the progressive policy

institute, live coverage on c-span 2. >> and i on? wonderful. welcome everyone. appreciate you coming out today. i am diana moss vice president director of competition policy for the progressive policy

institute. you are at a briefing on keeping the cost of living down. how antitrust enforcement in the food sector can help. we know working american family struggle with the high cost of living, spending on food in the average consumer budget accounts for about a third of everything they spend so it's fake it matters to them. yet our food sectors in the united states supply chains tend to be on the low end of the productivity scale, we are not pushing a lot out of our supply chains. we also have a lot of concentration in our food supply chains we've got a lot of large firms dominating food processing like the pro teams food manufacturing yet we have a lot of producers ranchers and

growers small innovators of genetic traits and we have a lot of theaters or consumers sitting at the bottom of the supply chain. our food supply chain looks like our glasses where we have a lot of producers a lot of consumers but we have a lot of market power sitting in the middle of the supply chain. that's not good for producers who get lower prices for the commodities it's not good for consumers who pay higher prices for commodity it makes for supply chains more fragile and less able to absorb shock like what we are seeing in eggs right now. what we saw during the breakdown of the beef supply chain. we worry about these things we worry about cost of living for working-class americans. we are wondering at p vif antitrust, which is a major policy tool for promoting competition and promoting the interest of consumers to access

to high-quality foodfoods, fairly priced food, high-quality food, having those table supply chains is antitrust doing enough and we don't think it is that the panel is about today. to really focus in on what antitrust could be doing more of so we can help working-class families get their cost of living down. she represents the third district in kansas she was sworn in 20 1916 congress just an amazing record of public service twixt 20 years in the army she has she was jd from cornell she's one of the first two native american limited servicing that congress and she was focusing on all the right issues, she focused on education on community development and and focused on

housing and food all these major areas of spent for working-class americans it's my pleasure to introduce her and invite her to the podium for some remarks.thank you. >> i saw some folks come in there some couples up front if you want. >> we want to get to the panel i'm excited about the work you are all doing. thank you for the introduction i have the honor of having been elected on the first two native american women ever to serve the congress alongside deb collins thank you for the

introduction and everyone at the progressive policy institute for hosting this panel today. i'm really grateful to have the opportunity to get the chance to speak with and hear from such a distinguished panel to discuss the challenges hitting every single family where it really hurts and that's the rising cost of food. it's pretty clear that the whole the goal of our society right now is feeling so much of the squeeze of the pinch of the pain of going to the grocery store and not being sure if you're able to afford enough food for the week. the cost of groceries has certainly skyrocketed. the cost of eggs is up 53

percent sat alone. we see families have tightened their budget at the same time that we are seeing corporate profits in the food sector hitting record highs of the grid hear more about this, that's not by accident. there's been years of market consolidation that have left consumers with fewer choices and higher prices. system is stacked against small businesses and local grocers and everyday americans the ones left paying the price for that. is part of why they have been pushing the ftc the federal trade commission to investigate the laws that are meant to prevent this type of price discrimination like the robinson patman act because right now those are being enforced and we are talking about a law that was designed to ensure fair competition and protect consumers from a large

corporate large corporations driving up the prices. families in kansas and across the country deserve so much better. as a member of congress i do have the opportunity to work on things we can have a direct impact on this stuff we passed the lower food and fuel cost which strengthens competition in the agricultural sector helps idolize some of the prices. and also supported the price gouging prevention act which is aimed at making sure the big corporations aren't able to take advantage of working families at the checkout line i spent time on the ground whether at home hosting roundtable with arkansas businesses with local grocers, the collapse we got in the kansas third or working a shift

of the price chopper which is our grocery store, one of our grocery stores. there are ways we can better understand his problems. this stuff is not just about economics it is of course huge but not just economic it's also about the fairness. every family should be able to afford to put the groceries on the table every night. family should be able to do that without being at the mercy of corporate grief. i think the more of us, it's very encouraging to see so many folks here to listen to and interact with panel because right now we have an administration it's more focused on protecting billing errors and big corporations than they are on lowering costs for hard-working americans.

thank you so much for having me, it was so good to get to visit with you little bit before this i will be able to stay for the panel but i'm positive it's going to be it will be exciting in all the nerdiest ways. thank you so much for the work you all do thank you for joining us today i hope you enjoy the panel. >> those are great framing remarks for the conversation we want to have amongst our catalyst and you on the panel today. very brief introduction they really don't need introduction. john brail is vice president and vp of public policy and telecom at the national consumers league.

john is a long time leading washington dc advocate for consumers working in across areas privacy data food airlines telecommunications, the list goes on we are delighted to have them here today. and agreeing to my right is former senior advisor for fair and competitive markets for the agricultural marketing service at usda. andy was single-handedly responsible for injecting ãi really want to think the two of you for joining us for this conversation. we know how important food is to the average american consumer. just about numbers on what i said earlier, food accounts for about 13 percent some of the consumer's budget, housing is 37 percent some of the consumer budget, transportation 17%.

food inflation rose 5% per year whereas average inflation rose about 2.7% per year. that's about double what consumers were paying for food in the grocery store and restaurant and food service over the last 10 years. obviously price increases can be due to a lot of things, scarcity, opportunistic price gouging but there is a lot of market power in our supply chains, as i noted earlier, especially the middle part of the supply chain. food processing, food manufacturing, market power very little competition and market power in fertilizers and genetic traits. current policies and white house are working to keep the prices up. terrace policies for example will affect a lot of sectors including food, mass deportation policies will

absolutely affect the food in the ad sectors 70% of the workforce in food and add are made up by immigrants. 15 percent some of that is undocumented labor. the current policies we are seeing and a commitment to bring down food prices in august and backpedaling in december of last year saying food prices are really hard to find. we've got a lot of tools in our toolkit we have antitrust enforcement, police mergers, price-fixing agreements to police monopolization in the food supply chain we also have regulatory policy which andy has been very involved in. we have legislative reforms potentially on the table, all which would work together to promote competition in our food

supply chains and protect consumers, however, antitrust in particular has a very mixed record. we had a recent success in the. injunction against robertson merger that's a tremendous success for the federal trade commission. the previous mergers and retail grocery involved vestiges of stores many of which failed. the burden of those higher prices was born on the backs of consumers but we have pretty weak antitrust enforcement and other key parts of the chain. agricultural processing we have meatpackers that account for 85 percent, multiprocessing capability in the united states. we have only three ag biotech technologies that connect ãã these sectors are markets with

very little competition or to produce very high prices input and very high prices ultimately for consumers. there also can hurt our producers ranchers growers small businesses trying introduce and inject competition in the supply chain. when you don't have competition in the supply chain of events like that will cause the supply chain to break. competition serves really important purpose to create robust stable reliable supply chains that can serve all the u.s. consumers and it's a matter not just competition but of national security and health and human safety. with those framing remarks i will invite andy and jamie to

remarks of their own.then we will throw it open to questions for all of you. thank you and welcome john and andy. >> it's great to be here. [inaudible] should i start again? let me just ããin case you couldn't hear me, let me start at the top. i want to underscore andy green

i also want to offer a few thoughts on what we did over the last four years to show the trajectory of where we were going and what you evaluate beyond the trajectory. those are the questions you as congressional staff and your constituents the american people should be thinking and asking. the hourglass that diana talked about in the food and agricultural supply chains is an important image to keep in your head because you have a squeezed bottleneck of the supply chain you have these

bottlenecks that squeeze in part because of decades long nonenforcement of the antitrust laws going back to the reagan-bush era but also because of those middle parts of the supply chain tend to be very heavy capital investments, big slaughterhouse or heavy investments in the technology needed to develop seeds. you have concentration in the middle of the supply chain but on either end of the supply chain as a result of that level of concentration and a result of level of market power and practices that can occur in these markets you have folks that sell into them farmers ranchers plant innovators and

etc., challenged in terms of the fair prices that they get. and you have consumers on the other and. who are challenged with the challenge in terms of accessing fair affordable prices on the other end.so the squeeze in the middle policymakers to think about and work on. i also want to offer that we need to think about these things from a short-term medium-term and long-term perspective. all the different policy tools that are available whether available to the biden harris administration coming out the covid pandemic or whether to you and legislative assistants and others here in congress facing the current challenges need to be thought about in the short-term medium and long-term. let me tell you a little bit about what we did.

let me offer the context of the sense that there are things that you can do in the short term it does not yield the longer-term results. if her facing really challenging high prices and eggs right now making sure usda has a veterinarian snap and the effective implementation of the bird flu protocol. to take care of that challenge to bring that to hold as much as possible is a critical short-term need. you have the short-term tools to address price gouging i would argue and i think the previous ftc chair and others argue that we don't have enough price gouging tools at the federal level to deal with it. is that something that you are bosses can address?

then you might think about medium-term challenges. it could go in there and really be fast enough but address the longer terms medium-term challenges of cartel behavior, collusion, other types of exclusionary and anticompetitive practices that might be in the marketplace that if you think about the long-term challenge long-term solutions these are potentially the areas of investment research and creating new and diverse markets through multiple policy tools. against the context let me talk a little bit about what we did you can see how this fit into the three buckets and addressed both the folks feeding into the bottlenecks and the consumers on the other side.

coming out of the covid pandemic you might remember we had the shells were barren in terms of beef and a number of other products that were really critical. you also probably saw built up shots to all the different supply chains and food and agriculture. and the biden harris took elected called the three prong approach. it's about giving more choices at every stage of the supply chains of the producers farmers and ranchers have more choices to sell into so there are more competitive opportunities in the middle part fewer bottlenecks. and consumers have more transparency and choices to be able to take advantage of all those new opportunities.

we did kind of a three-pronged effort. we took the funds that were provided by congress and the american rescue plan and deploy $1 billion there is more local and regional packers and chicken processors and others in the middle part of the bottleneck so there is more of a choices both for consumers and farmers and ranchers. that's a long-term effort is not, you'll change instantaneously but it's important to lay the groundwork. another thing we immediately dead was stood up the enforcement effort we didn't just do that in the meat and poultry capacity we did it

across the sector. places that lack grocery investing and supporting those opportunities at the retail level. the whole range of food system transformation investment designed to deliver change across the system. glove antitrust and fairmarket competition were greeted , stood up a number of different work streams we renewed our partnership for the department of justice to help bring really critical cases i think we saw

this with the incredible enforcement action against wade anderson that left two significant challenges in the waste chicken producers are paid. we took advantage of this to bring transparency and really some greater fairness in the

critical markets. the last thing i will very briefly mention is, we did a whole number of other efforts to increase transparency, bringing greater new definition a product of usa to meet so consumer when they go to the store and they buy something they know ããthere's a whole bunch more i could talk about in the interest of time i'm gonna stop there and we will get into it during the q&a. >> wonderful, thank you andy. >> are we good? >> thank you diana and p ppi for inviting ncl to come participate in today's event. if you're not familiar with the national consumers league we were founded in 1999 so that makes us we like to say were the oldest consumer advocate but i have to say we are that pioneering consumer

organization. i'm here to provide perspective of the everyday consumer on the impact of what competition policy needs when you go to the grocery store. if you're anything like me you probably live either here in washington dc or the surrounding suburbs so you may not really feel the impacts of consolidation at least in terms of your ability to access food in the way people in much of the rest of the country do. i have farmer markets nearby. where i grew up in rural virginia we had access to one within 15 to 20 minute drive.

vacationed in west irginia. this is something i benefit from as somebody who's fairly well off comparatively when you look into what percentage of folks income we are talking about 32.6% in 2023 after-tax income tax people spelling

countries. they spend 8.1%. what you see is all the impacts consolidation that they been talking about in terms of higher food prices when we talk about these issues and talk about the price of fertilizer and all the inputs i going to this i always try to think about like what is that impact the everyday american who is struggling to make ends meet. is not just a question of how much am i paying for eggs there are also so many other ways we encounter the food industry as americans i have two kids both of them got school lunches so the price at your local schools are paying to for what they're feeding your kids everyday is

similarly going up the cost of what a snap benefit can buy in the marketplace is also impacted by that even if you don't consider yourself someone who has to struggle and budget am i going to get beef instead of chicken. you are impacted by the rising cost of all these inputs. we talk about consolidation the lack of competition one of the bright spots we are talking about antitrust nforcement

it's no surprise those are areas most of us see. where you aren't seeing enforcement in the places it's harder for us to get to for fertilizer, genetics that go into the seed those of the areas we seem to see antitrust supporters not paying as much attention so i think one of the things we are trying to do i'm happy to have partners like ppi and others is making all the inputs all the bottlenecks that aren't readily apparent to everyday consumer the impact of that much more apparent. in addition to the impact of competition not just on inputs seed and gas and we should also

think about the impact of antitrust on labor. we talked about some of the lung nondisclosure agreements i think it's another tool in the toolbox for going after some of the problems. it's easy to dismiss and not be hopeful for the next two years. i saw our reporting this week that said this is a guy who has come down to popular restraint. there's a bigger chance he

might be siding with some of the democratic commissioners to utilize the law. one of the things i would encourage you to do commissioner billy had a great piece about a month ago on robinson patman ends how this is one of the unusual stools enforcement. i would point out another sector highly concentrated many of us experience on a regular basis which is airlines. you can also see unused authority in terms of the competition authority we started to see some green shoots under buttigieg and i think will be pushing secretary duffy to use that enforcement tool to a greater degree than we have seen in recent years. i think it's certainly being felt by everyday americans, particularly those low to moderate income all the impacts of consolidation in a much more

keenly felt way have some optimism or at least allowing myself to feel optimistic that we might have more vigorous enforcement of antitrust and going after some of these issues. we might allow ourselves ãã lex always appreciate the optimism during dark times. >> 㦠>> i want to fire a couple of maybe harder questions that john and andy tease out from the themes that we are seeing. based on what you've heard i don't think you could possibly under appreciate how much concentration there is supply chains. that concentration is really exacerbated by or worsened by

things like one of the top beef packers in the u.s. vertically contracting into capital supply. if you are a packer and you are responsible for harvesting beef and creating boxed beef products are going to grocery stores, you would typically go out and bid for cattle you would have independent ranchers coming to auction. whether an online auction or barn auction and the fair market process would determine the prices those ranchers get paid. that fair market experiment is dwindling away by the day because large packers are they only own paddle.

or farm sector is diminishing rapidly. one solution is to build workarounds to the big industrial supply chains so concentrated that's assuming we don't get any antitrust cases that attempt to break up the beef packing cartel or chicken processing poultry processing cartel. so let's think about policies that do workarounds of smaller regional supply chains. this is a question for andy, how important is this policy initiative and particularly you all how do you think about this how do you get your bosses behind the idea of developing these workarounds and options for consumers and what do we need to do it, he. >>. >> thank you diana, really really important there is

almost so many things embedded in that question let me try to tackle several of them but i'm going to miss a few. one thing i would point out is that if you think about local and regional food systems it from some perspective it's a workaround it's another choice as a way to have more resiliency and flexibility and depth into these markets that otherwise become half over the last 40 years become highly concentrated and highly efficient from a very short-term perspective. but when you look a little bit further out from the short-term to the midterm and long-term that extreme efficiency becomes a lack of resiliency.

so that some of the importance of local and regional food systems. there is also values embedded in our local and regional food system. i was incredibly privileged i come from the securities regulatory world i worked on dodd frank and not deep antitrust farm person i was asked to come work on the issues to try to bring fresh thinking. i have the real privilege to go to places that i had not had the opportunity to visit before. i was struck at how important to buy local north dakota local mississippi local kansas, wherever it might be products, oklahoma has a tremendous it

gives the community a chance to be in touch with the earth and their farmers and ranchers and communities. so he would not be surprised that when they put $1 billion into the local food purchase program it's met with a resounding welcome from the states and localities that this has empowered local school district to say we want missouri beef and the hamburgers of our kids. and our hospitals and whatnot. that's a program is a cooperative program you will you might want to ask and make sure this program stays and continues because the procurement to be able to buy and pull through the supply is important to making sure the

local markets are there. there are a lot of i could go on for an hour but i will restrain myself. we have a lot of systems that are built up in agriculture that you would be surprised diana described a world where bidding for the price cattle ought to be in fair open competitive markets. one thinks about betty might think of the new york stock exchange where you have a bunch of equities everybody's there very competitive market we sorta had the equivalent of that when we had the stockyards. but we have another world for 60 years the world has een we

have systems in place so you can be buying and selling bilateral relationships but those trades are contributing to the price discovery and overall liquidity of the entire market. or have we allowed the market to be bifurcated in ways where going to price my cattle like whatever cattle traded in kansas last week that's the price of hundreds of thousands of cattle. if you had an etf sold to you

by, pick your namebrand investment bank or asset manager that price of that etf was not the s&p 500 but whatever the company bought last week on let's imagine the boston stock exchange do you think that company would have any incentives to give you thinking about how we update these markets that was the heart and soul of advanced proposed rulemaking i encourage you as staff to take a look at and read it and have your bosses ask question about what are the next steps. and the last thing i will say, the sales side when we talked about robinson patton the usda has robinson patton authority over the packers and stockyards act. when was the last time it was used?

1984. it's not been used for four decades. unsurprisingly the discrimination and price and anticompetitive and unfair perceptive practices out there we have large sellers of the product trying to extract the most or retailers and distributors. we put out a report based on investigative authorities. in october on access to retail and meet merchandising practices. i encourage you to take a look at it all these under the agricultural marketing service.

were not going back to the stockyards but we can have a competitive fair market if we think and work hard on it. >> going to ask john a question then we are going to throw it open for your questions which are very important. do not be fooled, i'm a vegetarian. for somebody who keeps a vegetarian diet. you can rest assured a canola farmer or soybean farmer operating in north dakota is paying technology fees for genetically modified traits to produce traded herbicide tolerance or in factory resistance see that are

increasingly gouging the farmers margins. what's the difference between the prices they paid, their costs and the prices they get paid for their seed. that's because we have an incredible amount of market power in the ag biotech sector we have three companies that produce all the seeds essentially produced in the world. that means farmers have no

choice. so they have bargaining power against concentrated food supplies. what should in fact be a guiding antitrust policy. why should we allow firms to get larger so they could be bigger better bargainers. >> the answer to market where those who control the bottlenecks are making the most money is and to create more

bottlenecks. and squeezing the balloon fashion you squeeze it more the prices it's going to get bigger places that squeeze. consumers will end up paying for t.

we were talking about the farmers being upset ag buyout but with union pacific. attacked the bottle don't create bottlenecks. >> i want to jump in and say i 100% agree. antitrust is one tool.

most of these agreements we talk about not only are very expensive from the perspective of a farmer they also turnover tremendous amount of the farmers data. all access to the farm without limitation access to the farmers loan programs and data. a number of other privacy and nationals. the regulatory things are somewhat split. mergers and antitrust proceeds

as doj. you fda does not really have antitrust overseas but we do the federal seed act that was nice hundred years ago but today people find their seats online before it even was into yoga disclosure of the kind of variety or by. you can even get the disclosure till it lands on your farm in the magazines. there's a whole bunch of things that can be done we also need

to be investing in new seed research in the same type of things goes on the bird genetics. a lot of places where the signs investments antitrust and fair market although national security concerns only to be brought together and worked on.

>> thank you andy and john. we have given you a very quick peek under the hood of what is a very troubled sector. i think there's room for optimism but a lot of work to do here to promote competition and help consumers pay lower prices for high quality safe food and reliable food supply chain and there is a lot of work to be done for producers in the united states. there is this cry for support of antitrust enforcement from legislation at the federal level in the state level to inject more competition to the supply chains. we have time for some quick questions if anybody would like to raise a hand over here.

>> in addition to of course what you guys are talking about is there any incentives or policy to trying to empower and educate consumers? i come from a family of farmers i grew my own followed year-round to offset a lot of the issues. is there a priority for trying to empower and educate consumers to be a greater reality like we had before all of these. >> i would say labeling is one area from our point of view that we care a lot about it talk about meeting usa label think also more work can be done to try to make help consumers understand what they

food. labeling things as organic when they may not be. labeling things as non-gmo may or may not be. being rigorous in enforcing those laws we've also pushed for international unit pricing lots would get the issue of shrink inflation where companies are increasingly creating smaller packaging and charging price for packaging with a unit pricing would see what it is by ounce or gallon or pound it makes it easier for consumers to compare and find the best deal for them. labeling is one area we haven't talked about think of it can go a long way trying to address the issues. >> let me put in a plug for enforcement. usda packer and stockyards division 20 october 20, 2020 40% decline headcount. i fear based on people calling

new antitrust attorneys being laid off. i'm concerned about the capacity if you're a farmer and you are selling no antibiotics ever chicken or beef you darn well better want the usda food safety inspection service and agricultural marketing service to be effectively rising high standards around those labels because that's your