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Antitrust and competition in America's heartland.

On behalf of the University of South Dakota School of Law, the South Dakota Law Review, and myself, I would like to welcome you to the annual Symposium issue of the Law Review. Each year, the South Dakota Law Review selects a topic based on timeliness, importance to legal scholarship, a lack of significant scholarship on the topic, and the importance of the topic to South Dakota and the region. This year, the chosen topic merges the worlds of antitrust law and agriculture, bringing together legal scholars and practitioners from both fields to discuss "Antitrust and Competition in America's Heartland."

An academic discussion on antitrust in agriculture and new approaches to antitrust could not happen at a better time. Farmers and ranchers throughout South Dakota and the rest of America's heartland increasingly are experiencing feelings of economic powerlessness. At the Symposium event, David Balto distributed a National Farmers Union handout showing that a farmer today receives only $0.18 for a loaf of bread that retails for $2.99; $2.00 for a pound of top sirloin steak that sells for $7.99; and $1.67 for a gallon of milk that sells for $4.12 at the grocery store. Bill Bullard similarly showed how by 2010, four firms had come to control 85% of America's meatpacking industry. One result has been a precipitous loss of independent livestock operators.

Seemingly responding to these pressures on farmers and ranchers, in 2010, the U.S. Department of Agriculture and the U.S. Department of Justice held five joint public workshops on agriculture and antitrust enforcement. (1) The two agencies set out to the heartland to listen to comments from stakeholders on competition in agriculture markets. Unfortunately, these public workshops did not lead to any firm changes in policy from the Department of Agriculture or the Department of Justice. One of the goals of this Symposium is to continue to push for reevaluation of antitrust law and policy, particularly in the area of agriculture.

The University of South Dakota School of Law is the perfect venue for such a symposium. South Dakota played a leading role in the progressive agricultural revolution in the late nineteenth century that led to the passage of the Sherman Act in 1890 and the Clayton and Federal Trade Commission Acts in 1914. Indeed, South Dakota passed its own state antitrust law during the first month of its statehood. (2)

Today, South Dakota's agricultural producers continue to contribute impressively to America's economy. According to the U.S. Department of Commerce, agriculture, forestry, fishing, and hunting collectively accounted for 10.88% of South Dakota's gross domestic product in 2011. (3) This amounts to $4.368 billion in annual economic activity. (4) Consequently, discussing antitrust and competition in agriculture and antitrust policy has significant implications for the well-being of South Dakotans and Midwesterners.

The importance and need for timely legal scholarship on the subject is illustrated by the quality of people we have been privileged to work with on the Symposium. In conjunction with this issue, a day of lectures was presented on March 15, 2013 at the School of Law.

The first panel was on Antitrust and Competition Issues in America's Heartland. I moderated the panel, which included David A. Balto, a public interest lawyer in Washington, D.C.; Bill Bullard, CEO of Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America; Peter C. Carstensen, Professor of Law at the University of Wisconsin Law School; and Dr. Diana Moss, Vice President and Director of the American Antitrust Institute. (5) Topics of discussion included the intersection of antitrust and intellectual property, especially with genetically modified crops, issues of market control and price manipulation by major agricultural firms and meatpackers, and the current state of antitrust law in relation to agriculture in America's heartland.

The afternoon session was on New Approaches to Antitrust and Their Potential Implications for America's Heartland. I presented on the panel along with Dr. James W. Brock, the Bill R. Moeckel Professor of Economics at Miami University of Ohio; Milton A. Marquis, a partner at Dickstein Shapiro LLP in Washington D.C.; and Maurice E. Stucke, Associate Professor of Law at the University of Tennessee College of Law. (6) Among the topics discussed were state liberty to pass and enforce antitrust laws, the issues of monopsony in antitrust law, the application of biological and evolutionary theory in antitrust, and a conservative economic case for increased antitrust enforcement.

We are proud to present five articles, which will illuminate this discussion and hopefully spark new consideration of the issues they contain. These articles also contain the essence of the discussions held this past March.

In Economic Power, Henry Simons and A Lost Antitrust Vision of Economic Conservatism, Dr. Brock lays out the powerful case he made at the symposium. He articulates the challenges that concentrated private economic power presents to a free economy and free society. Particularly in light of the too big to fail phenomenon, antitrust policy must seek to prevent the dangerous concentration of economic power. This presents a new paradigm for antitrust policy.

Agricultural Cooperatives and the Law: Obsolete Statutes in a Dynamic Economy examines the history and current structure of cooperatives and the laws governing them. Professor Carstensen makes a strong case for reform of the laws surrounding cooperatives, as they have grown well past the original intentions of the early twentieth century laws created to enable cooperatives. Even though legislation through Congress may not be possible, a judicial reinterpretation of these laws could reign in many of the problems in these new, massively scaled cooperatives.

In The Failure of Corporate Governance Standards and Antitrust Compliance, Professor Jesse W. Markham, Jr., Marshall P. Madison Professor of Law at the University of San Francisco School of Law, explores the role of corporate governance standards in antitrust enforcement. The incentive of high profits from antitrust violation must correspond to equally high sanctions for violations. Yet, those who are in a position of corporate governance to prevent such violations are insulated from the current penalties in antitrust enforcement. By changing the fiduciary duty standards, Professor Markham argues, antitrust law can create more compliance with the law to coexist with the existing enforcement only model.

Dr. Moss discusses issues of transgenic crops in Competition and Transgenic Seed." Framing the Economic Debate. She argues for a new framework when it comes to transgenic seed. Intellectual property law and antitrust law are unable to properly address the issues in the field, particularly high market concentration and single firm dominance. The issue calls for a unified policy that would balance both fields of law, in addition to legislative responses to these emerging issues.

Finally, in Under Siege: The U.S. Live Cattle Industry, Mr. Bullard gives a producer's take on the concentrations in the meat packing industry. With a twentieth century legal framework and loosened antitrust laws, he argues that the meatpackers have gained control of the supply chain in the beef industry. This concentration of economic power has put extreme pressure on cattle producers, and more importantly, the economic power has produced the ability to keep political power to continue meatpacker dominance of the industry. Multiple steps must be taken to correct this level of concentration in this industry.

These articles are a vital starting point for a new beginning in agricultural antitrust policy. The ideas are vibrant and exciting, and can be brought into fields beyond agriculture. I hope that this issue will prompt consideration of not just agricultural antitrust policy, but the overall antitrust policy in the nation. Reprising their leadership role in the late nineteenth century, South Dakota and America's heartland can offer a new, broader vision of antitrust and competition policy for this century.

(1.) Agriculture and Antitrust Enforcement Issues in Our 21st Century Economy, ANTITRUST DIV., U.S. DOJ, http://www.justice.gov/atr/public/workshops/ag2010/index.html (last visited Apr. 3, 2013).

(2.) See 1890 S.D. Sess. Laws 323.

(3.) Interactive Data." Regional Data: GDP & Personal Income, BUREAU OF ECON. ANALYSIS. U.S. DEP'T OF COMMERCE, http://www.bea.gov/iTable/index_regional.cfm (Select "Begin Using the Data"; then select "Gross domestic product" under "GROSS DOMESTIC PRODUCT BY STATE"; then select "NAICS (1997 forward)"; then select "All Industries"; then select "South Dakota"; then select "2011") (last updated June 5, 2012).

(4.) Id.

(5.) For full biographies of participants as well as further information on the topic, see Darla Jackson & Candice Spurlin, Antitrust & Competition in Agricultural Markets, MCKUSICK LAW LIBRARY, UNIV. OF S.D. SCH. OF LAW, http://libguides.law.usd.edu/content.php?pid=434233&sid=3 553129 (last updated Apr. 12, 2013.)

(6.) Id.

THOMAS J. HORTON ([dagger])

([dagger]) Associate Professor at the University of South Dakota School of Law and Johnson, Heidepriem & Abdallah Trial Advocacy Fellow. The author wishes to thank the members of the South Dakota Law Review for their assiduous efforts and especially thank Nathan Chicoine and Jeff Schaefer for all of their excellent help and support.
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Author:Horton, Thomas J.
Publication:South Dakota Law Review
Date:Sep 22, 2013
Words:1497
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