Michael Sykuta headshot

Associate Professor, Division of Applied Sciences
University of Missouri

Michael Sykuta is an economist and Associate Professor in the Division of Applied Social Sciences at the University of Missouri. He is Executive Director of the Financial Research Institute (FRI), whose programs focus on public utilities regulation and utility industry issues. He is also Co-founder and Director of the Contracting and Organizations Research Institute (CORI), an interdisciplinary research program focused on the economics and law of contracting, organization, and corporate governance.

Agriculture & Biotech

Popular Media

The Enforcers [#agworkshop] [#dojusda]

To expand on Geoff’s post about concentration in the seed industry, there has been a consistent line of discussion throughout the day raising the specter of monopoly and anti-competitive behavior, not only in seed but also in livestock.  There are continual references to adverse price effects and limitations in choice for consumers and producers alike, followed by such tagged-on qualifiers as “if there are any”. The implication is that there is good reason to believe such effects exist and simply have yet to be discovered if we look.

But that question has already been answered. The Government Accountability Office conducted a study of the agriculture sector.  In addition, they consulted the academic literature and scholars and other experts in the field. The GAO concluded there is no evidence that concentration has had any adverse price effects on commodities or consumer producers.

One would expect that someone among the panel of enforcers at the state or federal level, particularly the DOJ or USDA, would be aware of and familiar with the GAO report. I submitted a question to that effect, asking if–or how–the GAO report would inform the activities of the state and federal enforcers. That question was not selected by the moderator to be addressed.

Antitrust is an extremely blunt tool that cuts coarsely through an industry. Wielding such a tool blithely before the face of industry is likely to have chilling effects on investment and innovation. Why would (or should) businesses invest in facilities, producers, or innovations when there is such great uncertainty over how the politicization of antitrust enforcement is going to be brought down upon them?

There is some snow still on the ground here in Iowa. It will melt more slowly given the chill cast upon agriculture by the comments of the enforcers…if the comments have more behind them than just saying what a farmer-oriented audience wants to hear. Perhaps Marvel Comics had it right?

Filed under: ag/antitrust workshop, markets, Sykuta Tagged: agriculture, Ankeny, antitrust in agriculture, DOJ agriculture workshop