Food and Agribusiness Merger Moratorium and Antitrust Review Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2933 To impose a moratorium on large agribusiness, food and beverage manufac- turing, and grocery retail mergers, and to establish a commission to review large agriculture, food and beverage manufacturing, and grocery retail mergers, concentration, and market power. IN THE HOUSE OF REPRESENTATIVES MAY 22, 2019 Mr. POCAN (for himself, Ms. DELAURO, Mr. KHANNA, Ms. PINGREE, Mr. RYAN, Mr. BLUMENAUER, and Ms. SCHAKOWSKY) introduced the fol- lowing bill; which was referred to the Committee on Agriculture, and in addition to the Committee on the Judiciary, for a period to be subse- quently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To impose a moratorium on large agribusiness, food and beverage manufacturing, and grocery retail mergers, and to establish a commission to review large agriculture, food and beverage manufacturing, and grocery retail mergers, concentration, and market power. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Food and Agribusiness 4 Merger Moratorium and Antitrust Review Act of 2019’’. 5 VerDate Sep 11 2014 19:59 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2933.IH H2933 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 2933 IH SEC. 2. FINDINGS. 1 Congress finds the following: 2 (1) Concentration in the food and agricultural 3 economy, including mergers, acquisitions, and other 4 combinations and alliances among suppliers, pack- 5 ers, integrators, other food processors, distributors, 6 and retailers has been accelerating at a rapid pace 7 since the 1980s, and particularly since the 2007 8 through 2009 recession. 9 (2) The trend toward greater concentration in 10 food and agriculture has important and far-reaching 11 implications not only for family farmers, but also for 12 food chain workers, the food we eat, the commu- 13 nities we live in, and the integrity of the natural en- 14 vironment upon which we all depend. 15 (3) In the past three decades, the top 4 largest 16 pork packers have seized control of 71 percent of the 17 market, up from 36 percent. Over the same period, 18 the top 4 beef packers have expanded their market 19 share from 32 percent to 85 percent. The top 4 flour 20 millers have increased their market share from 40 21 percent to 64 percent. The market share of the top 22 4 soybean crushers has jumped from 54 percent to 23 79 percent, and the top 4 wet corn processors con- 24 trol of the market has increased from 63 percent to 25 86 percent. 26 VerDate Sep 11 2014 19:59 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2933.IH H2933 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 2933 IH (4) Today the top 4 sheep, poultry, and fluid 1 milk processors now control 57 percent, 53 percent, 2 and 50 percent of the market, respectively. 3 (5) The top 4 grain companies today control as 4 much as 90 percent of the global grain trade. 5 (6) During the past 2 years there has been a 6 wave of consolidation among global seed and crop- 7 chemical firms, 3 companies now control nearly 2⁄3 8 of the world’s commodity crop seeds. Those same 3 9 companies now also control nearly 70 percent of all 10 agricultural chemicals and pesticides. 11 (7) In the United States, the 4 largest corn 12 seed sellers accounted for 85 percent of the market 13 in 2015, up from 60 percent in 2000. Over the past 14 20 years, the cost for an acre’s worth of seeds for 15 an average corn farmer has nearly quadrupled, and 16 the cost of fertilizer has more than doubled. Yet 17 corn yields increased only 36 percent over that time, 18 and the price received for the sale of a bushel of 19 corn increased only 31 percent. 20 (8) A handful of firms dominate the processing 21 of every major commodity. Many of them are 22 vertically integrated, which means that they control 23 successive stages of the food chain, from inputs to 24 production to distribution. The growing number and 25 VerDate Sep 11 2014 19:59 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2933.IH H2933 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 2933 IH scale of cross-border agribusiness and food mergers 1 have put foreign firms, often with considerable gov- 2 ernment backing, into prominent and even dominant 3 positions in the United States beef, hog, poultry, 4 seed, fertilizer, and agrichemical sectors. 5 (9) Growing concentration of the agricultural 6 sector has restricted choices for farmers trying to 7 sell their products. As the bargaining power of agri- 8 business firms over farmers increases, concentrated 9 agricultural commodity markets are stacked against 10 the farmer, with buyers of agricultural commodities 11 often possessing regional dominance in the form of 12 oligopsony or monopsony relative to sellers of such 13 commodities. 14 (10) The high concentration and consolidation 15 of buyers in agricultural markets has resulted in the 16 thinning of both cash and futures markets, thereby 17 allowing dominant buyers to leverage their market 18 shares to move those markets to the detriment of 19 family farmers and ranchers. 20 (11) Buyers with oligopsonistic or 21 monopsonistic power have incentives to engage in 22 unfair and discriminatory acts that cause farmers to 23 receive less than a competitive price for their goods. 24 At the same time, some Federal courts have incor- 25 VerDate Sep 11 2014 19:59 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2933.IH H2933 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 2933 IH rectly required a plaintiff to show harm to competi- 1 tion generally, in addition to harm to the individual 2 farmer, when making a determination that an un- 3 fair, unjustly discriminatory, deceptive, or pref- 4 erential act exists under the Packers and Stockyards 5 Act of 1921. 6 (12) The farmer’s share of every retail dollar 7 has plummeted from 41 percent in 1950, to less 8 than 15 percent today, while the profit share for 9 farm input, marketing, and processing companies 10 has risen. 11 (13) While agribusiness conglomerates are post- 12 ing record earnings, farmers are facing desperate 13 times. Since 2013, net farm income for United 14 States farmers has fallen by more than half and me- 15 dian on-farm income was negative in 2017 and in 16 2018 and is expected to be negative again in 2019. 17 (14) The benefits of low commodity prices are 18 not being passed on to American consumers. The 19 gap between what shoppers pay for food and what 20 farmers are paid is growing wider. 21 (15) The steadily rising price of food has out- 22 paced growth in incomes for typical workers. Since 23 the Great Recession, the annual growth of real 24 VerDate Sep 11 2014 19:59 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2933.IH H2933 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 2933 IH prices for food at the supermarket have risen nearly 1 3 times faster than typical earnings. 2 (16) There is growing consensus that economic 3 consolidation contributes to the widening gap in eco- 4 nomic opportunity in the United States and bigger, 5 more dominant firms are more likely to deliver prof- 6 its to investors than to raise wages or benefits. 7 Mega-mergers in the food and agribusiness indus- 8 tries can lead to growing monopsony power abuse re- 9 sulting in wage suppression, along with massive lay- 10 offs as companies shutter factories and facilities, 11 harming working families and communities. 12 (17) Concentration, low prices, anticompetitive 13 practices, and other manipulations and abuses of the 14 agricultural economy are driving small family farm- 15 ers out of business. Farmers are going bankrupt or 16 giving up, and few are taking their places; more 17 farm families are having to rely on other jobs to stay 18 afloat. Eighty-three percent of farm household in- 19 come is expected to come from off-farm work this 20 year, up from 53 percent in 1960. 21 (18) Eighty-one percent of America’s farmed 22 cropland is now controlled by 15 percent of farms, 23 and the number of farmers leaving the land will con- 24 VerDate Sep 11 2014 19:59 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2933.IH H2933 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 2933 IH tinue to increase unless and until these trends are 1 reversed. 2 (19) The decline of small family farms under- 3 mines the economies of rural communities across 4 America; it has pushed Main Street businesses, from 5 equipment suppliers to small banks, out of business 6 or to the brink of insolvency. 7 (20) Increased concentration in the agribusiness 8 sector has a harmful effect on the environment; cor- 9 porate hog farming, for example, threatens the in- 10 tegrity of local water supplies and creates noxious 11 odors in neighboring communities. Concentration 12 also can increase the risks to food safety and limit 13 the biodiversity of plants and animals. 14 (21) The decline of family farming poses a di- 15 rect threat to American families and family values, 16 by subjecting farm families to turmoil and stress. 17 Farm advocates across the country are reporting an 18 increase in farmer suicides over the past several 19 years. 20 (22) The decline of family farming causes the 21 demise of rural communities, as stores lose cus- 22 tomers, churches lose congregations, schools and 23 clinics become under-used, career opportunities for 24 VerDate Sep 11 2014 19:59 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2933.IH H2933 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 2933 IH young people dry up, and local inequalities of wealth 1 and income grow wider. 2 (23) These developments are not the result of 3 inevitable market forces. Its problems arise rather 4 from policies made in Washington, including farm, 5 antitrust, and trade policies. 6 (24) Past congressional action to remediate 7 market failure, such as enacting country-of-origin la- 8 beling to provide transparency for domestic farmers, 9 ranchers, and consumers regarding agricultural com- 10 modity origins, have been overturned for key com- 11 modities by oligopolistic conglomerates that use un- 12 differentiated imports to reduce domestic farm 13 prices. 14 (25) To restore competition in the agricultural 15 economy, and to increase the bargaining power and 16 enhance economic prospects for family farmers, the 17 trend toward concentration must be reversed. 18 SEC. 3. DEFINITIONS. 19 In this Act: 20 (1) AGRICULTURAL INPUT SUPPLIER.—The 21 term ‘‘agricultural input supplier’’ means any person 22 (excluding agricultural cooperatives) engaged in the 23 business of selling, in interstate or foreign com- 24 merce, any product to be used as an input (including 25 VerDate Sep 11 2014 19:59 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2933.IH H2933 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 2933 IH seed, germ plasm, hormones, antibiotics, fertilizer, 1 and chemicals, but excluding farm machinery) for 2 the production of any agricultural commodity, except 3 that no person shall be considered an agricultural 4 input supplier if sales of such products are for a 5 value less than $10,000,000 per year. 6 (2) BROKER.—The term ‘‘broker’’ means any 7 person engaged in the business of negotiating sales 8 and purchases of any agricultural commodity in 9 interstate or foreign commerce for or on behalf of 10 the vendor or the purchaser, except that no person 11 shall be considered a broker if the only sales of such 12 commodities are for a value less than $10,000,000 13 per year. 14 (3) COMMISSION MERCHANT.—The term ‘‘com- 15 mission merchant’’ means any person engaged in the 16 business of receiving in interstate or foreign com- 17 merce any agricultural commodity for sale, on com- 18 mission, or for or on behalf of another, except that 19 no person shall be considered a commission mer- 20 chant if the only sales of such commodities are for 21 a value less than $10,000,000 per year. 22 (4) DEALER.—The term ‘‘dealer’’ means any 23 person (excluding agricultural cooperatives) engaged 24 in the business of buying, selling, or marketing agri- 25 VerDate Sep 11 2014 19:59 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2933.IH H2933 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 2933 IH cultural commodities in interstate or foreign com- 1 merce, except that— 2 (A) no person shall be considered a dealer 3 with respect to sales or marketing of any agri- 4 cultural commodity of that person’s own rais- 5 ing; and 6 (B) no person shall be considered a dealer 7 if the only sales of such commodities are for a 8 value less than $10,000,000 per year. 9 (5) INTEGRATOR.—The term ‘‘integrator’’ 10 means an entity that contracts with farmers for 11 grower services to raise chickens or hogs to slaugh- 12 ter size and weight. The integrator owns the chick- 13 ens or hogs, supplies the feed, slaughters, and fur- 14 ther processes the poultry or pork. 15 (6) PROCESSOR.—The term ‘‘processor’’ means 16 any person (excluding agricultural cooperatives) en- 17 gaged in the business of handling, preparing, or 18 manufacturing (including slaughtering and food and 19 beverage manufacturing) of an agricultural com- 20 modity, or the products of such agricultural com- 21 modity, for sale or marketing for human consump- 22 tion, except that no person shall be considered a 23 processor if the only sales of such products are for 24 a value less than $10,000,000 per year. 25 VerDate Sep 11 2014 19:59 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2933.IH H2933 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 2933 IH (7) RETAILER.—The term ‘‘retailer’’ means any 1 person (excluding agricultural cooperatives, coopera- 2 tive retailers, and cooperative distributers) licensed 3 as a retailer under the Perishable Agriculture Com- 4 modities Act of 1930 (7 U.S.C. 499a(b)), except 5 that no person shall be considered a retailer if the 6 only sales of such products are for a value less than 7 $10,000,000 per year. 8 TITLE I—MORATORIUM ON 9 LARGE AGRIBUSINESS, FOOD 10 AND BEVERAGE MANUFAC- 11 TURING, AND GROCERY RE- 12 TAIL MERGERS 13 SEC. 101. MORATORIUM ON LARGE AGRIBUSINESS, FOOD 14 AND BEVERAGE MANUFACTURING, AND GRO- 15 CERY RETAIL MERGERS. 16 (a) IN GENERAL.— 17 (1) MORATORIUM.—Until the date referred to 18 in paragraph (2) and except as provided in sub- 19 section (b)— 20 (A) no dealer, processor, commission mer- 21 chant, agricultural input supplier, broker, or 22 operator of a warehous [Text truncated for display. Full text available on Congress.gov.]