Biden executive decree goes after consolidation in agriculture sector | 2021-07-09


A sweeping executive order that President Joe Biden signed on Friday aims to tackle consolidation across the economy and places particular emphasis on measures the Agriculture Department could take to combat the meat industry and antitrust law enforcement.

In particular, the ordinance will require the ministry “to consider issuing new rules under the Packers and Stockyards Act (PSA) to make it easier for farmers to make and win claims, d ” prevent chicken processors from exploiting and underpaying chicken farmers, and adopting anti-retaliation measures. protections for farmers who denounce bad practices, ”according to an information sheet published Friday by the White House.

“Big ag is putting pressure on the farmers,” Biden said as he signed the order. “Small farms and family farms, first-time farmers – like returning veterans and black, Latino and native farmers – they see seed prices rise, contracts out of balance, profits fall and growing debt. “

At a press conference in Iowa on Friday, Agriculture Secretary Tom Vilsack said the department would “aggressively” adopt new rules to improve the poultry farmer grading system, which is used to determine the prices that breeders receive for their herds. Regarding the changes to the P&S law, he said the USDA would also act as quickly as possible “to draw clear and clear lines” on what constitutes an unfair practice.

In particular, he said that it should not be necessary for producers to show injury to the entire industry, which he called “virtually an impossible standard”.

Responding to the order, National Chicken Council Chairman Mike Brown said, “It sounds like a solution looking for a problem. The chicken industry is a model of success – from farm to fork – and one of the least consolidated industries in animal agriculture. Brown said “chicken businesses have waiting lists of potential family farms who want to partner with them and get into the chicken business.”

The executive order formalizes what the USDA has already announced. Last month, the ministry said it would propose in the coming months “a new rule that will bring greater clarity to strengthen the enforcement of unfair and deceptive practices, undue preferences and unfair prejudices.”

The department “will propose a new rule for the poultry farmer tournament system, with the current inactive proposal to be withdrawn,” the USDA said, and “will again propose a rule to clarify that the parties do not need to demonstrate prejudice to competition in order to bring an action under Articles 202 (a) and 202 (b) of the P&S Act. “

In a press release issued Friday, the USDA reiterated its intentions: “The regulations will clarify what conduct USDA considers to be a violation of slaughterhouse and stockyard law, including unfair, deceptive or unfairly discriminating against farmers and producers. Second, they will deal with oppressive practices in the processing of chicken. Third, the rules will reinforce the USDA’s long-held position that it is not necessary to demonstrate prejudice or probable prejudice to competition in order to establish a violation of the law. ”

Corporate consolidation has been bad for farmers and ranchers, limiting their options when it comes to selling their produce, according to the White House. “This means they get less when they sell their produce and meat, even if the prices go up at the grocery store.”

As an example, the fact sheet cited the “Big Four” meat packers – Tyson, JBS, Cargill and National Beef – without mentioning them by name.

“Four major meat packers dominate over 80% of the beef market, and over the past five years, farmers’ share of the price of beef has fallen by more than a quarter from 51.5%. at 37.3%, while the price of beef has gone down, ”says the fact sheet.

The North American Meat Institute said it would have more to say after the official unveiling of the order – which Biden is expected to sign on Friday afternoon at the White House – but NAMI spokeswoman Sarah Little said: ” The result is the current level. concentration of four companies has existed for more than 25 years and has not ensured the profitability of the packers to the detriment of the producers. No industry – cow-calf, feedlot or packer – has achieved positive margins every year.

The International Union of United Food and Commercial Workers, however, was quick to welcome the new order. UFCW International President Marc Perrone, who will join Biden at the White House for the signing of the order, said “today’s action puts workers and consumers first by stepping up oversight of meat-packing monopolies that suppress wages and drive up food prices at the grocery store.

“With stricter country-of-origin labeling for food, this executive order supports American jobs and protects consumers’ right to know where their food comes from, whether it is safe, and whether it is produced by workers. Americans, ”he added.

As previously reported, the ordinance also calls on the USDA “to consider issuing new rules defining when meat can bear” Product of the United States “labels, so that consumers have accurate and transparent labels that allow them to choose products made here, “the fact sheet said, noting that” under current labeling rules, meat can be labeled “Product of the United States” if it is only processed here including when the meat is raised overseas and then simply processed into pieces of meat here. “

Agriculture Secretary Tom Vilsack, who will speak on the order in Council Bluffs, Iowa on Friday, has already announced a “top-to-bottom” review of “Product of America” ​​meat labels.

American farmers and ranchers are “strangled by foreign companies importing meat from overseas with labels that mislead customers as to its origin,” the fact sheet said.

“Overall, the farmers ‘and ranchers’ share of every dollar spent on food has been declining for decades,” he says. “In short, family farmers and ranchers get less, consumers pay more and the big conglomerates in the middle are making the difference.

“Meanwhile,” he continues, “the law designed to combat these abuses – the Packers and Stockyards Act – has been systematically weakened” by the USDA under the Trump administration.

The order also seeks consolidation in the agricultural industry, calling on “the major antitrust agencies, the Department of Justice (DOJ) and the Federal Trade Commission (FTC), to vigorously enforce antitrust laws and recognizes that the law allows them to challenge bad mergers that previous administrations had not challenged before.

The policy of the Biden administration will be that “the application should focus in particular on labor markets, agricultural markets, health care markets (which includes prescription drugs, hospital consolidation and insurance) and the technology sector “.

The fact sheet indicates that farmers and ranchers have little choice when it comes to the supply of inputs. “The seed, equipment, feed and fertilizer markets are now dominated by a few large companies, which means family farmers and ranchers now have to pay more for these inputs,” he says. “For example, only four companies control most of the seeds in the world and the prices of corn seeds have increased by up to 30% per year.

The order also covers another key element of farmers’ operations – their equipment.

“The business combination even affects the ability of farmers to repair their own equipment or use independent repair shops,” the fact sheet says. “Powerful equipment manufacturers, such as tractor manufacturers, use proprietary repair tools, software and diagnostics to prevent others from making repairs. “

As an example, the White House says, “When some tractors detect a failure, they stop working until a dealership unlocks them. This forces farmers to pay dealer rates for repairs that they could have done on their own or that an independent repair shop could have done cheaply. “

To tackle the problem, the ordinance “encourages the FTC to prevent powerful equipment makers from restricting people’s ability to use independent repair shops or do DIY repairs – such as when tractor companies prevent farmers to repair their own tractors “.

Finally, to deal specifically with competition in agriculture, the ordinance “directs the USDA to develop a plan to increase opportunities for farmers to access markets and receive a fair return, including by supporting alternative food distribution systems like farmers’ markets and developing standards and labels so consumers can choose to buy products that treat farmers fairly, ”the fact sheet says.

Areas of interest outside of specific agricultural policy concerns could also have an impact on farmers and pastoralists. The order also includes language calling on the Federal Maritime Commission “to ensure vigorous enforcement against shippers charging exorbitant fees to US exporters.” There is also pressure to restore the “net neutrality” rules imposed during the Obama administration that were finally repealed by the Federal Communications Commission in 2017.

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This story has been updated to include comments from Agriculture Secretary Tom Vilsack.

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