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Antitrust issues put heat on Monsanto
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Kai Ryssdal: The agribusiness giant Monsanto is going to be a big topic in Ankeny, Iowa, this Friday. The Justice and Agriculture Departments will be holding what's billed as a workshop on agricultural antitrust. Interestingly, Monsanto and antitrust are increasingly being mentioned in the same sentence.
Sarah Gardner reports from the Marketplace Sustainability Desk.
SARAH GARDNER: According to Bloomberg News, at least seven state attorneys general are joining forces to investigate possible antitrust violations by Monsanto. On top of that, the Justice Department has been investigating the company's marketing practices. Today Monsanto execs kept mum, but a corporate spokeswoman speed-read a statement.
SPOKESWOMAN: Monsanto believes an objective review of the agricultural sector will reveal that competition is alive and flourishing.
That was "competition" is alive and flourishing, an assertion many U.S. soybean and corn farmers dispute.
John Crabtree directs the Center for Rural Affairs in Nebraska. He says when farmers pay for seed these days it doesn't feel like there's competition.
JOHN CRABTREE: When not too many years ago they used to be able to buy a bag of soybean seed, for example, or corn seed for under $100 a bag and now they're paying close to or even above $300 a bag. These are enormous price increases.
BRUCE BABCOCK: Well Monsanto has been increasing prices for their seed.
Iowa State University economist Bruce Babcock...
BABCOCK: And the reason they've been able to do it is because they produce really good seeds, and they have property rights over those seeds.
Antitrust lawyers say it's not illegal for a company to hold a monopoly share. But Backcock and others say the real question is whether Monsanto uses its market power illegally to stifle competition. Among the practices that may violate the law: offering generous rebates to seed distributors if they exclude rival products.
I'm Sarah Gardner for Marketplace.
The freedoms in this nation, and the prosperity that can only be created by a free people, are based on the checks and balances engineered into the Constitution. We should never forget that these were the result of a clear-eyed understanding of human nature by our founding fathers to protect us from abuse of power by government
In the economy, however, where are the checks on the abuses of corporate power? Those running huge corporations continually act in their own self-interest: more cash, short-term better than long; entrenched positions – controlling competition. That is human nature and to be as honest as our founding fathers were, only angels would act differently. And none of us are that, especially those that are likely to get to the head of a large corporation.
As James Madison put it, it is necessary to pit ambition against ambition. In terms of the economy that means enlightened anti-trust enforcement. It means smaller companies that would be forced to succeed by “building a better mousetrap†and not by coercing others to use their existing mousetrap because they have the cash to dominate a market which long since ceased to be free.
The Gardner story overlooks the insidious role Monsanto is playing in Latin America. There, the company is encouraging farmers to plant soybeans in preference to traditional crops, thereby undermining the ability of these countries to provide food for their own populations, preferring the export of soybeans. But the greater evil is this: the Monsanto beans are resistant to pesticides, so farmers can use pesticides without limit. The environmental damage is enormous, but these countries don't have environmental safeguards to protect them. Monsanto can operate without adequate controls. Pesticides are the real story. Monsanto makes those.
I don't see much about it here:
http://www.justice.gov/atr/public/workshops/ag2010/
The word "seed" appears one time on the page. The word "Monsanto" doesn't appear.
What makes anyone think Monsanto is on the federal government's agenda? Why would they do anything about it just for a few state attorneys and some farmers?.
I don't believe you'll get any more action than a "We'll have to look into that" unless a significant number of people speak up, and I'm telling you (Food, Inc. or not) there are very few Americans who know about the dangers we're facing.
Who (besides a giant corporation) can afford a TV spot to tell them?
As Ian Cheney and Curt Ellis demonstrated in the 2007 documentary "King Corn", which was subsequently validated in the 2009 Robert Kenner documentary "Food, Inc.", about the only beneficiaries to the practices of companies like Monsanto, Cargill, ADM, Smithfield Foods and other agri-business giants have been the shareholders of these companies, as public health, farmers, and the environment have all paid a price.
