Attorney General Eric Holder and the Justice Department antitrust chief Christine Varney joined farmers, state officials, economists, and industry representatives in Ankeny, Iowa, on Friday for the first of a series of hearings on competition in the agriculture industry.
In his opening remarks, Holder said: “We know that a growing number of American farmers find it increasingly difficult to survive by doing what they’ve done for decades. And we’ve learned that some of them believe the competitive environment may be, at least in part, to blame.”
The discussions, hosted by the Justice and Agriculture departments, are a “milestone event,” Holder said, because “not once” since federal antitrust laws were passed “have our nation’s departments of Justice and Agriculture come together for a public discussion on competition and regulatory issues” in the industry.
The backdrop of the debate is an antitrust battle between two huge seed companies, the St. Louis-based Monsanto Co. and Pioneer Hi-Bred International Inc., a Johnston, Iowa, based subsidiary of DuPont.
Monsanto patented a now-ubiquitous technology that makes seeds resistant to weed killers. DuPont has accused Monsanto of using restrictive licenses on that technology that shut out competitors and force farmers to pay higher prices for seeds.
The battle spilled over into Friday morning’s newspapers, with the Los Angeles Times and the New York Times focused on rising seed prices, while Business Week focused on Monsanto’s rights as the patent holder.
In a statement about the workshop, Monsanto’s vice president of industry affairs, Jim Tobin, said: “The fight to win the farmer’s business is intense and that has translated to not only more profitable choices for farmers over the past decade, but also more value for farmers.”
Tobin, who is appearing at the Iowa workshop, cited a study that found U.S. farmers have seen $20 billion in extra income in the past decade from growing corn, soybeans and cotton with engineered seed.
Monsanto said it invested in biotech research when that kind of technology was considered financially risky.
In a January ruling, a federal judge in Missouri said that DuPont had violated the terms of its contract with Monsanto when it combined its own herbicide-resistant gene with Monsanto’s popular Roundup Ready trait. But the judge did not say whether the license agreement was anticompetitive, which DuPont has alleged.
“Because Roundup Ready is in all seeds,” Denvir said in an interview, “the effect is to exclude competitors.”
Denvir likened Monsanto’s tactics to Microsoft’s practice of tying its web browser, Internet Explorer, to its popular operation system, Windows. That practice led to the government’s landmark antitrust case against Microsoft, which alleged that the software giant shut competing browser companies like Netscape and Opera out of the market.
No trip to Iowa would be complete without touching on the state’s role as the first primary in the presidential election season. In his speech, Holder said of his time in Iowa during Obama’s campaign: “That’s when the people of this great state taught me – and proved to our entire nation – that no matter how improbable the goal or difficult the task, there’s simply no better place to begin than here in Iowa.”
Main Justice contributor Geoffrey Manne is blogging from the workshop here.
updated at 3:45 p.m. to add comments from DuPont.