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May 16 -- USDA extends comment period through June 15, 2022. As the original comment period overlapped a critical time for agricultural producers to plant crops and for academics to conclude semesters, AMS is extending the public comment period for an additional 30 days to encourage additional public comment. (FRN links below.)

Mar 17  -- The USDA Agricultural Marketing Service invites comment by May 16, 2022 on the state of competition in food retail and distribution markets; seeds and other agricultural inputs; and fertilizer.

On July 9, 2021, President Biden issued an Executive Order on “Promoting Competition in the American Economy,” which creates a White House Competition Council and directs Federal agency actions to enhance fairness and competition across America's economy. E.O. 14036 directs the Secretary of Agriculture (the Secretary), among other things, to submit reports on: the effect of retail concentration and retailers' practices on the conditions of competition in the food industries; and concerns and strategies for ensuring that the intellectual property (IP) system, while incentivizing innovation, does not also unnecessarily reduce competition in seed and other input markets.

Also, E.O. 14017 “America's Supply Chains” directs the Secretary to examine and address risks to supply chains. As part of USDA's focus on competition and supply chain resiliency, the Secretary takes note of wide-ranging concern from agricultural producers regarding access to and pricing of fertilizer.

Three FR notices request comments and information from the public to assist USDA in preparing the required reports and advancing policy steps to promote competition in the food and agricultural markets.
 
1) Competition in Food Retail and Distribution Markets and Access for Agricultural Producers and Small/Midsized Food Processors
 
E.O. 14036 directs the Secretary, not later than 300 days after the date of this order, in consultation with the Chair of the FTC, [to] submit a report to the Chair of the White House Competition Council, on the effect of retail concentration and retailers' practices on the conditions of competition in the food industries, including any practices that may violate the Federal Trade Commission Act, the Robinson-Patman Act, or other relevant laws, and on grants, loans, and other support that may enhance access to retail markets by local and regional food enterprises.

This notice requests comments and information from the public to assist USDA in preparing and executing the required report. To facilitate those comments and information on access to retail markets, we highlight certain questions and concerns that are relevant to our efforts.

Consolidation in food retail and related parts of the supply chain, such as distribution, present potential risks of unfair and anticompetitive practices throughout the food supply chain. . . .

The rise in food retail and distribution concentration in recent decades potentially impacts agricultural producers and small, midsized and otherwise independent (SME) processors—as well as potentially ultimately impacting consumers. Concentration in food retail and distribution may magnify and contribute to consolidation among meat and poultry processing firms, among other food system market participants.

Such firms themselves may consolidate to secure leverage against consolidated food retail firms, which in turn may make it more difficult for SME processors to access food retail markets. Concerns relating to exclusionary and predatory conduct in food retail and distribution thus may be particularly relevant to the viability of new and expanded meat and poultry processing facilities and other new food system market entrants, which are receiving over $1 billion of support under the White House Meat and Poultry Processing Supply Chain Action Plan.

USDA will use public comments received through this notice to inform our policymaking and advocacy to help increase fairness and competition in food retail and related segments of the American food and agricultural markets. We are particularly interested in the role that rules, regulations, and enforcement under the Packers and Stockyards Act of 1921 and the Robinson-Patman Act of 1936—both of which were designed to regulate discriminatory limits on market access—may play in enhancing market access for agricultural producers and SME processors to retail markets, and especially in preventing predatory pricing by incumbent market participants to exclude new market entrants and competitors.

We are also interested in comments addressing the role that grants, loans, and other programs and services may play to enhance access to retail markets by agricultural producers, SME food processors, and other local and regional food enterprises. The Department is particularly interested in the role that cooperative or community-owned grocery retail and food distribution networks have or may play in addressing market challenges and in better serving producer, worker, community, and consumer needs, for example in remote locations or underserved communities.

Commenters may further provide information relevant to promoting local and regional food systems, creating new market opportunities (including for value-added agriculture and value-added products), advancing efforts to transform the food system, meeting the needs of the agricultural workforce, supporting and promoting consumers' nutrition security, particularly for low-income populations, and supporting the needs of underserved and small to mid-sized producers and processors.

FR notice: https://www.federalregister.gov/d/2022-05669
Extension of comment period: https://www.federalregister.gov/d/2022-10449
 
2) Competition and the IP System: Seeds and Other Agricultural Inputs
 
E.O. 14036 directs Secretary to help ensure that the intellectual property system, while incentivizing innovation, does not also unnecessarily reduce competition in seed and other input markets beyond that reasonably contemplated by the Patent Act, in consultation with the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, submit a report to the Chair of the White House Competition Council, enumerating and describing any relevant concerns of the Department of Agriculture and strategies for addressing those concerns across intellectual property, antitrust, and other relevant laws.

The Department takes note of wide-ranging concerns from agricultural producers regarding concentrated market power in the agricultural input industries and their connections to the intellectual property system. . . .

A healthy IP system plays an important role in facilitating that research. The introduction of GM seeds have generally been accompanied by higher productivity. Moreover, R&D spending and new variety introductions by the private seed industry has generally grown in recent decades. Given that global demand for food is expected to double in the next 30 years, while public funding for research and advancements in agriculture, food and nutrition have flatlined or declined over the past decade, it is important to ensure that private sector research continues to support innovations in development of seed genetics, chemical controls, and crop characteristics.

Yet there are also developments in the research landscape that should raise concerns. For example, small and medium-sized enterprises (SMEs), which have historically served as primary sources of innovation, face barriers to entry. Some segments, such as organic seeds, also remain underserved.

Seeds and their corollary pesticide products are not the only agricultural inputs where control over intellectual property may intersect with concerns around concentration and competition. The IP system is relevant to control over animal genetics in livestock and poultry, farm machinery and precision technology and data, and more.

USDA is interested in all relevant comments on the topics noted above. We are particularly interested in what effects various forms of IP, such as patents, have on small to mid-sized seed businesses and plant breeding programs. Other important input markets include those for equipment; fertilizer; feed; pest control; chemical management agents; animal breeding and genetics; storage and transportation; hatcheries; or pre-farm markets, including farm input derivatives, processing, trading, and financing.

We are further interested in comments addressing the role of fair and competitive markets in promoting local and regional food systems, creating new market opportunities (including for value-added agriculture and value-added products), advancing efforts to transform the food system, meeting the needs of the agricultural workforce, supporting and promoting consumers' nutrition security, particularly for low-income populations, and supporting the needs of underserved and small to mid-sized producers and processors.

FR notice: https://www.federalregister.gov/d/2022-05667
Extension of comment period: https://www.federalregister.gov/d/2022-10450
 
3)  Access to Fertilizer: Competition and Supply Chain Concerns
 
The Secretary takes note of wide-ranging concerns from agricultural producers regarding concentrated market power in the fertilizer industries. Farmers depend on nitrogen, phosphate, and potassium (potash) which are key nutrients in manufactured fertilizer. A handful of fertilizer companies control the channels through which farmers obtain these nutrients to raise a productive crop. In turn, these crops may supply inputs for other agricultural production enterprises, like livestock. . . .

Increasing concentration exposes farmers to a range of pricing-related risks. Fertilizers, especially nitrogen (N) nutrients, are already in the top three costs for farmers. Fertilizer costs may swing dramatically up because of individual or layered world events such as strong global demand for agricultural commodities, rising energy prices, export restrictions by major global suppliers, trade sanctions, or war as with the recent Russian invasion of Ukraine. Price volatilities may stem from a small number of firms controlling the few channels for production, transportation, and distribution, which may give them the market power to, among other harms, raise costs for farmers. . . .

USDA seeks information to assist us in identifying and addressing competition-related challenges in the U.S. fertilizer market and other obstacles to producers accessing affordable, responsibly manufactured fertilizer. We are further interested in comments as to how the matters raised may be relevant to promoting fair and competitive markets and local and regional food systems, creating new market opportunities (including for value-added agriculture and value-added products), advancing efforts to transform the food system, meeting the needs of the agricultural workforce, supporting and promoting consumers' nutrition security, particularly for low-income populations, supporting the needs of small to mid-sized and underserved producers and processors, and advancing environmental stewardship.

FR notice: https://www.federalregister.gov/d/2022-05670
Extension of comment period to July 15: https://www.federalregister.gov/d/2022-12821

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