It is countdown time for the USDA’s Grain Inspection, Packers and Stockyards Administration, or GIPSA’s proposed rule that would protect small family livestock farmers and ranchers from the historical monopolies of the big four meat packers who control the market. You’d expect that pro-citizen groups and all enlightened meat consumers would be united in hot pursuit of fair market access for small farmers, pushing the USDA to allow the GIPSA rules to be enforced after the comment period ends on November 22nd. You’d be wrong.

GIPSA is good for the sustainable meat supply, national food security and the survival of the small family farm. The rule would truly level the playing field between thousands of small independent family farmers and ranchers fighting to stay in business and the four behemoth meatpackers who currently control prices and therefore monopolize the supply chain. Civil Eats covered the GIPSA story here and here.

In a strange twist this week, CREW (Citizens for Ethical Responsibility and Ethics in Washington) has attacked the head of GIPSA, twisting his words and sticking up for agri-business as we know it. CREW’s Executive Director Melanie Sloan runs an organization that does exemplary work protecting citizens from egregious governmental slip-ups on national ethics. But CREW penned a frontal attack letter to USDA Acting General Counsel Steven C. Silverman on November 15 accusing J.  Dudley Butler, Administrator of the USDA’s GIPSA, of scheming to benefit trial lawyers rather than protecting family farms. CREW’s letter takes comments made by Butler out of context and makes GIPSA appear to encourage lawsuits and thus represent another barrier to an ethical US meat production system.  The exact opposite is true.

According to Adam Warthesen of the Land Stewardship Project, CREW’s letter misses the point. “To me, the letter looks like it was written line by line by the large meat packers who will benefit if GIPSA fails. Farmers I talk to all agree that Butler is a man of integrity, and that it’s about time we have someone like him who understands what’s at stake for independent farmers. It is disingenuous of CREW to ask him to step down because when the rule passes, the administrator position will end anyway. Furthermore, if the opposition had concerns, why didn’t they raise them in June instead of bringing this to light one week before the comment period ends? This is clearly a smear campaign orchestrated by those opposing the rule.” said Warthesen.

Other farmer advocacy groups concur. In a November 5 press release Bill Bullard, CEO of R- CALF, which represents thousands of small-scale cattle ranchers, also calls this new attack a “deceptive smear campaign against an USDA official” and says this takes the focus away from the real problem.

R-CALF’s release states:

“The purpose of the proposed GIPSA rule is to prevent monopolistic meatpackers from capturing control of the livestock supply chain away from independent family farmers and ranchers,” Bullard said. “And, the rule does this by preventing meatpackers from actually exercising their inherent, monopolistic market power to harm both consumers and livestock producers.”

The release continues, “Bullard charges that meatpackers and their apologists are trying to divert attention away from the necessity of the GIPSA rule by attacking the GIPSA chief. He said the first attack came from BEEF magazine writer Troy Marshall, who unethically captured only a partial response Butler made to an audience member’s question during the annual meeting of the Organization for Competitive Markets (OCM) over a year ago. Bullard said Marshall then used Butler’s partial response to falsely accuse the GIPSA chief of intending to encourage more lawsuits in the livestock industry with the GIPSA rule.”

CREW, if you’re worried about benefiting trial lawyers, consider how they along with millions of American consumers will struggle to find meat not produced on factory farms for their families’ tables when all small producers of cattle, hogs, lamb or chicken are driven out of business by large meat packer monopolies. You should know that GIPSA is good for small farmers and consumers. You have chosen the wrong battle with potentially tragic results for family farmers.  You should go attack industrial meat or Monsanto if you’re hankering for a fight. We’ll support you if you do.

Photo: Ree Drummond via Flickr

The USDA has a law on the books that levels the playing field between family farmers who raise cattle, hogs and poultry and the large meat packers who purchase their livestock and bring it to market. It’s called the Packers and Stockyard Act, and its overseen by the USDA’s Grain Inspection, Packers and Stockyard Administration or GIPSA. But don’t tussle with that mouthful because it doesn’t explain what you need to know about the complex livestock market system. Just keep reading. GIPSA makes sure small producers have equal access to market that larger producers do. It’s fair competition, which is, of course, the American way.

Sounds great, right? And just in time for the good food revolution. But instead, this law has been gathering dust because the USDA hasn’t enforced it. New proposed rules (previously covered here on Civil Eats) amending the act would prevent large meat packers from artificially lowering the price of cattle, hogs and lamb. But four companies control over 80 percent of the U.S. meat market, and these “Big Four” are fighting an effort to strengthen the rule.

For all you urban food geeks who’ve never ridden the North Dakota range or shoveled chicken manure in central North Carolina, here’s some context. When you’re raising livestock, timely access to market is critical because a meat animal is a perishable product. When the animal has reached optimal weight, it must be sold in a narrow window of time, typically within two to three weeks. If it cannot be processed, it begins to degrade in quality, and a producer is subject to a significant price deflation. If a packer won’t purchase your animals for slaughter, you’re stuck selling your animal either too early or too late, competitive bidding isn’t possible, and the packer conspires to give you a ridiculously low price for your labors.

“The reason we’re fighting now for GIPSA’s new rules is simple,” said Rhonda Perry of the Missouri Rural Crisis Center. “We won’t have good quality, affordable food if we don’t have independent family farmers raising livestock. These farmers won’t survive if there’s no competition in the industry. Farmers just want a fair shake. They want the opportunity to compete, because we know we are the best food producers.”

“When your food system falls to corporate consolidation, you get disasters like the Iowa egg recall. One family farmer screwing up will not create a recall of 500 million eggs,” said Adam Warthesen from the Land Stewardship Project. He recalled the hard lesson North Carolina learned in 1999 when Hurricane Earl hit. “The hurricane caused serious flooding, with huge factory farm operations overtaken by flood waters and vast amounts of raw sewage from manure lagoons and dead hogs permeating into ground water and wells. It was a disaster.”

Holly Waddell, a third generation rancher in northwestern South Dakota and Vice Chair of Dakota Rural Action, told me that her priorities are caring for her land, for her animals and for the people who consume her product. She insisted that there is no way an industrial model can replicate that. “We are no longer in control when we’ve turned everything over to big corporations and government. They are not stewards of the land,” she said. “When we lose that family farming operation, all that’s out there looking after the animals is a hired laborer who makes barely minimum wage and who might not pay attention. To me this means the loss of pride and concern for our country’s resources.”

The Big Four packers view killing the GIPSA rules as their opportunity to capture the livestock industry from birth to plate. They’ve already succeeded with poultry and much of the hog supply chain. According to Perry, “Poultry is completely corporatized and has been since the 1970’s. Farmers still raise the birds, but they do not own their livestock. They are merely contractors working for the vertical integrators who own the livestock. They are not independent producers.”

“When we talk to poultry producers in the East, they tell us we need to fight like hell so our industry doesn’t end up like theirs,” said Warthesen.

As for the pork industry, Perry told me that since 1980, 90 percent of independent hog farmers have also stopped farming. Was efficient production the goal? No, it was profits for packers. Consumers saw a 71 percent increase in retail pork prices, while hog farmers suffered a 50 percent drop in their share of every dollar.

Independent cattle producers are still hanging on, but Bill Bullard, CEO of R-CALF USA, told me we’ve lost over 40 percent of our independent producers already. As a result of this consolidation, 1.2 million people who were farming and ranching 20 years ago no longer do so today. “The GIPSA battle is a once in a lifetime opportunity to prevent the destruction of the cattle industry,” said Bullard. “Cattle is a $50 billion dollar industry. It’s the largest segment of American agriculture, and an economic cornerstone for rural communities across America.”

“Farmers and supporters are feeling desperate, but also hopeful,” said Warthesen. “We need to make sure this administration hears from both farmers and consumers, because this is the first administration that has even attempted to take this on.”

He sees the move to quash these rules as the sign of a struggling meat industry. “Consumers don’t want what they’re selling anymore. So the industry is fighting back with everything they’ve got. Ironically, although consumers are demanding meat from family farmers, policy makers have been pretty slow to catch up in no small part because of industry money and lobbying power.”

Waddell sees hope in the fact that this administration has put more focus on these issues. “Secretary Vilsack visited with us in Ft. Collins. He talked about agriculture being vital to our nation’s well-being,” she said. “He says his administration wants to see a vital rural economy and communities of folks that can sustain themselves out in the countryside. If that is genuinely the feeling starting to surface at USDA, they [should] go forward with the rules to enforce GIPSA.”

What can the concerned consumer do? Buy your meat from your local small family farms. Contact your representatives and the USDA. And submit a comment. The comment period for the rule ends November 22.

Photo: BugMan50 via Flickr

The new rules came on the heels of a series of joint workshops between the USDA and the Department of Justice at which many poultry producers, dairy producers and other farmers complained of unfair contracts that left them in debt and beholden to a few key players in the industry. These major reforms aim to reverse the trend of decline in small and mid-sized farms, a current focus for the USDA. The AP (via ABCNews) described the new rules back in June this way:

The rules would place the sharpest limits on meat companies since the Great Depression, drastically lowering the bar that farmers and ranchers must meet to sue companies whom they accuse of demanding unfairly low prices.

The rules would dictate how meatpackers buy cattle on the open market, and prohibit them from showing preference to big feedlots by offering them special incentives not available to smaller producers.

They would also limit the control chicken companies have over the farmers who raise birds for them. The companies couldn’t require farmers to take on debt to invest in chicken houses, for example, unless farmers were guaranteed to recoup 80 percent of the cost.

The law would also make it easier to file suits under the Depression-era Packers and Stockyards Act by stating that farmers don’t need to prove industrywide anticompetitive behavior to file a lawsuit under the act.

Secretary of Agriculture Tom Vilsack acknowledged back then that these reforms were long overdue, saying “The reality is, the Packers and Stockyards Act has not kept pace with the marketplace … Our job is to make sure the playing field is level for producers.”

However, the livestock industry has brought their lobbyists out in full force, alarmed by the changes being pursued all around them: the potential for a ban on non-therapeutic use of antibiotics in livestock (via the FDA and Congress), which would require Confined Animal Feeding Operations (CAFOs) to dramatically rethink their practices; the new dietary guidelines released by the USDA, which suggest decreasing meat intake along with eating more vegetables and whole grains; and the current debate over whether or not to build a pipeline for corn ethanol, extending the fuel’s tax credit, and increasing the amount that can be blended into our gasoline, which would all most likely raise feed costs for livestock producers. Thus the livestock, poultry and egg industry has already spent over $700,000 on lobbying, and it probably won’t let up soon.

The House Ag Subcommittee seemed to echo the industry’s fears. Chris Clayton of the The Progressive Farmer quoted some of the committee members on Tuesday, including Subcommittee Chairman David Scott, D-GA, who said that USDA officials had “very, very seriously overstepped their boundaries.” House Agriculture Committee Chairman Collin Peterson, D-MN, along with others on the committee are pushing to extend the comment period for the proposal for a 120 days after the August 27th Department of Justice workshop on livestock in Fort Collins, Colorado — a stalling tactic which could result in the industry watering down the rule.

The response to the GIPSA rules is a big test for the USDA, which plays the confusing dual role of promoting and regulating agriculture. On Tuesday, USDA Undersecretary for Marketing and Regulatory Programs Edward Avalos was in the hot seat, and according to Clayton, was “stressing, repeatedly, that the livestock rule “is a proposed rule” and that USDA wants to hear from the industry.”

The industry has built relationships with politicians on the right and left and has been lobbying them with the profits it is trying to protect for years. Will reformers, who have long fought for just these kinds of reforms, turn the heat up from their side? If there is a silver lining for the reforms, it is that the Senate is more open to them. (excepting industry stalwart, Senate Agriculture Committee Chairwoman Blanche Lincoln (D-AR), whom Tom Laskawy at Grist predicts will lose in November in his though-provoking write up on the GIPSA rules controversy). But if major changes to the livestock industry are going to take hold, it will require voices from the public and the USDA holding its ground. We’ll stay on this story as it develops.

Since the 1980s, American agriculture has become increasingly concentrated. Today, less than 2 percent of farms account for half of all agricultural sales. The new antitrust division of President Obama’s Justice Department has said that scrutinizing monopolies in agriculture is a top priority.

That shift is giving hope to independent farmers, who have complained for years that agriculture giants are shrinking the marketplace and paying farmers less for their products.

Naturally, this got me right out of bed, as I have been reporting on the role competition plays in agriculture of late here on Civil Eats, and because the media barely batted an eyelash when the Department of Justice (DOJ) sent out a press release a week ago about the public workshops that will be held all over the US beginning in early 2010 to find out from farmers about possible anti-competitive behavior in agricultural markets.

Just a day following the release, Phillip Weiser, the deputy assistant attorney general and point person on competition issues in Big Ag, gave a speech at the Organization for Competitive Markets meeting in St. Louis — the headquarters of seed and chemical giant Monsanto, which many have argued controls too much of the market. (Here is Daily Yonder blog’s take on the event.)

The Organization for Competitive Markets does get funding from DuPont, Monsanto’s biggest rival — though DuPont did not fund this meeting. The two companies have been digging their claws into each other of late and it keeps getting uglier — but lets hope the DOJ doesn’t see their job as simply making way for DuPonts and Monsantos of the world to be able to produce GM seeds. Policy making should first and foremost focus on what is best for the farmers and consumers, who are at the mercy of these large corporations. Weiser says that the DOJ will look specifically at seeds, as well as dairy and livestock consolidation. I would add processing (ethnol/corn syrup giant Cargill might be a good place to start), and supermarkets (especially Wal-mart) to that list.

Mad Money host Jim Cramer was one of the few who picked up on the story in the mainstream media, spending a little over eight minutes going into detail about his speculation that Monsanto will be the first on the chopping block at the DOJ. He even throws in a plug for the movie Food, Inc., saying:

I could see Justice, with a capital J, pursuing a restraining order against Monsanto based on the accusations in [Food, Inc.], cause they are so darn inflammatory and this anti-trust division wants to make a name for itself…

Here is the whole segment with Cramer, well worth watching:

h/t to Katherine Goldstein for bringing the Mad Money clip to my attention

For example, did you know that in 2006, 83.5% of beef-packing was controlled by 4 companies, same goes for 66% of pork packing, 58.5% of the chicken processing and 55% of turkey processing. Similar numbers exist for the seed companies, the grain processors bringing animal feed to feedlots and HFCS to most of the packaged foods in the supermarket, and the supermarket retailers themselves. Numbers this high indicate a lack of competition.

For more information on trusts in the agricultural sector, please take a look at a recent post I wrote on the subject.

And also, the Justice Department invites interested parties to submit comments on what should be discussed and considered at these meetings by December 31st, 2009 to: agriculturalworkshops@usdoj.gov Agendas and schedules for the early 2010 meetings will be forthcoming on the Justice Department’s Antitrust Division website: www.usdoj.gov/atr

h/t Tom Laskawy of Beyond Green and Grist