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Blog | July 7, 2021

Bringing Competition Back to the Meat Sector

by Jennifer Fahy

Good news for farmers and ranchers is coming this week! The U.S. Department of Agriculture (USDA) plans to issue a new rule to protect the rights of farmers who raise livestock for the country’s largest meat processors in a long-overdue effort to encourage more competition in the agriculture industry.

The new rule will support enforcement of the Packers and Stockyards (P&S) Act, the 100-year-old law that was originally designed to protect poultry and hog farmers and cattle ranchers from unfair, deceptive, and anti-competitive practices.

It will be similar to the Farmer Fair Practices rules proposed by the Obama Administration in 2010, which were not implemented before the end of his terms in office, and which were killed by the Trump administration.

Additionally, the U.S. Department of Agriculture is taking a fresh look at the definition of what it means for meat to be labeled a “Product of USA.” Currently, the label allows animals to be raised in other countries and merely processed and/or packaged in the United States. Agriculture Secretary Tom Vilsack has said he wants that label to accurately reflect what consumers expect when they read it.

“Years of irresponsible consolidation in the agriculture sector has really left us with a broken system controlled by just a few massive corporations.” – Senator Jon Tester

And in Congress, the Meat Packing Special Investigator Act was recently introduced to help level the playing field for farmers and ranchers, who operate in an industry that has alarmingly high rates of corporate concentration. The bipartisan legislation, introduced by Senators Jon Tester (D) of Montana and co-sponsored by Sen. Chuck Grasseley (R) of Iowa and Mike Rounds (R) of South Dakota, will create an office of special investigators to investigate competition within the packers and stockyard division of the USDA. This office would have subpoena powers to bring cases against meatpackers found to engage in anti-competitive practices.

Senator Tester says that the beef industry is no longer competitive because “years of irresponsible consolidation in the agriculture sector has really left us with a broken system controlled by just a few massive corporations.”

Farm Aid and many of our partners have called for these changes for decades, but Congress and the meat processing industry have successfully advocated against any changes that rein in their market power, thanks to the political power that market power gives them.

The Agriculture Department also plans to invest in new local and regional markets, so farmers will have more options of where to sell the animals and crops they raise. Diversifying the markets that farmers can access to sell their products, will make it possible for farmers to get a fair price for the animals they raise and bring competition to a sector that has historically been ruled by just a few corporate giants.

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