991122 USA Food Groups Opposed to Ag Merger BanNovember 8, 1999Washington - Nine groups representing an array of food processors are urging U.S. lawmakers to oppose a measure that would temporarily ban large-scale agribusiness mergers, saying a moratorium will only hurt farmers and business owners. “Under the proposed merger moratorium bill, a faltering agribusiness would simply close its doors, leaving employees, farmers and communities to look for other sources of income,” the groups wrote to senators in a letter dated Thursday. “Like farmers who seek to sell their land when they retire, mergers and acquisitions often serve as the retirement plan for small business owners,” they wrote. “Banning such mergers or acquisitions will effectively destroy the financial futures of many small- and mid-sized business owners and their families.” The letter was signed by the American Bakers Association, American Meat Institute, Grocery Manufacturers of America, International Dairy Foods Association, National Association of Manufacturers, National Food Processors Association, National Meat Association, North American Meat Processors and Produce Marketing Association. Sen. Paul Wellstone, a Minnesota Democrat, has proposed a measure that would bar agribusiness mergers and acquisitions if one partner had assets or revenue exceeding $100 million and the other had assets or revenue of $10 million. The moratorium would last for 18 months or until Congress passes new legislation on agribusiness concentration. The Senate is expected to debate the proposal this week, with a vote possible on Tuesday. Some lawmakers and farmers have argued that a rush of mergers in the businesses that buy and process commodities have put farmers at a huge disadvantage, cutting their potential to shop around for the best prices. The issue has gained increasing attention as U.S. farmers have watched their incomes drop for more than a year, due to falling export demand and huge worldwide commodity supplies. At the same time, several high-profile companies have joined forces. Top world grain exporter Cargill Inc.'s acquisition of the grain wing of its closest competitor, Continental Grain Co., became the poster child for farmers opposing consolidation in the industry. Also drawing attention was a September announcement from the nation's largest hog producer, Smithfield Foods, Inc., that it planned to buy rival Murphy Farms, marking the company's third acquisition in less than six months.
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