Food Business News - July 20, 2021 - 18

Biden administration targets ag
in effort to promote competition
The proportion of dollars
spent on food reaching
farmers and ranchers has
been falling for decades.
©JJ GOUIN - STOCK.ADOBE.COM
WASHINGTON - Agriculture, together with the
labor, health care and technology sectors,
will be subject to heightened enforcement
challenging industry consolidation and anti-competitive
behavior, according to a July
9 announcement from the White House.
The statement was issued ahead of
President Joe Biden's signing of an executive
order " to promote competition, " in
a bid to lower prices for families, increase
wages for workers and promote innovation
and increased economic growth.
In more than 75% of US industries,
" a smaller number of large companies
control more of the business " than was the
case 20 years ago, the White House said.
The Biden administration said the
increased concentration has resulted in
higher prices for consumers with gross
margins tripling during the 20-year period.
Similarly, the announcement blamed
less competition for driving down wages
for workers.
" In total, higher prices and lower
wages caused by lack of competition are
now estimated to cost the median American
household $5,000 per year, " the White
House said.
Speaking at the White House before
signing the executive order, Mr. Biden
said, " The heart of American capitalism
is a simple idea - open and fair competition. "
" Competition
keeps the economy
moving and keeps it growing, " he continued.
" Fair competition is the reason
capitalism has been the greatest force for
prosperity and growth. "
18
Food Business News
The executive order will launch
a government-wide effort to promote
competition.
" The order includes 72 initiatives
by more than a dozen federal agencies to
promptly tackle some of the most pressing
competition programs across our economy, "
the Biden administration said.
Suppliers of farm equipment and
agricultural inputs for growers were highlighted
in the announcement.
" Over the past few decades, key
agricultural markets have become more
concentrated and less competitive, " the
administration said. " The markets for
seeds, equipment, feed and fertilizer are
now dominated by just a few large companies,
meaning family farmers and ranchers
now have to pay more for these inputs. For
example, just four companies control most
of the world's seeds, and corn seed prices
have gone up as much as 30% annually. "
Rising seed costs have meant growers
are keeping a smaller percentage of sales
than in the past.
" For example, four large meat-packing
companies dominate over 80% of the
beef market, and, over the last five years,
farmers' share of the price of beef has
dropped by more than a quarter - from
51.5% to 37.3% - while the price of beef
has risen, " the Biden administration said.
The proportion of dollars spent on
food reaching farmers and ranchers has
been falling for decades.
" In short, family farmers and ranchers
are getting less, consumers are paying
more, and the big conglomerates in the
middle are taking the difference, " the
administration said. " Meanwhile, the law
designed to combat these abuses - the
Packers and Stockyards Act - was systematically
weakened by the Trump administration
Department of Agriculture. "
Foreign companies also are squeezing
US farmers and ranchers, the Biden administration
said. As an example, the administration
said most meat sold domestically
as " Product of USA " often is raised overseas
and then sliced in the United States.
" Corporate consolidation even
affects farmers' ability to repair their own
equipment or to use independent repair
shops, " the administration said. " Powerful
equipment manufacturers - such as tractor
manufacturers - use proprietary repair
tools, software and diagnostics to prevent
third parties from performing repairs. For
example, when certain tractors detect a
failure, they cease to operate until a dealer
unlocks them. That forces farmers to pay
dealer rates for repairs that they could have
made themselves, or that an independent
repair shop could have done more cheaply. "
The order directs the US Department
of Agriculture to develop a plan to
" increase opportunities for farmers to
access markets and receive a fair return,
including supporting alternative food
distribution systems like farmers markets
and developing standards and labels so
that consumers can choose to buy products
that treat farmers fairly. "
The USDA also has been directed to
issue new rules establishing when meat
can carry " Product of USA " labels and
to make it easier for farmers to " bring
and win claims " under the Packers and
Stockyards Act, related to how farmers
are paid to protect them from retaliation
when famers " speak out about bad
practices. "
Neither the grain storage and handling
nor the milling/processing sectors
were specifically identified for action in
the White House announcement.
" I'm a proud capitalist, " Mr. Biden
said in his remarks. " I spent most of my
career representing the corporate state of
Delaware. I know America can't succeed
unless American business succeeds. But
let me be clear; capitalism without competition
isn't capitalism. It's exploitation. " FBN
July 20, 2021

Food Business News - July 20, 2021

Table of Contents for the Digital Edition of Food Business News - July 20, 2021

Food Business News - July 20, 2021 - Intro
Food Business News - July 20, 2021 - 1
Food Business News - July 20, 2021 - 2
Food Business News - July 20, 2021 - 3
Food Business News - July 20, 2021 - 4
Food Business News - July 20, 2021 - 5
Food Business News - July 20, 2021 - 6
Food Business News - July 20, 2021 - 7
Food Business News - July 20, 2021 - 8
Food Business News - July 20, 2021 - 9
Food Business News - July 20, 2021 - 10
Food Business News - July 20, 2021 - 11
Food Business News - July 20, 2021 - 12
Food Business News - July 20, 2021 - 13
Food Business News - July 20, 2021 - 14
Food Business News - July 20, 2021 - 15
Food Business News - July 20, 2021 - 16
Food Business News - July 20, 2021 - 17
Food Business News - July 20, 2021 - 18
Food Business News - July 20, 2021 - 19
Food Business News - July 20, 2021 - 20
Food Business News - July 20, 2021 - 21
Food Business News - July 20, 2021 - 22
Food Business News - July 20, 2021 - 23
Food Business News - July 20, 2021 - 24
Food Business News - July 20, 2021 - 25
Food Business News - July 20, 2021 - 26
Food Business News - July 20, 2021 - 27
Food Business News - July 20, 2021 - 28
Food Business News - July 20, 2021 - 29
Food Business News - July 20, 2021 - 30
Food Business News - July 20, 2021 - 31
Food Business News - July 20, 2021 - 32
Food Business News - July 20, 2021 - 33
Food Business News - July 20, 2021 - 34
Food Business News - July 20, 2021 - 35
Food Business News - July 20, 2021 - 36
Food Business News - July 20, 2021 - 37
Food Business News - July 20, 2021 - 38
Food Business News - July 20, 2021 - 39
Food Business News - July 20, 2021 - 40
Food Business News - July 20, 2021 - 41
Food Business News - July 20, 2021 - 42
Food Business News - July 20, 2021 - 43
Food Business News - July 20, 2021 - 44
Food Business News - July 20, 2021 - 45
Food Business News - July 20, 2021 - 46
Food Business News - July 20, 2021 - 47
Food Business News - July 20, 2021 - 48
Food Business News - July 20, 2021 - 49
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Food Business News - July 20, 2021 - 60
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Food Business News - July 20, 2021 - 66
Food Business News - July 20, 2021 - 67
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Food Business News - July 20, 2021 - 80
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