Congress set to cut funds for meat industry reform

by Meat&Poultry Staff
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ST. LOUIS – On Nov. 15, the US Department of Agriculture said it planned to abandon portions of an antitrust rule proposed for meat companies if Congress does not provide money for enforcement, according to The Associated Press. On Nov. 14, a Congressional committee voted to strip funding for the measures in a spending bill the full Congress is expected to approve by the end of this week.

These reforms would have changed how poultry companies pay chicken farmers and would make it easier for ranchers to sue meat packers over antitrust violations. USDA proposed the reforms in response to an order in the 2008 farm bill that it strengthen its antitrust rules. But the agency went much further than Congress had asked.

If the bill passes, the USDA will be forced to abandon the reforms, USDA spokeswoman Courtney Rowe said.

The antitrust overhaul has been a cornerstone of the Obama administration's efforts to curb the power of the nation's biggest meat companies. This move was welcomed by many small farmers who say the changes would give them more bargaining power when selling their animals. But the meat industry has lobbied heavily against the changes, claiming they would hinder their operations and raise meat prices. Meat industry groups praised Congress for blocking funding for enforcement.

The bill is a major defeat for farmer activist groups that have lobbied for years to pass tougher regulations on the nation's biggest meat companies.

A key part of the rule would have made it easier for farmers to sue meat companies under a 1921 law called the Packers and Stockyards Act. Farmers must currently prove a meat company has harmed competition in the entire meat industry to win a case under the law. The new rule would have required only that farmers prove a company's actions harmed them personally. Meat companies and their lobbyists said the provision would have opened the door to a flood of unwarranted lawsuits.

Congress also barred the USDA from changing the so-called "tournament system" that chicken companies use to pay their farmers. Poultry companies rank chicken farmers based on how efficiently they can raise birds using the feed the companies provide. The companies penalize less-efficient farmers by paying them less money. The USDA rule would have banned that practice by forcing companies to offer a base price for chickens with incentives for better performers.

The USDA proposed the antitrust rule last June and was preparing to release a final version of the rule within months.

Congress left funding for some parts untouched and USDA continues moving forward with sections that were directly mandated by the 2008 farm bill. Such provisions include a limit on how much money poultry companies can ask farmers to invest in equipment for their farms and require companies to give farmer at least a 90-day notice before suspending delivery of chickens.

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