Happy 90th Birthday Packers and Stockyards Act. One present you won’t be getting is a new set of teeth. This week, decision makers in Washington let down family farmers, rural communities and the free market when the USDA announced it intends to publish only limited portions of the Grain Inspection Packers and Stockyards Administration (GIPSA) rule that was mandated by Congress as part of the 2008 Farm Bill. The new rule framework is a far cry from what livestock farmers and ranchers expected and needed. Even worse, this watered down rule is a clear sign of who’s calling the shots in D.C.
As we’ve reported in this blog before, GIPSA reform showed great promise last year when the USDA released a proposed rule to bolster the ability of the federal government to protect farmers against abuses by corporate meat packers. This is nothing new: it was basically an attempt to enforce a law that’s been on the books since 1921. After the proposed rule was released, thousands of farmers and ranchers from across the country called Washington to express support for strong rules that would rein in the giant meat packers and integrators. In one week alone this past June, over 5,000 farmers and ranchers, many LSP members from Minnesota, called the White House in support of a strong GIPSA.
Providing better enforcement criteria through the existing Packers and Stockyards Act has long been sought after by LSP and allied farm groups who advocated for the inclusion of a rule-making directive in the 2008 Farm Bill. That’s why we were so encouraged last year to see a proposed rule being released for comments to the public.
The timing couldn’t be better: consolidation and vertical integration within the livestock industry has created a playing field where meat packers and integrators manipulate markets, stifle competition and limit the options of a broad range of both independent and contract livestock producers. As Tom Laskawy points out in Grist, today 90 percent of all beef processing is controlled by four companies. For pork, four firms control 70 percent of processing. Such control makes it virtually impossible for independent livestock producers to get a fair price—they take what the packers are paying and the consumer pays what the processors are charging.
When USDA head Tom Vilsack pulled in reform-minded attorney Dudley Butler to head the Department’s division in charge of livestock markets, it looked like the Packers and Stockyards Act was finally going to get its due and President Obama was going to make good on his campaign pledge to, “Prevent anti-competitive behavior against family farms, and issue regulations for what constitutes undue price discrimination.”
While not a cure-all for the ills of anti-competitive behavior and undue corporate influence in livestock markets, the original proposed rule could have addressed some of the more extreme meat packer practices that farmers face.
And that scared some powerful players. As we reported here exactly a year ago, the American Meat Institute (AMI) — the lobbying consortium for the nation’s biggest meat packers — and packer-producer groups like the National Pork Producers Council and National Cattlemen’s Beef Association from the beginning came out blasting the rule. AMI members such as Cargill, Tyson and JBS like things exactly the way they are.
Perhaps it was clear the fix was in as early as this past spring, when at a Congressional hearing on the issue representatives from Cargill and the National Cattlemen’s Beef Association were allowed to dominate the discussion. In fact, no family farmers or USDA experts were given a chance to provide a rebuttal or give an alternative perspective. Well, it looks like all that high-priced lobbying paid off this week.
While portions of the rule moved forward this week do address some of the most egregious conditions that certain contract poultry and hog producers face, overall Obama’s USDA abandoned essentially all measures that would have helped independent cattle and hog producers. This week’s announcement also indicated that a new or extended comment period would proceed on select pieces of the proposed rule. But considering the already extreme delays in the rule-making process and backtracking as demonstrated with this announcement, groups like LSP have little confidence this President will see them through to finalization.
Ultimately, Obama crumpled under pressure from corporate meat packers and packer-producer groups who had made killing the GIPSA rule a top priority. As Laskawy reports, there is a recent precedent for this—Vilsack’s attempt to restrict the release of genetically engineered alfalfa earlier this year was crushed by a White House working hard to placate Corporate America. So much for campaign pledges.
LSP is pushing for the Obama Administration to revisit the GIPSA rule and deliver on its promise. A healthy functioning marketplace provides the foundation for good jobs and opportunities in agriculture. That does not exist in the livestock industry today. Farmers, big or small, should be given a fair shot at getting the best price they can for the fruits of their labor. Livestock producers and consumers and our communities expect and deserve better in a country that supposedly considers the “free market” a cornerstone of its economy.
Meanwhile, continued consolidation of power in the meat industry is having huge impacts on the farm, and on the Main Streets where the owners of those farms do business. As southwest Minnesota hog farmer Darwyn Bach said recently, “I’m trying to decide if I’m going to remain in hog farming. I need to be confident that I have market access for my hogs and I’m competing on a level playing field with other producers.”