Tuesday, May 18, 2010

Feds probe antitrust issues in chicken industry; Ga. GOP senator questions agencies' good faith

We've been following the ongoing investigations by the U.S. Department of Justice and Department of Agriculture into antitrust allegations in agribusiness, and now those complaints have brought investigators to the Southeast to examine allegations of anti-competitive practices in the poultry industry. "The two agencies are about to hold a field hearing in the first step to try to discover if big chicken companies such as Perdue or Tyson Foods are hurting small farmers by imposing arduous contracts and tough price constraints," Bob Keefe of the Atlanta Journal-Constitution reports. The first hearing is scheduled for May 21 in Normal, Ala.

Georgia is the nation's biggest poultry producer, and the Georgia Poultry Federation reports the industry brings an estimated $18.4 billion to the state's economy and directly and indirectly employs more than 100,000 Georgians, Keefe writes. Federal officials say the hearings are more a fact-finding mission than a full-blown investigation. "The goal is basically to have an open conversation, an open dialogue about the competition issues and regulatory issues and to listen and learn from all the different interested parties," Justice spokeswoman Gina Talamona told Keefe. Investigators are interested in the standard contract system that pays poultry farmers to raise chicks owned by big food companies.

Some, including Georgia Republican Sen. Saxby Chambliss, have wondered aloud if the antitrust probes are overstepping the departments' bounds. "We've never seen DOJ go into rural America," Chambliss told the AJC. "If there's a legitimate issue, it ought to be talked about. But we don't want DOJ and the USDA going around the country promoting litigation and lawsuits." Chambliss added that he worries the DOJ and USDA are prepping for lawsuits against big food and agriculture companies by using the field hearings to obtain "almost scripted testimony" from farmers as support. (Read more)

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