News Analysis: Justice Dept Looks at Agri-Businesses

For years, many environmentalists, independent farmers and organic consumers have looked at large agribusinesses as the un-jolly anti-green giants. While not using such terms, of course, the Obama administration is taking a critical look at whether companies like Monsanto have violated monopoly laws in an increasingly concentrated business sector. This week I'm joined by Jennifer Szweda Jordan, who follows food and the environment issues in our Earth's Bounty series.

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OPEN: For years, many environmentalists, independent farmers and organic consumers have looked at large agribusinesses as the un-jolly anti-green giants. While not using such terms, of course, the Obama administration is taking a critical look at whether big ag companies like Monsanto have violated antitrust laws in the increasingly consolidated business of farming. This week I'm joined by Jennifer Szweda Jordan. She follows food and the environment issues in our Earth's Bounty series. And sheís here to discuss what's prompted the Justice and Agriculture departments' public hearings on legal issues and competition in agriculture.

Why have these agribusinesses been the brunt of criticism?

JORDAN: One of the big mantras in the food world, and really all environmental circles in recent years, has been "going local." There's this idea that we should get off the national energy grid, buy locally made products, and buy food grown near our homes to cut down on fuel used for shipping and to support businesses within our communities. It's a reaction to many businesses becoming more consolidated. That's been the case in farming, especially over the last 50 or so years.

CRAIG: Tell me about why this occurred and the extent of the consolidation.

JORDAN: For example, here in Pennsylvania, in the 1960s, there were as many as 300 on-farm milk bottling plants. Over the years, it became less profitable to be a small farmer. This was national policy. Agriculture Secretaries were instructing farmers nationwide to quote ñ "get big or get out" ñ and "adapt or die." So many pieces of farmland were sold. Associated infrastructure like equipment mechanics and feed and general farm stores went out of business, too. And today, there are fewer than 20 or 30 milk bottling plants in our state. There are several states in which there is total consolidation. Some processors control an entire state's milk production. The meat industry has gone the same way ñ there aren't many slaughterhouses in Pennsylvania for smaller farmers to use.

CRAIG: So the focus is really on market competition ñ but there are environmental implications as well, aren't there?

JORDAN: Yes. Larger cattle farms mean there are more concentrated amounts of manure. This can contaminate water supplies if not handled properly, or manure has to be trucked elsewhere. And feed has to be shipped in, whereas on a smaller farm, cows can eat in a pasture. There's also been criticism over the years on the environmental impacts of growth hormones that are still used on a significant number of cows to increase dairy production.

CRAIG: I understand dairy is one of three issues Justice and Ag will be looking at in the hearings.

JORDAN: Right ñ seeds and meat-packing are the others. And seeds are a big issue particularly concerning the company Monsanto. Now environmentalists view one of Monsanto's most profitable products ñ Roundup -- as one of the most toxic herbicides. There are claims of links to various types of cancers. Roundup works in conjunction with another controversial product ñ Roundup Ready seeds. These are seeds for plants like corn. They've been genetically modified to have a resistance to Roundup ñ in other words, the corn would continue to grow when sprayed, while the weeds around it are killed. There are many complaints about Monsanto's seeds. One being the fact that they're designed not to reproduce, so farmers have to continually buy from the company. And some people say that producing genetically modified organisms or GMOs can have unknown consequences. But the focus in terms of antitrust law is that critics say
Monsanto owns up to 90 percent of the seed market in some areas. The company denies that.

CRAIG: And I know Monsanto calls itself a sustainable business ñ one that improves plant yields.

JORDAN: Yes, they say that through technology, they "help farmers around the world produce more while conserving more" and producing healthier foods while reducing ag's impact on the environment. And of course many farmers love their products ñ they're way ahead of the competition in what they offer farmers. But the issue is whether they control too much of the market. Now, Roundup sales have dropped. And to make up profits, the company's projecting a 43 percent price increase in seeds and there are farmers who are hooked.

CRAIG: So the Justice and Ag Departments didnít specifically mention Monsanto, but the announcement about these public hearings was made in St. Louis, where Monsanto is headquartered. Industry watchers think that's significant.

JORDAN: They do.

CRAIG: What's Monsanto's response?

JORDAN: None, really. I'd like to share a clip from MSNBC's Mad Money on this topic. Jim Cramer is the Money Manager and he's been a fan of Monsanto. But not how the company's handling the possibility of Justice cracking down on antitrust violations.

CRAMER: These guys are begging the Justice dept to come after them. Or it's as if Monsanto hasn't realized that antitrust is no longer being run by the commerce department. That ended when Obama took over from Bush. I think Monsanto might be in a tough spot here.

JORDAN: Cramer's one of many government watchers saying that the Obama administration is going to use antitrust law much more aggressively.

CRAIG: Now, just a few more details about these workshops or hearings -- they're using these names interchangeably. Let's talk logistics.

JORDAN: They start next year ñ at a time to be determined. Written comments have a deadline of the end of this year. And they're seeking comments from farmers, ranchers, consumer groups -- really anybody to take a look at --quote-- "the appropriate role for antitrust and regulatory enforcement" in the ag industry. We'll have links at alleghenyfront.org on the Justice announcement that lists details on submitting comments and where to check for the hearing schedules.