WASHINGTON – On June 11, the US Department of Agriculture announced it would start to bolster enforcement of the Packers and Stockyards Act to address challenges faced by livestock producers in today’s market.
The original legislation was passed 100 years ago to promote fair competition, payment protection and guard against fraudulent and deceptive trade practices in the livestock and poultry markets.
“The pandemic and other recent events have revealed how concentration can take a painful toll on independent farmers and ranchers, while exposing working family consumers to higher prices and uncertain output,” said Agriculture Secretary Tom Vilsack. “The Packers and Stockyards Act is a vital tool for protecting farmers and ranchers from excessive concentration and unfair, deceptive practices in the poultry, hog and cattle markets, but the law is 100 years old and needs to take into account modern market dynamics. It should not be used as a safe harbor for bad actors.”
The agency plans to take three actions regarding rulemaking in the next few months.
First, the USDA wants to propose a new rule that would provide greater clarity to strengthen enforcement of unfair and deceptive practices, undue preferences and unjust prejudices. Next, the agency wants a new poultry grower tournament system rule, with the current inactive proposal to be withdrawn. Finally, the USDA will re-propose a rule to clarify that parties do not need to demonstrate harm to competition in order to bring an action under section 202 (a) and 202 (b) of the Packers and Stockyards Act.
Julie Anna Potts, president and chief executive officer of the North American Meat Institute, said the proposed changes have been rejected in the past by many livestock producers and Congress and were previously rejected by eight federal appellate courts.
“They were a bad idea in 2010, they were a bad idea in 2016, and they are a bad idea in 2021,” Potts said. “Should these proposals be implemented, they will limit producers’ ability to market their livestock the way they see fit and will lead to costly, specious lawsuits. The Meat Institute will continue to oppose unnecessary and burdensome government intervention in livestock markets.”
Vilsack and the USDA received support from the Family Farm Action Alliance.
“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 Joe Maxwell, president of the Family Farm Action Alliance. “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.”
Organization for Competitive Markets (OCM), which advocates for small family farms, gave support for one rule specifically.
"The third proposed rule is the most needed to the P&S Act as it promises to clarify the scope of the law with regard to competitive injury,” said Mike Eby, executive director of OCM. “Currently, Farmers who have been allegedly harmed by unfair practices must prove marketwide suppression. This regulation would clarify that parties do not need to demonstrate harm to competition in order to initiate legal action."