In this file:
· The Trump administration chose meatpacking giants over farmers in USDA proposal, critics say
... It is part of a decade-long controversy over so-called GIPSA rules... several attempts by the Obama administration to finalize new rules were either blocked by Congress in federal spending bills or withdrawn during the Trump administration by Agriculture Secretary Sonny Perdue — who also eliminated GIPSA as a standalone agency...
· USDA focuses on meat markets
Criteria will test competitiveness
· NFU: Livestock Competition Rule Unlikely to Provide Needed Protections to Farmers
· Perdue sets his marker on meat market fairness
· OCM Condemns Latest GIPSA Rule Iteration
The Trump administration chose meatpacking giants over farmers in USDA proposal, critics say
The latest proposal omits an Obama-era effort that would have made it easier for livestock farmers to win lawsuits against meat processors.
By Catherine Boudreau, POLITICO
Farmers who hoped President Donald Trump would side with them over meatpacking conglomerates were dealt a blow after the Agriculture Department proposed changing rules governing fair competition in the industry.
The latest proposal omits an Obama-era effort that would have made it easier for livestock farmers to win lawsuits against meat processors like JBS or Tyson Foods. For at least a decade, farmers have said there is an impossibly high bar to prove in court that the companies treated them unfairly or discriminated against them.
Critics worry that USDA’s new proposal, unveiled on Friday, would allow certain abuses to continue, like retaliation against contract poultry growers who share complaints with the press or lawmakers.
“Looks completely worthless to me,” said Dudley Butler, a Mississippi lawyer who helped develop USDA’s fair treatment rules during the Obama administration. “It has more holes than a shrimp strainer.”
The proposal follows several other policies issued by the Trump administration that have been attacked for harming family farmers and ranchers. They include a biofuels policy that corn and ethanol producers said undercuts demand for their products to the benefit of oil refiners, and a trade agenda that led China and other countries to slap retaliatory tariffs on a range of U.S. agricultural goods.
A USDA spokesperson did not return a request for comment. The public has 60 days to comment on the proposed rule.
Some 2020 Democratic candidates, like Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.), promise to strengthen antitrust enforcement in the agriculture sector because they say too few companies control the markets for meat, seeds and pesticides. Today, four meatpackers control the majority of cattle, pork and chicken supplies: Tyson Foods, Cargill, Brazilian-owned JBS and Chinese-owned Smithfield.
From 1986 to 2016, the conglomerates' market share rose from 55 percent to 84 percent in beef processing, from 33 percent to 66 percent in pork and from 34 percent to 50 percent in chicken, according to USDA data.
USDA's latest proposal aims to clarify whether actions by meatpackers or swine and poultry dealers give “undue or unreasonable preference or advantages” to one farmer over another. The department outlined four criteria that would help determine whether conduct is so unfair it harms a farmer's success, such as negotiating higher prices with a favored livestock supplier, even if another has a similar product, for no "reasonable business decision."
It is part of a decade-long controversy over so-called GIPSA rules. The 2008 farm bill directed USDA’s Grain Inspection, Packers and Stockyards Administration to strengthen legal protections for contract farmers who said they had little power to challenge the increasingly consolidated meatpacking sector.
But since then, several attempts by the Obama administration to finalize new rules were either blocked by Congress in federal spending bills or withdrawn during the Trump administration by Agriculture Secretary Sonny Perdue — who also eliminated GIPSA as a standalone agency. Perdue shifted its responsibilities under a branch of USDA whose main mission is to promote sales of agricultural goods at home and overseas.
Advocacy groups like the Organization for Competitive Markets, National Farmers Union and Rural Advancement Foundation International say...
USDA focuses on meat markets
Criteria will test competitiveness
by Nathan Owens, Arkansas Democrat Gazette (AR)
Jan 14, 2020
The U.S. Department of Agriculture has introduced a proposal outlining new criteria to determine whether meat producers are being treated unfairly by packers or integrators, raising industry concerns from both sides of the issue.
The proposed rule, published Monday in the Federal Register, specified criteria for the agriculture secretary to consider when determining if a meatpacker, dealer or contract farmer has engaged in activity resulting in "undue or unreasonable preference or advantage" in violation of the Packers and Stockyards Act of 1921.
The rule was established to satisfy provisions of the 2008 Farm Bill. The Obama administration's "GIPSA rule," named after the Grain Inspection, Packers and Stockyards Administration, was proposed in 2010 and 2016 before being withdrawn. The Grain Inspection, Packers and Stockyards Administration has since merged into the USDA's Agricultural Marketing Service.
Industry groups were staunchly against the Obama-era proposal. It would have "opened the floodgates to frivolous and costly litigation," inflicting billion of dollars of economic harm to American agriculture, said National Chicken Council President Mike Brown in the fall of 2017.
Farmers and ranchers, dealing with consolidation in the meatpacking industry, have long been seeking stronger rules, and the move by the Trump administration is a step in the right direction, the National Sustainable Agriculture Coalition said. However, the group added, there is a lot that the proposed rule does not address, such as harm to competition and retaliation or a farmer's right to speak out.
Candace Spencer, a policy specialist with the farm coalition, said she is concerned that the language would judge undue preference by whether or not such behavior can be considered customary for the industry.
"Unfair competition and undue preference has unfortunately become customary for the industry -- that does not mean it should be endorsed," Spencer said in a statement. "In order to ensure this rule is fair and effective for contract farmers, this criterion must be either deleted or heavily revised."
Another farm advocacy group, the Rural Advancement Foundation International-USA, argued that the Trump-era rule is based on business considerations and allows undue or unreasonable industry practices while codifying justification of them in law.
"The criteria laid out in this rule are heavily skewed in favor of large, transnational corporations rather than the farmers and ranchers laboring to produce our food," Edna Rodriguez, executive director of RAFI-USA, said in a statement Monday. "We urge the USDA to take action that balances the distorted power dynamics between farmers and corporations."
Consolidation in the industry has caught the eye of Democratic presidential hopefuls including Bernie Sanders and Elizabeth Warren, who are calling for breaking up big agribusinesses and giving farmers more bargaining power.
Meanwhile, the North American Meat Institute, which represents Tyson Foods, JBS USA and other businesses responsible for the lion's share of America's red meat and poultry, said it will review the proposal...
Livestock Competition Rule Unlikely to Provide Needed Protections to Farmers
Source: National Farmers Union (NFU)
Jan 10, 2020
WASHINGTON – More than two years after failing to finalize a set of rules to protect American family farmers and ranchers from anticompetitive and abusive business practices from the increasingly consolidated meatpacking and processing industries, the U.S. Department of Agriculture (USDA) today released a long-awaited proposed rule that would more clearly define when a company has shown “undue or unreasonable preference or advantages” for one farmer over another.
Though National Farmers Union (NFU) is encouraged by the administration’s efforts to address this issue, the organization is concerned about a provision that would allow customary industry practices to not be considered as an unfair preference or advantage. Lax antitrust enforcement over the past several decades has enabled the poultry and livestock industries to engage in manipulative and discriminatory practices, making those practices customary. As a result, the rule could strengthen the status quo, leaving farmers with little recourse when confronting unfair but typical treatment. It is unclear if the rule’s other provisions will provide needed protections to farmers.
In a statement, NFU President Roger Johnson expressed his apprehension about the rule and encouraged the administration to move forward with greater protections for family farmers and ranchers:
“Family farmers and ranchers have been plagued by corporate consolidation for as long as this organization has existed – but it’s gotten much worse in recent decades. With almost no oversight, just a handful of corporations have taken control of the poultry and livestock markets. This has made for an extremely lopsided relationship between meatpackers and processors and those who sell to them, where the former sets almost all of the terms and the latter has no choice but to accept them. This has left farmers susceptible to substantial discrimination and abuse.
“Though lawmakers have promised greater protections to farmers experiencing unfair treatment, we’ve seen very little in the way of progress. While Congress and the USDA have spun their wheels for more than a decade, farmers have continued to endure anticompetitive practices with few defenses.
“After so many years of inaction, it is encouraging to see this administration take some small steps to level the playing field. However, this rule does not go far enough to safeguard farmers from unfair treatment, nor does it address many of the other difficulties farmers have been suffering at the hands of powerful corporations. In order to provide farmers with the protections they need and deserve, we strongly urge USDA to strengthen its definition of “undue or unreasonable preference” as well as introduce additional rules to ensure fair treatment and competition in the livestock sector.”
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National Farmers Union advocates on behalf of nearly 200,000 American farm families and their communities. We envision a world in which farm families and their communities are respected, valued, and enjoy economic prosperity and social justice.
Learn more about us at NFU.org.
Perdue sets his marker on meat market fairness
Ryan McCrimmon, POLITICO
The Agriculture Department on Friday unveiled a proposed rule that lays out new criteria to determine when action by meatpackers and large livestock dealers creates an unfair business environment for farmers, writes Pro Ag’s Catherine Boudreau. The latest step in the long-running debate over so-called GIPSA rules comes as producers, lawmakers and even presidential candidates have been paying closer attention to anti-competitive practices in agriculture, especially within the meat sector.
How we got here: The 2008 farm bill directed USDA’s Grain Inspection, Packers and Stockyards Administration to beef up protections for contract farmers who supply livestock to meatpackers. As the industry rapidly consolidates, producers say they need more legal options for challenging unfair and discriminatory practices by conglomerates.
— The Obama administration tried repeatedly to finalize such rules, but those proposals were either blocked by Congress or later scrapped by the Trump administration. Agriculture Secretary Sonny Perdue withdrew the latest Obama-era proposal in 2017 shortly after he was sworn in, arguing that it would have opened the door to excessive litigation.
The new plan: Perdue’s proposed rule isn’t as broad as previous efforts. It outlines four factors to determine whether actions by meatpackers is so unfair that it harms a farmer’s success, like negotiating higher prices with a favored livestock supplier for no justifiable business reason.
How it’s playing …
Julie Anna Potts, president of the North American Meat Institute ...
The big picture ...
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OCM Condemns Latest GIPSA Rule Iteration
Source: Organization for Competitive Markets (OCM)
Jan 10, 2020
WASHINGTON, D.C. -- On Monday, January 13, 2020, the Federal Register will publish a proposed rule by the United States Department of Agriculture (USDA) Agricultural Marketing Service (AMS). This rule aims to specify criteria the Secretary of Agriculture would consider when determining whether an undue or unreasonable preference or advantage has occurred in violation of the Packers and Stockyards Act. Upon its initial review of the proposed rule, Organization for Competitive Markets (OCM) issued the following assessment:
USDA fails to own up to its longstanding position that the Packers and Stockyards Act is both an antitrust law and a producer protection law. Unlike the previous iteration of this rule, it fails to set out which actions are unfair, unjustly discriminatory, or deceptive by meat packers and processors. USDA leaves farmers, ranchers, and poultry contract growers under the threat of retaliation for speaking out against any wrong doing of the packer or processor. A particularly gross omission in this proposed rule is restoration of the right of an individual producer to bring a claim without proving competitive harm to the entire sector.
USDA is obviously attempting to minimally meet the 2008 Farm Bill Congressional mandate with this rulemaking. OCM will be further reviewing the rule and its impact alongside our stakeholders as we continue to fight for the rights of America's farmers and ranchers.
OCM had applauded the December 2016 version of this proposed rule, which would have allowed farmers to hold agribusinesses accountable for practices like retaliation, bad faith cancellation of contracts, or collusion efforts to force farmers out of the market, while relieving farmers and ranchers from the requirement to demonstrate competitive injury. The 2016 proposed rule, along with two others, had been the product of a nearly 10-year rulemaking process.
Organization for Competitive Markets is a membership-based research and advocacy organization working to expose and break the stranglehold of corporate consolidation in our food and agricultural economy.