USDA to Take On Livestock Market Concentration Through Packers and Stockyards Act Rulemaking

Today, the Office of Management and Budget (OMB) released the “Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions” (“the Agenda”) which sets forth the upcoming actions of administrative agencies, including the United States Department of Agriculture (USDA). Signaling that the USDA is heeding calls from farmers, policymakers, and advocacy groups to address market concentration, the Agenda contained critical changes to the Packers and Stockyards Act (P&S Act), a law passed in 1921 to protect livestock and poultry producers from abusive meatpacking companies. 

The most encouraging change to the P&S Act promises to clarify the scope of the law with regard to competitive injury. Currently, producers who have been harmed by unfair practices must prove harm to the entire industry — a prohibitively high burden of proof that protects corporate monopolies from legal action. This regulation would clarify that parties do not need to demonstrate sector-wide harm in order to bring action for market abuses. 

The USDA also signaled they would deem certain practices illegal under the poultry tournament pay system, in which contract growers in one geographic area are grouped together. This system pits friends and neighbors against one another, and should be completely repealed.

The third change will clarify what conduct is considered unfair, discriminatory, or deceptive; it would also define which practices are considered preferential, advantageous, prejudicial, or disadvantageous to competition. Family Farm Action Alliance asserts that the 2016 “legitimate business justification” loophole for packers should be addressed, and additional provisions must make it clear that meatpackers cannot discriminate against producers based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, use of public benefits, political beliefs, participation in community organizing, or civil rights activity.

“During a conversation with Secretary Vilsack in January, I emphasized that without new, strong regulations in the Packers and Stockyards Act, we can’t rein in abusive corporate monopolies. I’m pleased to see that he listened,” said Missouri hog farmer and Family Farm Action Alliance President Joe Maxwell. “I look forward to working with the USDA to implement these rules, and invite a conversation on other changes we could make to achieve truly fair, competitive markets.” 

Family Farm Action Alliance is heartened to see an effort from the USDA to bring fairness to our food system, but encourages all parties not to repeat the mistakes of the past. In 2010, Family Farm Action Alliance leadership supported the introduction of provisions to strengthen the P&S, which would have drastically improved market conditions for independent producers; but these regulations were redrafted, weakened, and ultimately not implemented before the end of the Obama administration. Our blog “A Guide to the Farmer Fair Practices Rules” explores the complicated history surrounding the issue, what needs to be done, and why action on this issue is so important.

“Past failures to adequately strengthen the Packers and Stockyards Act left the regulatory environment a safe haven for huge corporations to grow and consolidate power,” said Maxwell. “We applaud the USDA for stating their intentions to make markets more fair, and urge them not to repeat the mistakes of the past. There is more to be done. We need to go the distance to protect family farms.” 

Family Farm Action Alliance urges the USDA to look further than the 2016 protections mentioned by Secretary Vilsack on Tuesday of this week. Following a meatpacking plant fire in Kansas, a global pandemic, and a hack that brought operations at the world’s largest meat producer to a halt, it is clear that our food system is more fragile than ever. Family Farm Action Alliance, along with our members and stakeholders, will continue to hold the USDA accountable as we advocate for a stronger P&S Act.

Media Contact: Dee Laninga, dlaninga@farmactionalliance.org, 202-450-0094

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