US — The Biden administration has enacted a new executive order aimed at cracking down on anti-competitive practices in major sector sectors of the economy including agriculture, healthcare, and technology.
According to the US White House, in more than 75% of US industries, “a smaller number of large companies control more of the business” than was the case 20 years ago.
This according to the Biden Administration has resulted in consolidation of markets particularly in healthcare, technology, finance, and agriculture with little to no competition among the existing players.
The result was higher prices for consumers and lower wages for American workers which the White House estimates to cost the median American household UIS$5,000 per year.
Big food corporations including suppliers of farm equipment and agricultural inputs for growers were called out in the announcement for their anti-competitive behaviors.
Agricultural markets are more concentrated and less competitive
Over the past few decades, key agricultural markets have become more concentrated and less competitive,” the administration said.
“The markets for seeds, equipment, feed, and fertilizer are now dominated by just a few large companies, meaning family farmers and ranchers now have to pay more for these inputs.”
The administration gave the example where Powerful equipment manufacturers — such as tractor manufacturers — use proprietary repair tools, software, and diagnostics to prevent third parties from performing repairs.
This according to the White House forces farmers to pay dealer rates for repairs that they could have made themselves, or that an independent repair shop could have done more cheaply.
The meat industry was also singled out as highly consolidated, uncompetitive, and exploitive to farmers and consumers.
“Four large meat-packing companies dominate over 80% of the beef market, and, over the last five years, farmers’ share of the price of beef has dropped by more than a quarter — from 51.5% to 37.3% — while the price of beef has risen,” the Biden administration said.
Still, on the meat industry, the Biden administration noted that foreign companies also are squeezing US farmers and ranchers.
As an example, the administration said most meat sold domestically as “Product of USA” often is raised overseas and then sliced in the United States.
Open and Fair competition
Biden’s administration was confident that the new executive order will address the injustices that most Americans have been subjected to as a result of market consolidation.
Speaking at the White House before signing the Executive Order, President Biden said, “The heart of American capitalism is a simple idea — open and fair competition.”
“Competition keeps the economy moving and keeps it growing,” he continued. “Fair competition is the reason capitalism has been the greatest force for prosperity and growth.”
The Executive Order will launch a government-wide effort to promote competition and includes 72 initiatives by more than a dozen federal agencies to promptly tackle some of the most pressing competition programs across the US economy.
The order directs the US Department of Agriculture to develop a plan to “increase opportunities for farmers to access markets and receive a fair return.”
In this regard, the agency has been asked to explore initiatives such as supporting alternative food distribution systems like farmer’s markets and developing standards and labels so that consumers can choose to buy products that treat farmers fairly.
The USDA also has been directed to issue new rules establishing when meat can carry “Product of USA” labels to ensure the initiative benefits US farmers
The order has also asked the USDA to make it easier for farmers to “bring and win claims” under the Packers and Stockyards Act, related to how farmers are paid to protect them from retaliation when farmers “speak out about bad practices.”
“I’m a proud capitalist,” Mr. Biden said in his remarks. “I know America can’t succeed unless American business succeeds. But let me be clear, capitalism without competition isn’t capitalism. It’s exploitation.”
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