Chairman Richard G. Lugar
U.S. Senator for Indiana
Opening Statement on Agriculture Concentration
Today the Senate Agriculture Committee is holding a hearing on two matters. The first is the confirmation of Michael V. Dunn to be a member of the Farm Credit Administration Board. The second will address concentration and competition in agriculture
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First we will turn to the confirmation of Mr. Dunn. A native of Iowa, Mr. Dunn currently serves as the Under Secretary for Marketing and Regulatory Programs at the U.S. Department of Agriculture. Prior to that he was the Deputy Under Secretary for Operations and Management in the Rural Economic and Community Development mission area at USDA. Additionally, Mr. Dunn served as Administrator of the former Farmers Home Administration at the Department of Agriculture. Mr. Dunn is no stranger to this Committee; from 1987- 1988, he worked as a professional staff member under the chairmanship of Senator Leahy.
The availability, efficiency and affordability of agricultural credit remains an important issue to the members of this committee. As a member of the Farm Credit Administration Board, Mr. Dunn will play an important role in the future of farm credit.
We are pleased to have him before the Committee today and look forward to hearing from him. Before recognizing Mr. Dunn for his statement, I would like to turn to Senator Harkin for any comments he would like to make.
Today, the Senate Agriculture Committee will conduct the fourth in a series of hearings in this Congress addressing concentration and competition in agriculture.
The Committee has previously heard testimony outlining the potential cost and benefits accompanying consolidation and coordination in agriculture. Witnesses have told us that the benefits include higher quality products available at lower consumer prices and more efficient use of production resources, enabling resources to move to production of other products, thus increasing the national living standard. On the cost side, witnesses have testified that consolidation has negative impacts on environmental quality, economic viability of small farm and firm operations, and rural communities dependent on agriculture.
The Committee has received testimony from Joel Klein, the Assistant Attorney General for Antitrust at the Department of Justice. Mr. Klein told the Committee that the Department of Justice possesses adequate authority to execute antitrust laws, the question is using them properly. However, recent consolidations continue to raise questions about concentration and antitrust enforcement.
Today's hearing will explore what tools are necessary to facilitate the enforcement of laws prohibiting unfair business practices and which federal agency is best suited to execute these laws. The Committee will also consider what role the U.S. Department of Agriculture should play in the agribusiness merger review process. Currently, reviews of mergers and acquisitions within the agribusiness sector occurs with the Federal Trade Commission and the Department of Justice. These agencies often call upon the USDA to provide expertise and data on pending reviews. There are proposals before the Committee which formalize USDA's role in the merger review process. Those proposals do other things such as establishing a commission to review claims of family farmers and ranchers who have suffered financial damages due to unfair business practices. Also, these proposals require large agribusinesses to report on their corporate structure describing domestic and foreign activities.
Mr. John Nannes, the Deputy Assistant Attorney General at the Department of Justice, will provide the Committee with a progress report on the newly created position of Special Counsel for Agriculture within the Department of Justice.
I welcome Mr. James Rill, formerly the Assistant Attorney General for Antitrust and, who more recently, was appointed by the Attorney General to chair the International Competition Policy Advisory Committee, whose final report was completed in February. I welcome Mr. David Nelson from Credit Suisse First Boston. Mr. Nelson will provide the Committee with an analysis of the performance of agribusiness on Wall Street.
Also presenting testimony are Dr. Steven Koontz from Colorado State University and Mr. Peter Carstensen from the University of Wisconsin. Both have done extensive research on the issues of agriculture concentration and antitrust law.
Today's third panel contains Mr. Ron Warfield from Gibson City, Illinois, representing the American Farm Bureau Federation, Mr. Leland Swenson from Aurora, Colorado, President of the National Farmers Union, Mr. John Greig from Estherville, Iowa, representing the National Cattlemen's Beef Association, and Mr. John Caspers from Swaledale, Iowa, representing the National Pork Producers Council.
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