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Farm Consolidation Said Dangerous

September 8, 1999

CEDAR RAPIDS, Iowa (AP) _ Sweeping changes in agriculture in recent years _ with rising numbers of mergers creating giant agribusiness conglomerates _ pose the greatest threat to farmers and consumers in this century, top farm experts warned.

Iowa State University economist Neil Harl said not only do high-profile mergers cut into competition in the farm economy, they place keys to evolving technologies in the hands of fewer and fewer players.

``The outcome would be a smaller share of the revenue from production going to the producer,″ Harl said Tuesday.

Harl, contacted by telephone, was among those testifying at a special hearing called by Sen. Tom Harkin, D-Iowa, and Sen. Charles Grassley, R-Iowa, to discuss a trend toward increasing concentration in many sectors of the farm economy.

Farmers complain of being crushed by market-manipulating corporations. They argue that U.S. Agriculture and Justice Department officials give lip service to preventing monopolies but continue to approve mergers.

``The Justice Department has been blowing a lot of smoke the last six or seven years,″ said farmer Larry Ginther of Marshall County in central Iowa.

The Justice Department’s top antitrust attorney, Joel Klein, said his agency is trying to be responsive.

``Your issues are front and center at the Department of Justice,″ said Klein, who spearheaded the government’s antitrust case against Microsoft. ``You have to analyze each merger to see whether it is helpful or harmful. If we start to overreact, we are going to do more harm than good.″

Mike Dunn, U.S. Department of Agriculture undersecretary for marketing and regulatory programs, said his agency is pushing Congress for laws forcing meat packers to disclose prices they are paying for animals.

``There has to be real teeth in the law,″ Dunn said.

Dunn argued that the USDA pushes hard to enforce the Packers and Stockyards Act, which oversees the meat industry but lacks the authority to regulate prices strictly.

``We do not have blanket authority to declare something unfair,″ Dunn said.

Harkin said he likely would favor toughening federal antitrust laws.

``We’ve got to make some changes in the legislation,″ he said.

The hearing comes at a time when producers face historic low prices for commodities and emotions are running high. The economic squeeze threatens to force thousands of farmers from their land.

Hundreds of activists jammed a community college gymnasium for the hearing, cheering and leaping to their feet as one after another argued that big business is taking advantage of family farmers.

There was a bipartisan tinge to the conference. Grassley, a conservative Republican, said all sides worry about rapidly consolidating agribusinesses.

``Obviously this is a difficult time for farmers,″ Grassley said. ``We agree on one thing _ that concentration is having a detrimental effect on farmers.″

Sen. Paul Wellstone, D-Minn., went a step further, saying there should be an end to mergers and consolidations among agribusinesses while lawmakers study revisions to antitrust laws.

``I’m calling for a moratorium on mergers and acquisitions,″ Wellstone said. ``On the present course, we’re going to lose a whole generation of producers.″

Drawing much attention at Tuesday’s session was a merger announced last week in which Smithfield Foods Inc., of Smithfield, Va., a major meat processor, acquired Murphy Family Farms, a giant hog producer with many operations in Iowa.

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