The Packers & Stockyards Act was enacted in 1921 to ensure open, competitive livestock markets and protect producers’ interests from exercise of excessive market power by meatpackers. We’re asking for your help to ensure the original intent of this Act is enforced.
At the time of its passage, the Act was considered the strongest anti-trust law ever enacted. However, court rulings in the last few decades have weakened the law and made it difficult for producers to address unfair market control or even to fight outright retaliation.
FARFA worked with a national coalition of organizations representing independent livestock and poultry producers and consumers to enact reforms to stop price fixing and restore fair competition. In the 2008 Farm Bill, Congress directed the USDA to close the loopholes in the Act to ensure fair competition for family farmers and ranchers.
The Obama Administration proposed rules that, although not perfect, had a lot of good provisions. But then the meatpackers convinced Congress to cut off funding for USDA to finalize those rules, and they languished until the 2016 election.
In January, the Trump Administration announced its plan to do a new rulemaking under the Packers & Stockyards Act.
Frankly, USDA’s new proposed rule is a farce. Instead of addressing the bad court rulings and implementing the original intent of the Act, the proposed rule adopts the very things we have been fighting against! The proposed rule would make it extremely unlikely that farmers and ranchers could ever win a complaint against unfair and anti-competitive practices by meatpackers.
Today we have fewer packers (4) who control more of the market (84%) than we did when the Act was adopted nearly 100 years ago. Without strong rules, we don’t actually have a functioning free market – we have markets manipulated and controlled by oligopolies.
The deadline for submitting comments is Friday, March 13. (FARFA and other groups asked for an extension of the public comment period, but USDA denied that.) Join us in telling the USDA to stand up for ranchers and rural communities by putting real teeth into the Packers & Stockyards Act!
You can submit your comment online HERE.
Comments do not need to be lengthy or formal. Even a couple sentences explaining your thoughts on a proposed rule will be taken into account. One option is to open with a statement on why you’re interested in this issue (as a consumer, a farmer, a free market proponent, etc.) and then borrow from the sample comment below.
Competitive markets are the heart of a capitalist system. The lack of competition in the current livestock and poultry markets, along with the lack of readily available information, means that our market system cannot properly function. USDA needs to adopt rules that ensure proper functioning of the market.
The proposed rule needs several amendments:
- The agency should add a provision that states that an action by a meatpacker does not have to be found to adversely affect competition in order to be illegal. For example, a dishonest packer that fixes scales in order to pay producers less does not harm the entire industry but should be prosecuted and stopped. Allowing companies to continue dishonest practices just because the producer cannot prove harm to the industry as a whole is akin to saying that theft is okay as long as it us only from one or two people.
- The agency should include a provision to protect whistleblowers from retaliation when they speak up about unethical or illegal actions by meatpackers.
- The proposed rule should not allow packers to justify their practices based on what is common or accepted in the industry. The lack of effective enforcement of antitrust law for the last several decades means that many of the current common practices are discriminatory and unreasonable. The proposal to allow companies to continue such practices just because they are common not only undermines the intent of the Packers & Stockyards Act, but encourages the companies to collude with each other to implement even worse practices.
I urge the USDA to make these changes to provide at least basic protections against price fixing and unfair competition.
For decades, a federal law called the Packers & Stockyards Act protected America’s farmers and ranchers from abusive monopoly power in the livestock industry. The courts began to water down this law in the 1980s, giving a handful of corporations unprecedented control over meat and poultry production. As a result, farmers and ranchers are the victims of price-fixing, collusion, and predatory contracts. Cattle, poultry and hog farmers and ranchers are going out of business while corporations like JBS, Smithfield, and Tyson Foods extract record profits from producers and consumers alike.
On January 13, 2020, the USDA’s Agricultural Marketing Service (AMS) released its proposed rule under the Packers & Stockyards Act (PSA). This proposed rule differs significantly from a previous version released in 2016 by the now-defunct Grain Inspection, Packers and Stockyards Administration (GIPSA). In 2017, USDA threw out the 2016 proposed rule and dismantled the GIPSA office, delegating rule-making authority over the PSA to AMS.
We supported the 2016 version of the rule, which was the result of a thorough and thoughtful 10-year process during which over 60,000 public comments were taken into consideration. Unfortunately, the latest proposed draft fails to offer genuine protections for real farmers and ranchers who are suffering from the very real abuses perpetrated by extremely powerful corporations. Read more about competitive markets at https://www.farmaid.org/issues/corporate-power/