The National Farmers Union is welcoming a new USDA and Federal Trade Commission inquiry into competition concerns in the agricultural equipment market. NFU President Rob Larew says farmers have long raised concerns about consolidation and limited competition. He believes the investigation could help ensure existing antitrust laws are enforced.
“Seeing the coordination between the Department of Agriculture and the FTC on an issue like this is, I think, very encouraging. The other thing I would say is that this is one of these rare bipartisan issues in not only politics, but in agriculture and farm. We know that we’re being squeezed by higher input costs. Everything is more expensive. And one of those factors beyond things like war in Iran is the fact that we have this domination of just a few players. And so we need more competition out there. We have antitrust laws on the books. And so this, to me, signals that the Trump administration is serious about making sure that the laws in the books are enforced and that farmers get a fair shake.”
Larew says many of the concerns stem from the concentration of power among a small number of equipment manufacturers, which he says affects farmers in several ways.
“And one of the ways it does that is the fact it’s really forced a huge consolidation in the dealer network. And look, we all want to make sure that we have really good relationships with our ag equipment dealers and making sure that we have access to the best and the most innovative kind of equipment out there. But the fact is that because of this domination and consolidation, you are now seeing geographic barriers to certain prices. So you might see a piece of equipment be advertised as having a special on it. But because you don’t happen to live in that area, your farm, you have to buy your equipment from somewhere else. That’s really anti-American, in my view.”
The inquiry is still in its early stages, but Larew says history shows there is precedent for federal action when farmers document concerns and bring them to regulators’ attention.
“You know, it wasn’t that many years ago that Farmers Union and some others filed a complaint and comments and spoke to the FTC about problems that we were seeing with John Deere and the right to repair. And that ultimately led to FTC being joined by a number of state attorney generals, took them to court. And then we had the fairly recent decision this year to have a settlement agreement with John Deere that really spelled out the expectations that the government has for John Deere to do better and to ensure that farmers have access to true right to repair.”
For now, USDA and FTC are collecting feedback from farmers. Larew is asking producers to participate in the comment process which closes December 7.
“I would encourage not just Farmers Union members, but anyone who is experiencing problems with ag equipment marketplace to just file an anonymous comment or put down what you’re experiencing out there. Get it to USDA, get it to FTC so that they can have a complete record of what the marketplace looks like. And then I would expect that we will see a report and potentially action against any wrongdoers.”
Similar competition concerns extend into other sectors of ag, including seed and fertilizer. Larew explains market concentration here too, remains a major concern.
“We know that even as markets go down, that all of our costs are going up. And so it always squeezes the margin there. Then you have those added impacts, these so-called geopolitical problems like the war in Iran, like the Ukraine-Russia conflict right now. But on top of that, when you have such a few players, and in fertilizer especially, you have just a couple of players in so many of those markets, that’s a real opportunity for collusion, price fixing, things to extract even more money out of farmers and ranchers. And we’re glad that the government’s going to hold them to account.”