990307 U.S. Senators Call for Diligent Review of Ag Mergers

Washington - Nearly two dozen farm state senators asked the Clinton Administration to review further big business consolidation in U.S. agriculture for fear new mergers will further decrease the market share of already-fragile small farmers.

A spate of mergers and acquisitions among the biggest grain and livestock companies is occurring during a record $6 billion Congressional bail-out for U.S. farmers because of slumping commodity prices.

Without improved crop insurance or federal assistance, thousands of farmers might go bankrupt this year.

During the past decade, the four largest U.S. pork packing companies have increased market share from 36% to 54%, with a similar increase in the beef industry. The four biggest flour millers have seen market share soar from 40% to 62% during the same period, the senators said.

“While thousands of farmers are being forced out of agriculture due to collapsed commodity prices, many of our nation's food processors are posting exceptional returns and record profits,” said the letter said from Senator Byron Dorgan, a Democrat from North Dakota.

Senate Democratic Leader Tom Daschle of South Dakota signed the letter, as did 15 other Democrats and six Republicans from Nebraska, Ohio, Wyoming, Vermont and Iowa.

Until a White House interagency task force completes its analysis, antitrust regulators should “exercise particular diligence” in reviewing pending acquisitions such as Cargill Inc's plan to buy the grain unit of Continental Grain, the senators said.

“Because of the urgency of this issue and the extremely fragile economic conditions in agriculture, we would request that this market concentration study be completed within six months and its findings reported to Congress,” said the letter.

Last week, some of the same senators invited U.S. Agriculture Secretary Dan Glickman and the head of the Justice Department's antitrust unit to visit farmers in the upper Midwest.

Cargill, the world's biggest grain company, has appeared before two Congressional subcommittees in the past month to defend its planned acquisition of the Continental unit. The Justice Department is currently reviewing the proposed deal, which the companies said they hope to complete by the end of March.

Some congressional sources have expressed concern that if the estimated $1 billion acquisition is approved, Continental might use the proceeds to strengthen its position in the livestock sector.

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