On January 3, President Biden announced the Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain. The administration also pledged $1B to expand independent meat processing and packaging.
Many questions have been raised by ranchers and farmers since the announcement. Successful Farming interviewed Jenny Lester Moffitt, USDA Under Secretary for Marketing and Regulatory Programs, to answer a few questions.
SF: From where is the $1 billion that will be used to fund this initiative?
JM:The American Rescue Plan provides funding to support supply chain resilience. America has a problem in the middle of its food system. This is evident from recent cyber threats, major fires, and the pandemic. There are also risks to food safety from packer concentration. It’s not fair and it’s not efficient. We’ve heard how folks had to wait 18 months or longer for a processing appointment. And they’ve told us that they have fewer options of where to sell their cattle. Congress directed USDA to increase the resilience of our food supply chains. We’re doing that by supporting the transformation that’s already ongoing, creating more market options for farmers to support a system that’s more resilient and fair.
SF: What is the plan for $1 billion? How much money is going to go to education, grants, etc.?
JM:The USDA intends to use the money for a number of different purposes. The USDA will announce $150 million in funding this spring to support at least 15 processing plants. The first phase will focus on grants that have the greatest immediate impact. The second phase will be launched this summer with $225 million more funding for long-term investments to increase capacity. The USDA will also invest $275 million in partnership to lenders to increase capital access. This will be primarily focused on lenders who invest in underserved areas.
SF: Apart from grants for processing facilities, which other programs will this program be investing in?
JM:There is a need for capital as well as a need for skilled workers. We have committed $100 million to support workforce growth, safe workplaces and high-quality, well-paying jobs. For example, I can see a community college receiving funding to train processing workers. We know it’s very important to support technical assistance, innovation, and research and development as well, so we have allocated $50 million to support these areas. This will include independent business owners like cooperatives and worker organizations to increase processing capacity.
SF: What encourages independent packers in this program to be financially viable once this funding/support runs its course?
JM:We must ensure that businesses have equal opportunities to succeed. To ensure that meat packing competition is fair and consistent, we have partnered up with the Enforcement Division of Department of Justice. This will allow us to strengthen and enforce existing rules. We have created a portal with Department of Justice so that people can make complaints. This will allow us to see the potential issues and let everyone know – the USDA and the Department of Justice. We are also strengthening the rules in The Packers and Stockyards Act, which is a law designed to stop abuse by meat packers.
SF: How does this help get small packer’s meat into stores? Although assistance and education can be helpful, meat in stores is what will make a profit.
JM:Because of the competitive practices that could prevent small packers from accessing retail, our fair and competitive markets agenda has been important. We have heard these stories, and we take these risks very seriously. For enforcement, we are partnering with the Department of Justice as well as the Federal Trade Commission. We are also sending out a report that includes recommendations for retail access. We are also revitalizing the Packers and Stockyards Act which is the USDA’s fair and competitive markets law. We believe this suite of activities—the funding, the different actions that we’re doing with the Packers and Stockyards Act, and enforcing competitive practices—is a full suite of tools producers and processors have access to so the vital value-added markets are available to them.
SF: How can USDA ensure that the Big 4 packing plants don’t get this assistance?
JM:This funding will be used to support independent processors. We will provide more information about the grant terms when we issue the request for proposals in the spring. The qualifications for processors and restrictions about use of funding will also be provided on the USDA’s website at USDA.gov/meat.
SF: Why haven’t American anti-monopoly laws prevented the Big 4 problem from happening?
JM:This is a serious problem that has been a long time in the making. We focused our attention on a system which has traded resiliency in exchange for efficiency over many decades. We have seen the dangers and consequences of not focusing on a system that has traded resiliency for efficiency over decades. Now is the pivotal time to transform our food system to be more fair, more competitive and more resilient to future crises.
Source: Successful Farming