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UPDATE 1-US pledges to probe, bust agribusiness monopolies
* Special focus on patent law misuse
* Attorney General cites "historic era of enforcement"
* Monsanto defends high seed prices
(Adds comments, details)
By Carey Gillam
ANKENY, Iowa, March 12 (Reuters) - Two U.S. cabinet members and other top officials on Friday pledged a thorough examination of allegations that monopolistic practices in agriculture are driving small farmers out of business and said they would aggressively enforce antitrust laws.
As farmers and other critics of corporate agriculture called for a government crackdown on agribusiness monopolies, U.S. Attorney General Eric Holder and Agriculture Secretary Tom Vilsack promised to usher in more stringent oversight of agriculture.
Addressing a standing-room-only crowd at a college auditorium in Iowa, the cabinet members said they recognized several key components of agriculture were concentrated into a few corporate hands, though they need to determine how that helps or hinders farmers overall.
Holder told the crowd of farmers, labor and consumer groups and corporate representatives that the Justice Department sees erosion of competitive markets as a significant threat to the U.S. economy, thus a national security matter.
"We want everybody to have a fair shot," said Holder. "Big is not necessarily bad, but big can be bad if power that comes from being big is misused. That is simply not something that this Department of Justice is going to stand for."
Friday's meeting in Ankeny, Iowa, was the first of a series of five such gatherings the federal agencies are holding around the United States to examine complaints about concentration in the seed, livestock and dairy industries.
The day-long meeting is organized as a forum for farmers, academics, corporate officials and consumer groups to voice their concerns to federal officials.
"What farmers need is opportunity that needs to be free of the corporations that control so much of the industry," said Iowa farmer Ken Fawcett told federal officials at the forum. "Corporations decide too much."
The joint Justice Department/USDA meeting in Iowa, the top U.S. corn-growing state, was focused in part on complaints about leading seed company Monsanto (MON.N). Critics say the company has gained sweeping control of the corn and soybean seed markets, driving up prices and its profits by buying up independent seed companies, patenting seed traits and inducing dealers to promote Monsanto products over rivals.
American Antitrust Institute Vice President Diana Moss said there was no question that Monsanto enjoyed a monopoly in the seed business.
"It is an inescapable fact," Moss said, describing what she called an "illusion of choice."
Monsanto has denied engaging in any unfair monopolistic practices and said its licensing arrangements foster broad competition.
Monsanto Vice President Jim Tobin told the forum in Iowa that the company has licensed its technology to more than 200 seed companies and was working to help foster use of generic herbicide-resistant soybeans after the company loses its patent on Roundup Ready soybeans in 2014. Tobin said higher prices for the company's seed products are justified by higher seed performance and efficiencies farmers glean from the high-tech seeds.
"That is why we have high market share," Tobin said.
Critics of Monsanto are pushing for U.S. government action, particularly changes in Monsanto's patented control of seed germplasm.
Assistant Attorney General Christine Varney, who oversees antitrust issues for the Justice Department, did not speak directly about Monsanto, but drew applause when she said Justice would vigorously examine any misuse of patent protections to gain monopolies.
She said the antitrust division has appointed investigators with agricultural backgrounds as part of an "unrelenting quest" to ensure a balanced marketplace.
Holder also emphasized the Justice Department's interest in pursuing any misuse of patents as part of an aggressive probe into agriculture.
Holder said that consumers will see a "historic era of enforcement that will grow."
The officials would not comment about specific companies or actions that they may take.
"We are looking to enforce the law vigorously and fairly," Varney said. (Reporting by Carey Gillam; Editing by David Gregorio and Lisa Shumaker)
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