[Congressional Record Volume 146, Number 31 (Monday, March 20, 2000)]
[Senate]
[Pages S1463-S1464]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY:
  S. 2252. A bill to provide for the review of agriculture mergers and 
acquisitions by the Department of Agriculture and to outlaw unfair 
practices in the agriculture industry, and for other purposes; to the 
Committee on the Judiciary.


              The Agriculture Competition Enhancement Act

  Mr. GRASSLEY. Mr. President, as most of my colleagues know, 
agriculture is one of the most crucial industries to my State, Iowa. 
The small, independent family farmer is a common thread running 
throughout the cultural, economic and social fabric of my State. I 
firmly believe that if that thread is pulled, the entire fabric of Iowa 
could come unraveled.
  All my life I have lived and worked on a farm. I recognize that Iowa 
and the world are changing and that agriculture cannot stagnate and 
stay the same decade after decade. If we are to continue to survive and 
thrive into the 21st century, Iowa must diversify and adapt. But the 
best way to do that is not by throwing away the past and the present. 
The best way to prepare for the future is to build on the best of our 
heritage. And the family farmer is one of the best things about Iowa's 
heritage. I am committed to preserving and supporting this valuable 
member of Iowa's communities.
  Any farmer knows that agriculture is a risky business. If you are 
going to be a farmer, you had better be prepared for ups and downs. But 
farmers feel more vulnerable now than at just about any time I can 
recall and with good reason.
  We all know there's been a so-called ``merger-mania'' going on 
throughout our nation's economy. Large corporations are joining forces 
with other large corporations to form new business giants in every 
sector of the economy and agriculture is no exception.
  In the last couple of years, the AG industry has seen a significant 
number of multi-million and multi-billion dollar mergers affecting 
grain and livestock. In the face of all these mergers and new 
alliances, the independent producer farming a thousand acres or less, 
sees himself getting smaller and smaller in comparison to many of his 
competitors. He sees himself having fewer and fewer choices of who to 
buy from and sell to. Yet, those farmers know, as I do, that the 
independent farmer is one of the most efficient businessmen in our 
nation's economy. That's why the United States can feed itself and a 
good portion of the world. So long as

[[Page S1464]]

the market place is fair and open, the family farmer can compete.
  I am not suggesting that all mergers are in and of themselves wrong 
or unfair to family farmers. Businesses may be in situations where 
their survival and success is dependent on joining forces with another. 
That right is a fundamental principle of a capitalist system and has to 
be preserved. Indeed, I believe that farmers do not need to be 
protected from the marketplace. But I believe we should protect their 
access to the marketplace.
  That is why I will be introducing legislation to guarantee greater 
openness and accountability to the merger review process as it pertains 
to agri-business.
  My bill will give USDA, the Federal department with the background 
and expertise in agriculture, a more prominent role in assessing AG 
mergers. Furthermore, my bill will provide a much-needed balance in the 
focus of AG merger reviews.
  Currently, when the Department of Justice assesses a proposed merger, 
their focus is weighted towards the impact a merger would have on 
consumers. No one, certainly not I, would argue against ensuring that a 
merger does not harm consumers. However, given the fact that AG 
mergers, more so than other kinds of mergers, impact a way of life, not 
just an industry, it is critical that we give equal importance to the 
effect these mergers have on producers.
  My bill will do just that by requiring USDA to do an assessment of 
how a proposed corporate union will affect producers and their access 
to the market. My bill will keep DOJ in the driver's seat on mergers, 
but will make the expertise and knowledge of USDA a prominent part of 
the merger review record.
  I am aware other proposals reforming the agri-business merger review 
process are being crafted. I am certainly willing to consider all 
suggested reforms. Nonetheless, I believe my bill is strong and 
balanced in several respects. As I mentioned, my bill provides a 
heightened role for USDA in the merger review process, giving producers 
a seat at the table when mergers and acquisitions are being reviewed by 
DOJ or FTC.
  In addition, I would like to highlight the following provisions in my 
bill.
  There is a requirement that USDA do a merger review that focuses on 
the needs of producers and whether the transaction would cause 
substantial harm to farmers' ability to compete in the marketplace. 
This review will be conducted simultaneously with the Hart-Scott-Rodino 
review now done by DOJ. There is no disruption in the current DOJ/FTC 
merger review process. My legislation allows for negotiations between 
USDA and the parties to a proposed merger in order to work out any 
concerns USDA has.
  Under my bill, if USDA's concerns are not satisfied, USDA may 
challenge the merger in court to either stop the merger or impose 
conditions on the transaction.
  Furthermore, this measure calls for the creation of a special counsel 
in USDA for competition matters, which is subject to Senate 
consideration. My bill provides money for additional staff at USDA and 
DOJ.
  This measure also prohibits the enforcement of confidentiality 
clauses in livestock production contracts that prevent producers from 
getting the advice they need to make business decisions in their best 
interests.
  My bill provides contract poultry growers the same protections under 
GIPSA that other livestock producers have.
  Finally, under my bill, the competition protection authorities of 
USDA's packers and stockyards division is extended to include 
anticompetitive practices by dealers, processors and commission 
merchants of all AG commodities.
  Several components of this bill are based on proposals by the 
American Farm Bureau, the largest organization representing producers 
of all commodities.
  I believe that bringing to the table a greater understanding of AG 
producers' needs when examining AG mergers is the biggest missing 
element to make the merger review process as fair as possible. Closing 
this gap is the heart of my proposal.
  I realize that DOJ currently has consultations with USDA on AG 
mergers. But I believe the current process is not consistent or open 
enough to assure producers' their concerns are adequately addressed.
  The approach I advocate will ensure that producers' concerns and 
needs are fully discussed when Federal agencies examine proposed AG 
business mergers. By guaranteeing inclusion and openness for small, 
independent producers, we can go a long way toward alleviating their 
understandable anxiety.
  As my colleagues from rural states know, AG concentration is one of 
the most important issues in agriculture today. It is imperative that 
we make meaningful progress on this issue before this Congress 
adjourns. As I stated earlier, I am aware of other efforts, principally 
by Senator Daschle and Senator Leahy, to craft a legislative response 
to the recent wave of AG mergers.
  I commend them for their hard work and I appreciate their efforts to 
keep me informed of their progress. I did not feel I could offer my 
unreserved endorsement of the proposal they have crafted thus far and I 
have chosen to introduce my own bill.
  However, I believe our proposals are close enough in scope, direction 
and intent that we can achieve a bipartisan compromise sooner rather 
than later. I want it to be clearly understood that it is my desire to 
work with Members from both sides of the aisle to calm farmers' fears 
about high levels of AG concentration.
  I am certain Congress will need to take additional steps to secure 
the freedom of small producers to compete in the marketplace.
  But my bill will assure that when AG mergers are given the necessary 
review, the small, independent family farmer who I am proud to serve, 
will not be left out.
  I urge my colleagues to join me in holding the door open for farmers 
across the country and I ask for the support of all those who want to 
preserve the best of our Nation's agriculture heritage and ensure the 
superiority of U.S. Agriculture for decades to come.
                                 ______