President Biden announced a four-point plan for increased competition in the meat industry on Monday, including “across the board” enforcement of antitrust laws and support of legislation to inject transparency into cattle pricing. Biden stated that meatpacking was dominated and controlled by a handful big processors. This is a textbook example for the dangers of corporate consolidation.
The Justice Department and the USDA said they would prioritize competition in agriculture and would create a central site on the internet for producers to submit complaints about unfair treatment; “a one-stop shop,” said Attorney General Merrick Garland,”to report complaints of potential violations of our competition laws,” including antitrust laws.
“I’m pleased to see Congress is taking action as well to increase competition,” said Biden, pointing to a bipartisan Senate bill to create a cattle-contract library and require packers to buy a portion of their slaughter cattle on the cash market. “And I’ll be inviting the bipartisan group to come together and make progress legislatively. . .even as we continue doing everything we can on the executive branch side.” It was the first time Biden commented on the bill.
The two other elements of the administration’s “action plan” were previously-announced initiatives to spend $1 billion to increase the number of independent processors and to toughen USDA’s fair-play rules governing meatpackers.
In 2021, the cattle-contract library was Congress’ only market reform. The House approved HR 5609, a bill that would create a cattle-contract database. It was passed on December 8. The bill would make available the terms of the contracts packers offer to producers. It would also require USDA to report on the number and status of cattle being committed to packers over the next few months. Backers believe that these provisions will help farmers as well as ranchers determine the best time to sell stock and determine if they are being paid a fair price. Already, there is a contract library available for hog producers.
“Without meaningful competition, farmers and ranchers don’t get to choose who they sell to,” said the president. “These companies use their position as middlemen to over-charge grocery stores and ultimately families. . .And the big companies are making massive profits.”
A trade group representing meat industry dismissed the action plan’s validity as a gimmick. “For the third time in six months, President Joe Biden and his administration announced the same plans to spend $1 billion to fund government intervention in the market in an attempt to increase prices livestock producers receive while blaming inflation on private industry,” said Julie Anna Potts, chief executive of the North American Meat Institute.
The package was applauded by ranch and farm groups. “We must get to the bottom of why farmers and ranchers continue to receive low payments while families across America endure rising meat prices,” said Zippy Duvall, president of the largest US farm group, the American Farm Bureau Federation. The National Sustainable Agriculture Coalition, a small-farm advocate, called for “serious reform to restore fairness, transparency and competition in agriculture.”
Scott Blubaugh of the Oklahoma Farmers Union said that farmers and rural areas would benefit from more processing plants in the countryside, as opposed to one or two packers who set prices for the region.
“For too long, we have seen the multinational meatpackers suck out all of the wealth of rural America and put it in their corporate coffers, and in some cases, even overseas,” said Blubaugh, who took part in the virtual meeting with Biden.
Austin Frerick, a critic of the meat industry, said the Biden plan “is a good first step.” But he said it doesn’t go far enough because it would not dismantle the advantages held by big meatpackers. “When has throwing a billion dollars of taxpayer dollars ever de-concentrated an industry?” Frerick said structural remedies were needed, such as a ban on packer ownership of livestock or a prohibition on big packers being active in more than one line of protein.
To read the White House fact sheet on the action plan, click here.
Source: Successful Farming