A well-functioning economy is dependent on healthy and fair market competition. However, across nearly every sector of U.S. economy, from tech to banking to food, just a few companies control most or all of the market. In agriculture, a “get big or get out” federal farm policy has led to fewer farms and farmers and contributed to at least two generations leaving rural communities. Today, many rural communities have only one or two stores, and farmers, ranchers, and other producers have equally few buyers for their goods. The lack of competition means that rural residents face higher consumer prices, lower producer prices, and less choice, while the consolidated business owners – often multinational corporations whose profits are not reinvested in the community – reap the benefits.
Strengthen Economic Competition
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Enforcement of antitrust laws at the federal level could significantly help to lower prices, increase wages, expand choice, and redistribute economic power. A July 2021 executive order from the Biden administration and subsequent related orders have taken important steps to address farmer and rancher market access and competition. While most antitrust action happens at the federal level, state policymakers can pass state-level legislation to address the issue by increasing competition for independent businesses. They can also work with state attorneys general to enforce antitrust laws and to work with federal regulators in the Department of Justice or the Federal Trade Commission to object to mergers and acquisitions.
States can also address specific harms caused by outsized corporate power. For example, often, farm equipment includes a restrictive contract clause that prohibits the buyer from making repairs, instead requiring the farmer to bring the equipment to the dealer, which is much more expensive and time-consuming. “Right to repair” laws prohibit this arrangement, allowing the end consumer to repair their device, whether it is a combine or a smartphone.
Policy Priorities
- Federal: Pass essential reforms to update and strengthen antitrust policy for the 21st century. These reforms should include many of the recommendations identified in the House of Representatives Report on Competition in the Digital Sector and Senator Klobuchar’s Competition and Antitrust Law Enforcement Reform Act.
The Department of Justice and Federal Trade Commission have opened a wide range of investigations and started the process of reforming the rules around corporate mergers and acquisitions.
The Department of Justice supported poultry farmers to get better pay by effectively ending a deeply anti-competitive payment scheme known as the “tournament” system.
Congress removed barriers to antitrust enforcement. The State Antitrust Enforcement Venue Act supports state officials to better advocate for fair competition.
Congress increased funding for antitrust enforcement by passing the Merger Filing Fee Modernization Act which increases the fees companies pay when they propose mergers. This gives antitrust enforcers the resources they need to ensure that corporations don’t hurt working people and small businesses and play by the rules.
US Department of Agriculture (USDA) empowered State Attorneys General to better enforce competition violations. This initiative reverses decades-long failures to enforce current law and reduces overall enforcement cost.
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Federal: Pass the Food and Agribusiness Merger Moratorium and Antitrust Review Act as the first step toward dealing with extreme levels of consolidation in the agriculture sector.
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Federal: Pass “right to repair” laws. National “right to repair” is gaining momentum and would empower people to repair their equipment and property without going to an authorized agent.
The President’s order on Competition in the American Economy directs agencies across the Federal government to rein in giant corporations that have unfairly monopolized markets, hurting small businesses and driving up costs for America’s families. A key provision for rural communities, the order established the right to repair.
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Federal: Strengthen food labeling requirements, beginning with reinstating mandatory country of origin labeling (COOL) on beef and pork, such as in the American Beef Labeling Act. Multinational corporations currently use lax labeling requirements to manipulate and mislead consumers while taking advantage of American farmers and ranchers.
The FTC adopted transparency rules governing “Made in the USA” labeling and USDA proposed new rules for the “Product of USA” label claim. These moves by the administration, which require all meat and meat products to be 100% “born, raised, and slaughtered” in the US to qualify for that label creates transparency for consumers and levels the playing field for farmers and ranchers.
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State: Support enforcement of antitrust laws.
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State: Pass state-level “right to repair” laws.
State Examples
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The New York 21st-Century Antitrust Act (2021 NY S 933A) would update antiquated antitrust laws to shift the dominant power of big corporations back to workers, small businesses, and communities.
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The Washington State attorney general sued monopolistic poultry companies for conspiracy and price fixing. State attorneys general can also work with federal regulators in the Department of Justice or the Federal Trade Commission to object to mergers and acquisitions.
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More than 20 states are considering “right to repair” laws, including New York (2021 NY S 149, 2021 NY S 1512) and Oregon (2021 OR HB 2698).