Agriculture Consolidation on Tap
WASHINGTON (AP) _ A hearing on consolidation among agricultural businesses has been scheduled in the Senate, just one day after nearly a dozen senators called for congressional review of the effects of a planned merger between the nation’s two largest grain companies.
Sen. Dick Lugar, R-Ind., chairman of the Agriculture Committee, said Friday he had scheduled a hearing for Jan. 26.
``Consolidation of agricultural businesses is a growing trend that should be examined,″ Lugar said. ``Recently proposed mergers have raised many questions and generated a great deal of discussion in the media and Congress.″
Lugar has received many comments from colleagues since Minneapolis-based Cargill Inc. said it would buy Continental Grain Co., in a deal worth an estimated $300 million, a spokeswoman said.
The Justice Department, which must approve the merger, is conducting a review.
Many lawmakers and farmer groups have expressed concern that the proposal will hurt farmers.
Even Agriculture Secretary Dan Glickman, while stopping short of opposing the deal, has raised concerns about the ``far-reaching implications″ of the deal, particularly Cargill’s potential control of export sales, U.S. storage facilities, barge capacity and some rail service.
The two companies would control more than 40 percent of all U.S. corn exports, a third of soybeans sold overseas and at least 20 percent of wheat exports, and that’s only counting commodities that are federally inspected. The companies’ total sales could be larger, Glickman has said.
On Thursday, 10 Democratic senators wrote Lugar and asked him to hold a hearing on the deal. Some Republicans, including Sen. Charles Grassley of Iowa, also had urged Lugar to hold a hearing.
``American producers have already been hit by a severely depressed market,″ the Democratic senators wrote. ``The last thing producers need is a further erosion of competitive markets for their grain.″
Lugar spokeswoman Jennifer Cutshall said while the hearing is on consolidation throughout the industry, it would be a forum to discuss the Cargill-Continental deal.