by Tommy Enright, WFU Communications & Special Projects Coordinator
In recent years, concerns about the lack of competition in the agriculture and food industries have been growing. The concentration of power in the hands of a few large corporations has resulted in limited choices for farmers and artificially inflated costs, impacting everyone from farmers in the field to consumers at the grocery store. However, hope is on the horizon as the U.S. Department of Agriculture (USDA) on July 19th launched the Agricultural Competition partnership, aiming to tackle anticompetitive practices and price gouging. Wisconsin Attorney General Josh Kaul is among the 31 state attorneys general joining forces with federal officials in this critical endeavor.
The primary focus of the Agricultural Competition partnership is to identify market structures and practices that hinder competition among farmers, food processors, farm suppliers, and related industries. By rooting out anticompetitive practices, the initiative seeks to create a level playing field for all stakeholders, promoting fair market competition.
Farmers in Wisconsin and beyond have faced challenges due to the consolidation of suppliers of everything from seeds to inputs to processing. With fewer options, farmers are left with restricted choices and rising input prices that affect their bottom line. The ripple effect extends to consumers who bear the brunt of higher prices when shopping for groceries, which is particularly concerning amid broader economic inflation issues.
Another key aspect of the partnership is its investigation into price gouging and other retail practices that harm consumers. By rooting out such practices, the program aims to protect consumers from unfair pricing and ensure transparency in the market.
Critics may argue that antitrust enforcement is merely shifting responsibility to the states. However, Attorney General Kaul asserts that increased collaboration between federal and state experts will yield better results in addressing the issue. Such cooperation aims for a more comprehensive assessment of competition and consumer issues on the ground.
“Anticompetitive agricultural market structures can artificially raise prices for consumers at grocery stores and for producers,” said Attorney General Kaul. “Through the work of this partnership, we’ll be seeking to increase competition and reduce costs.”
The Agricultural Competition partnership has garnered praise from farm groups, including the National Farmers Union, which launched the Fairness for Farmers campaign two years ago. The campaign urges state and federal officials to enforce existing antitrust laws and restore market power balance between large corporations and farmers. Learn more about the campaign at https://nfu.org/fairness-for-farmers/.
Farmers' bargaining power has significantly diminished due to industry consolidation. With just a few powerful buyers dominating several facets of the industry— be it inputs or processing — farmers find themselves with little influence over the prices they receive. As the old saying goes, “farmers are price takers, not price makers.”
While inputs are often used as an example to show the challenges posed to crop farmers through consolidation, the dairy industry faces similar challenges, with large processing plants vulnerable to workforce shortages, hampering efficient operations and even leading to milk dumping.
Antitrust enforcement is not merely about protecting individual farmers; it fosters a resilient and diverse agricultural ecosystem. By promoting fair competition and preventing monopolistic practices, smaller players can flourish, and local businesses can better compete with “the big guys.”
Wisconsin Farmers Union members have deemed Concentration in the Agriculture Industry a Special Order of Business numerous times over the last decade, noting “a decline in the vitality of rural communities has coincided with this concentration in agricultural and retail food markets, with family farms bearing the brunt of this injustice.” We are proud to see Kaul’s office stepping up and into the fray.
The launch of the Agricultural Competition partnership marks a significant step forward in addressing the lack of competition in agriculture and food industries. By empowering state officials and collaborating with federal experts, this initiative will hopefully help restore fairness and balance. A more equitable and thriving agricultural sector begins with ensuring fair competition and safeguarding consumer interests through antitrust enforcement.