Administration Turns Eye Toward Big Agribusiness Top Obama administration officials launch a series of workshops Friday delving into agriculture antitrust issues. Some big agribusiness firms say the forums will showcase a well-functioning, free market, but some producers think the probe will expose a system increasingly hostile to traditional family farms.
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Administration Turns Eye Toward Big Agribusiness

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Administration Turns Eye Toward Big Agribusiness

Administration Turns Eye Toward Big Agribusiness

Administration Turns Eye Toward Big Agribusiness

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A deepening divide between big agribusiness firms and family farms will be on display Friday when the Obama administration launches a series of workshops probing antitrust issues in agriculture. Big firms say the forums will show a well-functioning market, but some some producers hope the meetings will expose a system increasingly hostile to family farms.

Jim Foster with his old open-air hog barns in Montgomery County, Mo., will be in Ankney, Iowa, for those sessions, and he is one of the producers looking for change. "Bought this place in '63 when I got out of college and got married, been here ever since," Foster said.

It hasn't been easy keeping this rambling operation together. Big packing companies took over most pork production years ago. That drove down prices and drove most of Foster's neighbors out of the industry.

Twenty-five years ago, Montgomery County had about 200 independent hog farmers. Foster is one of two now. He's got just one steady buyer for his hogs.

Meanwhile, companies that sell Foster supplies have grown just as powerful, as are the ones he depends on to buy his livestock. That leaves Foster trapped between giants — a situation he blames on "hands off" economic policy.

"The biggest boar at the trough needs to win no matter who he lashes out with his tusks and kills, 'cause the biggest company left standing will be efficient, and that efficiency will move down to the consumer," Foster says. "That's hogwash. That doesn't work. We found out from the banks that it doesn't work that way. They keep that efficiency in their pocket."

Foster thinks the workshops mark a sharp turn in thinking. He's not the only one.

"It indicates that the federal government, for the first time in a very long time, is willing to look at this problem area," says Neil Harl, professor emeritus at Iowa State University.

For 30 years he's been pointing out what he calls the "towering concentration" in agribusiness. He's found an ally in Justice Department antitrust chief Christine Varney.

"Farmers are more and more facing very difficult day-to-day issues of surviving economically," Varney says. "I'm very interested in looking at the factors that contribute to that difficulty."

The Justice Department and at least seven state attorneys general are investigating Monsanto, the world's largest seed company. They're looking into whether Monsanto used its patented "Roundup Ready" gene to kill off competition and boost prices.

"We believe an objective review of the agriculture sector will reveal that competition is alive and flourishing," says Lee Quarles a spokesman for Monsanto.

Quarles says farmers wouldn't buy its seeds if they didn't work.

But something is killing family farms. About 80,000 midsized operations disappeared just in the past five years.

Secretary of Agriculture Tom Vilsack says he wants to know just how much consolidation in agribusiness contributes to that decline.

"When agribusiness purchasing power is reduced to a small number of companies, does that create such an unlevel playing field that it compels those in the middle to either get bigger or get out?" Vilsack asked.

At his farm, Foster enjoys his grandchildren but worries whether they'll have a future in agriculture. That's why he's going to testify at the workshop in Ankeny.

"I'm not interested in one guy farming our whole county," Foster says. "I'm interested in a lot of young families with swing sets in the backyard, raising kids. That's what it's all about."

Foster thinks there's a better-than-even chance the meetings may rebalance the marketplace and give midsized operations like his a little more clout.

"You have to be optimistic," Foster says. But he adds that decades from now he doesn't want have to explain that back in 2010, he didn't even try to save the family farm.