Senator Tester Discusses Ag Consolidation at Recent Senate Hearing

On April 21, 2021, the Senate Committee on Commerce, Science, and Transportation considered the nominations of Bill Nelson to be NASA Administrator, Lina Khan to be a FTC Commissioner, and Leslie Kiernan to be General Counsel of the U.S. Department of Commerce.

During the hearing, Senator Jon Tester of Montana shared concerns about problems that come from consolidation in the agriculture sector such as:

  • rural communities drying up
  • the undue influence of money on reelection campaigns
  • the fact that just a few people can fix market prices over a round of golf
Skip to 1:58:46 to hear Senator Tester’s remarks.

AFA shares Senator Tester’s concerns. Yet it’s no wonder we are where we are now when anti-trust actions have been so few in the past decades. The DOJ has plenty of opportunities for improvement.

Jon Tester is an American farmer and politician serving as the senior US Senator from Montana. We have provided the transcript of his comments here.

Transcript: Senator Tester

Thank you Madam Chair. This is for nominee Khan. And it goes kind of on the same line as Senator Fischer was asking. I’m in agriculture. Agriculture is the number one industry in Montana. And, feeding people is really really important. You can control people with food more than you can control with anything else. We’ve had the luxury of having an incredible production agriculture economy that has fed the world.

Not just recent years, but for some time, we’ve watched consolidation creep into agriculture in the chicken industry, in the pork industry, in the beef industry, and the grains. We even see it in pulses and crops like that. 

This isn’t Amazon, it’s not Facebook, it’s not new technology; the big processors have been doing this for decades, and decades. I would say that no administration, democrat or republican, has tackled this in my lifetime.

I’ve seen this consolidation result in rural communities drying up; no competition in the marketplace both when you sell goods, and when you buy inputs. You’re totally locked into a group of 3-4 people who could basically go onto a golf course and determine what’s going to be paid in the marketplace. Capitalism is not working.

Senator Jon Tester at the April 21, 2021, Senate Committee on Commerce, Science, and Transportation Hearing
Skip to 1:58:46 to hear Senator Tester’s remarks.

So my question to you, nominee Khan is, you’re a smart person, you know about consolidation… But, I think the reason that many administrations in past haven’t dealt with this is because these companies control a lot of money. And they control a lot of power. They can put that influence into the reelection campaigns of many people that sit on this panel and a whole bunch of others.  

How are you going to deal with the consolidation issue? And how are you going to deal with it from a political standpoint?

Senator Jon Tester at the April 21, 2021, Senate Committee on Commerce, Science, and Transportation Hearing

An Exchange with Nominee Khan

In response, Ms. Khan noted that there’s a long history of economic concentration translating into political power across the board. She referred to the Packers and Stockyards Act as a hidden gem of a statute governing agriculture. Moreover, she advised the Justice Department to make use of it. Furthermore, she observed how ag markets demonstrate how the concentration of food supplies can lead to fragility issues. This fragility is especially apparent during times of crisis.

Senator Tester pointed out that agencies often point the finger at each other, so he wanted to know what the FTC will do.

Finally, Ms. Khan replied that the FTC’s jurisdiction over agriculture was stripped after publishing an expose of consolidation among meatpackers in the early 1920s. However, the FTC retains jurisdiction over the retail end of the agriculture industry, so the FTC will focus there.

I appreciate that. As someone involved in production agriculture, I would hope that we would get some folks that would tackle the agribusiness, multinational agribusiness companies that quite frankly, I just think that they’ve not allowed capitalism to work. And that’s my opinion and it will be my opinion until I learn otherwise. 

Senator Jon Tester at the April 21, 2021, Senate Committee on Commerce, Science, and Transportation Hearing