September 11, 2010
A very small number of mega meatpackers and poultry processors have come to dominate the poultry and livestock industry. For years, USDA has looked the other way as packers and integrators ignored the law and engaged in price manipulation and unfair trade practices making it impossible for farmers, ranchers and poultry growers to get a fair shake in the market.
In June, however, there was a sea change. The Grain Inspection Packers and Stockyards Administration (GIPSA) issued new rules that define and prohibit some of the worst corporate practices in the livestock industry.
As you might imagine, the reaction of the multinational meat packers and poultry processors has been fierce. They are squealing like stuck hogs to Congress and to the USDA in an all-out effort to get USDA to kill or severely weaken the rules. For years, they have used their monopolistic power to hold up family farmers and ranchers and in this fight they’re not about to play fair.
We need to send a strong message to USDA: Don’t weaken the rules!
Stand up to their blatant untruths about their practices and the impact of these new rules on family farm agriculture. They want to retain full corporate control over contract terms and prices. Don’t let them do it.
Take Action – Send a Message to USDA
Let USDA know that we need rules that curb corporate control over livestock and poultry markets. We need rules that foster fair prices for farmers and ample opportunities for farmers and ranchers to pursue value-added products that respond to consumer demand for high quality food. Aggressive enforcement of the Packers and Stockyards Act is essential to these aims. This is an historic opportunity to make a major structural transformation within the U.S. food and agriculture system. Winning this fight will establish a new progressive baseline for further changes in competition policy and agricultural policy in general.
For beef and pork producers the rules should:
For poultry producers the rules should foster fair contracts that:
Packers and integrators use their market power to manipulate prices paid to livestock producers and contract terms to poultry producers and increasingly to livestock producers.
The Packers and Stockyards Act of 1921 makes it unlawful for meat and poultry packers and processors and companies that contract with farmers to raise hogs and poultry from engaging in any “unfair, unjustly discriminatory, or deceptive practice or device,” or to “make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect.”
But until now, USDA has never issued the regulations necessary to define these broad prohibitions in order to adequately enforce the protections for livestock and poultry farmers. That changed because in the 2008 Farm Bill, Congress voted to include directives to USDA to issue the regulations to define these prohibitions. In addition, Congress told USDA to clarify how the Act should be applied to give individual farmers and ranchers a fair shake when dealing with the large corporate entities that control our nation’s meat and poultry processing. The proposed rule does exactly what the Farm Bill directed USDA to do.
In addition, for both livestock and poultry farmers and ranchers, the proposed rule would clarify that when a farmer or rancher shows individual harm because of unfair or deceptive practices by livestock and poultry processors, the farmer and rancher does not also need to a show harm to competition throughout the livestock or poultry market. USDA has the authority under the Packer & Stockyards Act to clarify for the courts that farmers and ranchers do not need to show this “competitive injury” to the market as a whole, in order have the legal protections for fair play provided under the Packers and Stockyards Act.