Farm, ranch groups praise Biden competition order
Farm and ranch groups on Friday, July 9, praised President Biden’s executive order on competition that covers concentration in the agriculture industries and owners’ “right to repair” their own machines, including farm equipment.
The exceptions were the North American Meat Institute, which represents packers and processors, the National Pork Producers Council and the National Chicken Council.
The Democratic-leaning National Farmers Union noted that the order “includes 72 directives that will be carried out by 12 federal agencies, many of which target the agricultural sector.”
“For instance, it advises the U.S. Department of Agriculture to offer livestock farmers greater recourse against corporations when they are treated unfairly, restructure the inequitable system that determines poultry growers’ wages, and prevent corporations from retaliating against farmers who speak out about discriminatory conduct.
“It would also give farmers the right to repair their equipment — which many companies currently restrict — limit ‘Product of USA’ labels strictly to meat raised domestically, and support the development of local and regional food systems.”
National Farmers Union President Rob Larew said, “Over the last 50 years, we’ve seen dramatic consolidation in the agriculture industry, with just a handful of corporations seizing control over each link in the food supply chain.”
“It’s no coincidence that this has coincided with a slew of problems for farmers: low prices, little bargaining power, few choices, misleading labels, and the inability to repair their own equipment, among other headaches.
“If that weren’t enough, extreme concentration has also made our food system extremely vulnerable to disruptions and bottlenecks, as has become abundantly clear recently in the wake of extreme weather events, the pandemic, and cyberattacks.
“After suffering corporate abuse for so many years, it is reassuring that farmers may finally get a level playing field. This executive order will offer them more autonomy in their relationships with corporations, protections from mistreatment, fairer and more accurate labeling, the right to repair their machinery, and more robust local markets — which, taken together, will go a long way towards building the resilient, equitable food system that farmers and consumers deserve,” Larew said.
“We urge the administration to swiftly implement these changes and follow up with strong antitrust enforcement.”
MARKET FAIRNESS
Zippy Duvall, president of the Republican-leaning American Farm Bureau Federation was guarded in his statement, but still praised the effort.
“AFBF notes President Biden’s effort to address several pressing issues facing America’s farmers and ranchers comes at a time when many in the farm supply chain are frustrated,” Duvall said.
“Growing concern about livestock market fairness is accelerated by the continued rise in grocery store meat prices while ranchers struggle to break even on the cattle they raise and poultry farmers being locked into agreements with very little recourse if they’re underpaid. It’s time to get to the bottom of what’s driving these imbalances. More opportunities for farmers and ranchers to sell their products will ensure they are paid fairly while providing more options for America’s families.
“Farmers increasingly rely on the latest technology as they grow healthy, affordable food. Business purchases — from robotic milkers to high-tech combines — require a substantial investment, and when those tools break down farmers need to get back up and running quickly. Limiting who can work on a piece of machinery drives up costs and increases down-time. Ensuring farmers have the ability to perform cost-effective repairs on their own equipment will keep America’s farms running and financially sustainable.”
“We will closely examine the details of this executive order as we continue to work with the administration to ensure changes are consistent with our grassroots policy, and farmers and ranchers are provided greater flexibility to remain competitive in our growing economy.”
Farm Aid, the group started by singer Willie Nelson to support small farmers, said it supports the redefinition of “Product of the USA,” the plan to increase opportunities for farmers to access markets and receive a fair return, and encouraging the FTC to limit “powerful equipment manufacturers from restricting the right to repair.”
TAKING ACTION
Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America CEO Bill Bullard said, “We’ve urged administration after administration for the past 20 years to begin proper enforcement of both antitrust laws and the 100-year-old Packers and Stockyards Act and this is the first administration to actually take action.”
The order calls for full enforcement of antitrust laws to confront corporate power. Among its 72 initiatives are specific provisions that address the U.S. cattle market, which Bullard says is among the most concentrated markets in the U.S. economy.
The provisions of particular interest to cattle producers direct USDA to promulgate rules to fully deploy the Packers and Stockyards Act, in part by specifying packer conduct that would violate the act’s prohibitions against unfair, deceptive, and unjustly discriminatory practices.
Bullard says it also directs USDA to write rules to clarify that individual livestock producers do not, in every case, have to prove injury to competition in order to seek protections under the P&S Act.
“If these rules are brought to fruition, they will go a long way toward rebalancing the disparate market power between the highly concentrated beef packers and the widely disaggregated independent cattle feeders, backgrounders, stockers and cow/calf producers,” he said.
Bullard also noted that the order directs USDA to address the “Product of the USA” label. R-CALF USA has campaigned for years for strict country-of-origin labeling for red meat and Bullard said, “We look forward to working with the administration on this important issue to ensure that when Congress reinstates mandatory country of origin labeling for all beef sold in America, both the federal rules and the federal statute complement each other.”
United States Cattlemen’s Association President Brooke Miller said, “USCA applauds President Biden for hearing the calls from cattle country regarding increased consolidation in the U.S. cattle industry, and then issuing his own call for prompt action within his administration.”
“A centralized food system is a threat to our national security. USCA believes in pushing forth policy solutions that strengthen the bottom lines of U.S. agricultural producers in order to strengthen our nation’s food security. President Biden’s executive order is an important step towards restoring a fair and equitable food system.”
National Cattlemen’s Beef Association Vice President of Government Affairs Ethan Lane said, “We thank President Biden and Secretary Vilsack for the leadership and swift action they’ve shown on some of the top issues impacting our producers, including ‘Product of the USA’ labeling and grants to expand regional, independent processing capacity.”
“Today’s executive order is a vital next step toward securing a steady beef supply chain, and increasing opportunities for profitability for our producers. We have actively engaged the administration on these issues thus far, and we will continue to advocate for the needs of American cattle producers as the rulemaking processes begin.”
NCBA has also endorsed a rewrite of the “Product of the USA” label, which allows the inclusion of foreign meat if it is processed in the United States. NCBA has proposed that the label be changed to say that meat was processed in the United States.
NCBA cited provisions “specifically aimed at key concerns in the cattle and beef industry,” including:
▪ Directs USDA to consider issuing new rules defining the “Product of the USA” label on beef so consumers have accurate, transparent information at the grocery store.
▪ Directs USDA to develop a plan to increase opportunities for producers to sell their product in fair, transparent, and competitive markets.
▪ Directs USDA to consider issuing new rules under the Packers and Stockyards Act, making it easier for producers to bring claims.
Family Farm Action Alliance President Joe Maxwell said, “We thank President Biden for his bold and decisive actions today on behalf of family farmers and the American people.”
“Family Farm Action Alliance and other food and farm organizations have worked tirelessly for the changes Biden has ordered. Not since Teddy Roosevelt and Franklin D. Roosevelt has a president taken on corporate power to this extent. This will likely be Biden’s legacy as it was theirs.”
Maxwell praised the FTC’s recent decision to codify its “Made in the USA” role and USDA’s decision to reexamine the “Product of the USA” meat label.
“In tandem, both labeling rules will protect honest companies and consumers from the misleading practices of meatpacking companies. Thanks to bold actions like these, the balance of power in our food and agriculture system is tipping toward farmers, ranchers, and the American people,” Maxwell added.
Organization for Competitive Markets President Vaughn Meyer said, “These Biden administration directives will initiate long-overdue support for producer rights in marketing and consumer choices at the marketplace.”
“The president’s order coupled with Agriculture Secretary Thomas Vilsack’s commitment to invest $500 million for new independent packing infrastructure signals a new beginning in marketing fairness for livestock producers and breaking up the current corporate stranglehold on American agriculture.”
In addition to the competition orders, Meyer noted that Biden also encourages the Federal Trade Commission to limit powerful equipment manufacturers from restricting people’s ability to use independent repair shops or do DIY repairs —such as when tractor companies block farmers from repairing their own tractors.
“These Biden administration directives and committed resources for rebuilding infrastructure and strengthening producer’s rights in marketing are long overdue and OCM stands ready to assist in the fruition of these platforms for returning fairness to our industry,” Meyer said.
THE OPPOSITION
But North American Meat Institute President and CEO Julie Anna Potts said, “Government intervention in the market will increase the cost of food for consumers at a time when many are still suffering from the economic consequences of the pandemic.”
“These proposed changes will open the floodgates for litigation that will ultimately limit livestock producers’ ability to market their livestock as they choose. These proposals have been considered and rejected before and they are counter to the precedent set in eight federal appellate circuits.
“Meat and poultry markets are dynamic, a fact highlighted by the recent challenges attributable to labor shortages and the COVID pandemic and not market structure.
“The members of the Meat Institute — and their livestock suppliers — benefit from, and depend on, a fair, transparent and competitive market.
“The North American Meat Institute is prepared to discuss these issues and work with the administration and the Congress on the issues facing the industry.”
“Part of the executive order is a USDA review of the ‘Product of USA’ label. The Meat Institute will participate in the rulemaking process.”
The National Pork Producers Council said, “It would be premature to comment until specific rules have been proposed and we’ve had a chance to evaluate the potential economic and legal impacts on producers.”
“Generally, NPPC opposes any regulations that interfere with pork producer rights to freely enter contractual business relationships and wants to ensure that policy geared towards competition does not have unintended market consequences.
“The U.S. pork industry has enjoyed healthy levels of competition in recent years with many hog farmers taking ownership interests in pork packing plants. That’s why we remain concerned with a federal court ruling that recently struck down line speed provisions of the USDA’s New Swine Inspection System.
“This ruling, which went into effect on June 30, could result in a loss of national pork industry harvest capacity of 2.5% with regional impacts in states such as Michigan as high as 25% according to Iowa State University economist Dermot Hayes.
“This loss of capacity likely will lead to increased pork industry concentration and greater packer leverage in the market. NPPC urges the administration to appeal this damaging ruling and seek waivers for the impacted plants until a longer-term solution, acceptable to all industry stakeholders, is realized.”
Campaign for Contract Agriculture Reform Policy Director Steve Etka said that the executive order directs USDA to publish a package of three Packers and Stockyards Act regulations, to update and complete the work that President Obama started in 2010 through the Farmer Fair Practices rules.
Those rules include:
1. A rule clarifying that a demonstration of harm to competition is not always required to prove a violation of the farmer protection parts of the Packers and Stockyards Act. If a meatpacker or poultry company abuses a farmer by using deceptive, unfair, or unduly preferential practices, the statute does not require the farmer to demonstrate that the harm they suffered also harms competition throughout the entire sector.
2. A rule to implement reforms to the payment system, deceptively called the “tournament” system, used by poultry companies to pay contract poultry growers. Reforms are needed because the current system unfairly shifts risk away onto poultry growers, and pays them based on the variable quality of inputs provided by the poultry company and out of the control of the grower.
3. A rule to provide more clarity about what meatpacker, swine contractor or poultry company conduct will be considered illegal under the Packers and Stockyards Act.
“President Trump halted progress on all of the rules, and instead finalized a rule to provide legal safe harbors for meatpackers, swine contractors and poultry companies to continue using unfair and abusive practices with impunity,” Etka said.
“Today’s action shows that the interest in addressing the harms suffered by the nation’s livestock and poultry farmers goes all the way to the top, to the president himself. This gives Secretary Vilsack the clear green light to perfect and finalize the work he started on these issues during the Obama administration.”
National Chicken Council President Mike Brown said, “While we haven’t seen any proposals, for the chicken industry, this looks like a solution in search of a problem. The chicken industry is a model of success — from farm to table — and one of the least consolidated industries in animal agriculture.”
“The vast majority of chicken farmers are thriving helping to produce America’s number one protein. In fact, chicken companies have waiting lists of potential family farms that want to partner with them and enter into the chicken business.
“This is a surprising announcement from the administration, given President Biden’s long history of support for the chicken industry, stemming from his 30 plus years as a senator representing Delaware, a state where chickens outnumber people and where chicken is the number one agricultural commodity.
“We will work to bring the concerns of chicken producers in Delaware and nationally to the attention of the president and his team and we look forward to working with them when the proposals are available.
“With regard to Product of USA labeling issues, USDA AMS regulations already require that chicken sold at retail clearly and accurately identify the product’s country of origin. Consumers seeking USA chicken can already find the ‘Hatched, Raised & Processed in the U.S.’ label on American chicken. More than 99% of the chicken we consume is of domestic origin and can easily be identified. We hope that this trusted and accurate label is not diminished for the American consumer.”
