Agriculture and Antitrust Enforcement Issues in Our 21st Century Economy, 43725-43726 [E9-20671]

Agencies

• Antitrust Division
• Department of Justice
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 74, Number 165 (Thursday, August 27, 2009)]
[Notices]
[Pages 43725-43726]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20671]


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DEPARTMENT OF AGRICULTURE

DEPARTMENT OF JUSTICE

Antitrust Division


Agriculture and Antitrust Enforcement Issues in Our 21st Century 
Economy

AGENCIES: U.S. Department of Agriculture and U.S. Department of 
Justice, Antitrust Division.

ACTION: Notice of public hearings and opportunity for comment.

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SUMMARY: The Antitrust Division of the U.S. Department of Justice (DOJ) 
and the United States Department of Agriculture (USDA) strongly believe 
that a competitive agriculture sector is vitally important to producers 
and consumers alike. To this end, the DOJ and USDA, with the 
participation of State Attorneys General, intend to hold a series of 
public workshops to explore competition issues affecting the 
agricultural sector in the 21st Century and the appropriate role for 
antitrust

[[Page 43726]]

and regulatory enforcement in that sector. Agricultural producers and 
their representatives have expressed concerns about changes in the 
agricultural marketplace, including increasing processor concentration 
in some commodities. There have been several congressional oversight 
hearings related to competition in the agricultural sector, as well as 
legislative proposals to restrict the activities of agricultural 
processors and intensify federal government scrutiny of agricultural 
mergers.
    The workshops will address the dynamics of competition in 
agriculture markets, including, among other issues, buyer power (also 
known as monopsony) and vertical integration. They will examine legal 
doctrines and jurisprudence and current economic learning, and will 
provide an opportunity for farmers, ranchers, consumer groups, 
processors, agribusinesses, and other interested parties to provide 
examples of potentially anticompetitive conduct and to discuss any 
concerns about the application of the antitrust laws to the 
agricultural sector. The goals of the workshops are to promote dialogue 
among interested parties and foster learning with respect to the 
appropriate legal and economic analyses of these issues as well as to 
listen to and learn from parties with real-world experience in the 
agricultural sector.
    To begin, the DOJ and USDA are soliciting public comments from 
lawyers, economists, agribusinesses, consumer groups, academics, 
agricultural producers, agricultural cooperatives, and other interested 
parties. The DOJ and USDA are interested in comments on the application 
of the antitrust laws to monopsony and vertical integration in the 
agricultural sector, including the scope, functionality, and limits of 
current or potential rules. The DOJ and USDA are also inviting input on 
additional topics that might be discussed at the workshops, including 
the impact of agriculture concentration on food costs, the effect of 
agricultural regulatory statutes or other applicable laws and programs 
on competition, issues relating to patent and intellectual property 
affecting agricultural marketing or production, and market practices 
such as price spreads, forward contracts, packer ownership of livestock 
before slaughter, market transparency, and increasing retailer 
concentration.
    The DOJ and USDA plan to hold the first workshop in early 2010. 
While some of these workshops may be held in Washington, DC, others 
will be held regionally. The DOJ and USDA plan to publish a more 
detailed description of the topics to be discussed before each workshop 
and to solicit additional submissions about each topic. The workshops 
will be transcribed and placed on the public record. Any written 
comments received also will be placed on the public record.

DATES: Any interested person may submit written comments responsive to 
any of the topics addressed in this Federal Register notice. 
Respondents are encouraged to provide comments as soon as possible, but 
no later than December 31, 2009.

ADDRESSES: Written comments should be submitted in both paper and 
electronic form to the Department of Justice. All comments received 
will be publicly posted. The comments should be submitted as follows:
    Two paper copies should be addressed to the Legal Policy Section, 
Antitrust Division, U.S. Department of Justice, 450 5th Street, NW., 
Suite 11700, Washington, DC 20001. The Antitrust Division is requesting 
that the paper copies of each comment be sent by courier or overnight 
service, if possible, because U.S. postal mail at the Department is 
subject to delay due to heightened security precautions. The electronic 
version of each comment should be submitted by electronic mail to 
agriculturalworkshops@usdoj.gov.

FOR FURTHER INFORMATION CONTACT: Mark B. Tobey, Special Counsel for 
State Relations and Agriculture, Antitrust Division, U.S. Department of 
Justice, 950 Pennsylvania Ave., NW., Washington, DC 20530; telephone: 
(202) 532-4763; e-mail: agriculturalworkshops@usdoj.gov. Detailed 
agendas and schedules for the workshops will be made available on the 
Antitrust Division's Web site, https://www.usdoj.gov/atr.

SUPPLEMENTARY INFORMATION: The Horizontal Merger Guidelines recognize 
monopsony power and its exercise as a concern in analyzing potential 
competitive effects of proposed mergers and acquisitions. As a general 
proposition, the analysis of competitive issues in monopsony cases is 
the mirror image of the more common analysis of competitive issues in 
monopoly cases. For example, instead of determining whether the merged 
firm would gain sufficient market power to raise prices to consumers, 
monopsony analysis focuses on whether the merged firm would gain 
sufficient market power to depress prices paid to its suppliers. 
Likewise, instead of determining whether the buyers could defeat an 
attempt by the merged firm to increase prices by a small but 
significant and non-transitory amount by switching to alternative 
products or alternative suppliers, the issue in a monopsony 
investigation is whether the sellers could defeat an attempt by the 
merged firm to depress prices by producing other products or by selling 
their products to other buyers.
    Vertical integration occurs when multiple stages of production, for 
example, processing, distribution, or marketing, are brought together 
in one firm or are linked by contracts. In many instances, vertical 
integration may be procompetitive, allowing firms to reduce their 
costs. However, there may be circumstances in which vertical 
integration raises antitrust concerns, usually by increasing barriers 
to entry, facilitating collusion, or circumventing regulation.

Christine A. Varney,
Assistant Attorney General, Antitrust Division.
Ann Wright,
Deputy Undersecretary for Marketing and Regulatory Programs, Department 
of Agriculture.
[FR Doc. E9-20671 Filed 8-26-09; 8:45 am]
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