By Raymond Starks (Drake University)
It is clear regulation alone is not enough to ensure firms with monopolistic tendencies will not continue to engage in monopolistic behavior. Due to the vital importance of credit access to the American economy and the urgency required of policymakers during the financial crisis, legislators passed new regulations on the banking industry. The government reacted to the “too big to fail” financial industry through bailouts of the companies and the creation of new laws, but the government has failed to respond to the growing threat large agricultural companies may pose when these companies have the ability to use monopoly power. Under the Trump Administration, the Department of Agriculture has withdrawn a rule under the Grain Inspection, Packers and Stockyards Act (GIPSA), providing clear definitions for certain predatory practices by agriculture corporations. To effectively regulate monopolistic tendencies it also takes an active administration responsible for enforcing the law.
The government must take the lead in preventing the creation of monopolies by exercising its power under both the Sherman Antitrust Act and the Clayton Act to block the consolidation of agribusiness. If they fail to do so, these companies will continue to grow their already considerable market power. Regulators must take action to reduce the consolidation of this vital industry through regulations promoting competition and prevent mergers. The government must also use their regulatory powers to break up companies if necessary to protect the public from monopolies.