In January, the Justice Department launched a formal antitrust investigation of Monsanto’s genetically modified soybeans. In a follow-up move, on Friday, March 12, the Justice Department held the first of five so-called “workshops” in Ankeny, Iowa, to evaluate complaints about corporate monopoly in the seed, food coupons, livestock and dairy industries by huge monoliths like Monsanto Co., Archer Daniels Midland Co., Dupont, and Tyson Foods Inc.
The remaining four workshops will be held at disclosed locations around the U.S, and will focus on poultry, dairy, livestock and discrepancies between farm and consumer prices.
Friday’s hearings — a standing-room-only gathering attended by farmers, academics, slaughterhouse workers, lobbyists, executives, corporate officials, labor and consumer groups — centered on Monsanto’s stranglehold on the seed industry and control of genetically engineered seed attributes inserted into virtually all U.S. crops. Farmers rightfully voiced concerns, claiming seed monopoly stifles competition, and has led to skyrocketing seed prices and crop price stagnation.
Four companies now process 80 percent of the beef consumed in the United States; Monsanto has unprecedented control of the corn and soybean market. Their Roundup Ready corn is now planted on nearly 80 percent of the farmland acreage in the U.S., and Monsanto’s soybeans, with their Roundup Ready gene, is in 93 percent of U.S. soybean seeds.
Also in attendance were Attorney General Eric Holder, Agriculture Secretary Tom Vilsack, Assistant Attorney General Christine Varney, and other Department of Justice and USDA officials. Varney recently filed a lawsuit in Milwaukee, Wisconsin, challenging Dean Foods’ 2009 acquisition of Foremost Farms USA’s consumer Products Division.
Government officials pledged an in-depth examination of noncompetitive practices in agriculture that are driving small farmers out of business, and promised to aggressively enforce antitrust laws. But Assistant Attorney General Christine Varney told reporters at the workshop she didn’t want to link her investigations to the workshop itself. “Just becoming more knowledgeable about how an industry works can lead to action,” she said.
According to the Wall Street Journal, Varney said she came up with the idea for the workshops a year ago during her nomination hearings, when Sen. Russ Feingold (D. Wis.) and other farm-state legislators complained the Bush administration permitted a merger wave among agricultural processors that undermined farmers. More than 15,000 people have submitted comments to the Justice Department on the workshops.
“We want everybody to have a fair shot,” said Holder. “Big is not necessarily bad, but big can be bad if power that comes from being big is misused. That is simply not something that this Department of Justice is going to stand for.”
“I’m here to tell you our current price discovery system for finished cattle and hogs is absolutely broken,” said Jim Foster, a hog producer from Montgomery city, Mo. “At least 90 percent of all market ready hogs are on the packer’s doorsteps with little competitive bidding.”
“What farmers need is opportunity that needs to be free of the corporations that control so much of the industry,” said Iowa farmer Ken Fawcett at the forum. “Corporations decide too much.”
American Antitrust Institute Vice President Diana Moss told Reuters there was no question that Monsanto enjoyed a monopoly in the seed business. “It is an inescapable fact,” Moss said, describing what she called an “illusion of choice.”
Monsanto and DuPont are suing each other over a biotech seed license, and both hired former Justice Department lawyers. “Monsanto’s seeds are so ubiquitous that they have become like AT&T’s telephone lines before the company’s 1984 breakup or Microsoft Corp.’s Windows operating system in the 1990s,” said James P. Denvir, an attorney who represents DuPont.
While Monsanto has promised to allow generic versions of its products to emerge, Denvir said he is unconvinced that will happen without government intervention.
Because Monsanto will lose royalties, the company is desperate to lure seedmakers and growers to use the newer Roundup Ready 2 version before the Roundup Ready 1 patent expires in 2014. DuPont suggests Monsanto is using incentives and penalties to switch the industry to the new product to extend their Roundup Ready monopoly.
Here is a DOJ docuement on some of the history behind Monsanto’s rise to power: