under section 9; and
            (2) investigate and prosecute violations of the Packers and 
        Stockyards Act, 1921 (7 U.S.C. 181 et seq.).
    (c) Authorization for Additional Staff and Funding.--
            (1) Additional staff.--The Special Counsel shall hire 
        sufficient employees (including antitrust and litigation 
        attorneys, economists, and investigators) to appropriately 
        carry out the responsibilities of the Office of Competition and 
        Fair Practices under this Act.
            (2) Authorization.--There are authorized to be appropriated 
        such sums as are necessary to carry out paragraph (1).

SEC. 9. AGRIBUSINESS MERGER REVIEW AND ENFORCEMENT BY THE DEPARTMENT OF 
              AGRICULTURE.

    (a) Notice.--The Assistant Attorney General or the Commissioner, as 
appropriate, shall notify the Secretary of any filing under section 7A 
of the Clayton Act (15 U.S.C. 18a) involving a merger or acquisition in 
the agricultural industry, and shall give the Secretary the opportunity 
to participate in the review proceedings.
    (b) Review.--
            (1) In general.--After receiving notice of a merger or 
        acquisition under subsection (a), the Secretary may submit to 
        the Assistant Attorney General or the Commissioner, as 
        appropriate, and publish the comments of the Secretary 
        regarding that merger or acquisition, including a determination 
        regarding whether the merger or acquisition may have a 
        substantial adverse impact on rural communities or the family 
        farm and ranch sector, such that further review by the 
        Assistant Attorney General or the Commissioner, as appropriate, 
        is warranted.
            (2) Second requests.--For any merger or acquisition 
        described in subsection (a), if the Assistant Attorney General 
        or the Chairman, as the case may be, requires the submission of 
        additional information or documentary material under section 
        7A(e)(1)(A) of the Clayton Act (15 U.S.C. 18a(e)(1)(A))--
                    (A) copies of any materials provided in response to 
                such a request shall be made available to the 
                Secretary; and
                    (B) the Secretary--
                            (i) shall submit to the Assistant Attorney 
                        General or the Chairman such additional 
                        comments as the Secretary determines 
                        appropriate; and
                            (ii) shall publish a summary of any 
                        comments submitted under clause (i).
    (c) Report.--
            (1) In general.--The Secretary shall submit an annual 
        report to Congress regarding the review of mergers and 
        acquisitions described in subsection (a).
            (2) Contents.--Each report submitted under paragraph (1) 
        shall provide a description of each merger or acquisition 
        described in subsection (a) that was reviewed by the Secretary 
        during the year before the date that report is submitted, 
        including--
                    (A) the name and total resources of each entity 
                involved in that merger or acquisition;
                    (B) a statement of the views of the Secretary 
                regarding the competitive effects of that merger or 
                acquisition on--
                            (i) agricultural markets; and
                            (ii) rural communities and small, 
                        independent producers; and
                    (C) a statement indicating whether the Assistant 
                Attorney General or the Chairman, as the case may be, 
                instituted a proceeding or action under the antitrust 
                laws, and if so, the status of that proceeding or 
                action.

SEC. 10. AUTHORIZATION FOR ADDITIONAL STAFF AND FUNDING FOR THE GRAIN 
              INSPECTION, PACKERS, AND STOCKYARDS ADMINISTRATION.

    There are authorized to be appropriated such sums as are necessary 
to enhance the capability of the Grain Inspection, Packers, and 
Stockyards Administration to monitor, investigate, and pursue the 
competitive implications of structural changes in the meat packing and 
poultry industries by hiring litigating attorneys to allow the Grain 
Inspection, Packers, and Stockyards Administration to more 
comprehensively and effectively pursue its enforcement activities.
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