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June 11, 2014
As comedian John Oliver said last week in his much-watched primer on net neutrality, “If you want to do something evil, put it inside something boring.” Big Ag has known this strategy for years and perhaps no one does it better than the meatpackers and poultry companies—companies like Tyson, Smithfield, and trade organizations like the American Meat Institute and the National Chicken Council.
They’ve got a head start because the struggle over their domination of the marketplace has taken place over the U.S. Department of Agriculture’s Grain Inspectors, Packers, and Stockyards Administration, known as GIPSA. Under the cover of a bureaucratic sounding name and an obscure government agency, meat companies have quietly flexed considerable lobbying muscle to kill one of the most important policy reforms for livestock and poultry farmers and ranchers—and therefore one of the most important policy reforms for those of us who care how our meat is raised.
The GIPSA rules—let’s call them “fair farm rules” for short—were proposed back in 2010 and designed to address the growing power of just a few corporations in the increasingly consolidated meat industry. Nationally, the top four companies in each industry slaughter four out of every five beef cattle, two out of three hogs and three out of five chickens. At the local or regional level, one company often controls an even larger percentage of the market.
Tim Gibbons, of the Missouri Rural Crisis Center, says that consolidation has meant “the meatpackers report huge profits, while farmers’ share of the retail dollar has gone down dramatically—and consumers still see food prices rising at the grocery store.” In Missouri, Gibbons adds, thousands of independent small and mid-size family hog farmers have gone out of business because they don’t have access to a fair market. “Because of massive corporate control of the market, we’ve lost 91 percent of hog producers in Missouri since 1985. That’s over 20,000 farmers and many, many jobs in our rural communities.”
It’s not much better on the consumer side. As the Washington Post points out, “Americans have never had so few options in deciding what company makes their meat.” Even as a growing number of local and niche markets make it easier for some consumers to trace the source of their meat, the trend in the rest of the marketplace is towards rampant consolidation. Just this week, Tyson Foods, the second largest meat producer in the world, sealed a bid to take over processed food giant Hillshire Farms, seller of Jimmy Dean and Sara Lee. When just a few companies control most of the market—and can use their power to keep out or buy up competitors—consumer choice is something of an illusion, and questions about food safety, antibiotics or other additives, animal welfare, and even taste can be tough to answer.
When President Obama took office, he promised to address the problem of excessive corporate power in the livestock industry. Christopher Leonard, author of The Meat Racket: The Secret Takeover of America’s Food Business, describes the original package of proposed rules as “some of the most sweeping antitrust reforms since the Great Depression.” The rules would have returned power to independent farmers and ranchers, protecting them from retaliation by corporations, ensuring fair and competitive market pricing and even allowing them to sue if they felt a company caused them economic harm.
But, according to Leonard, who details the fight in his book, Agriculture Secretary Tom Vilsack and his team were “caught flatfooted. They were not prepared to respond to criticism, to defend the rules they had proposed, or even to articulate the importance of antitrust enforcement in a highly concentrated industry.” The meatpackers and trade groups, on the other hand, “spent a ton of money”—almost $7.8 million on lobbying in 2010—to circumvent the USDA by going to their allies in Congress to defeat the fair farm rules. “Their message was that the rules would kill jobs, that they would be an economic hindrance to the meat industry. In actual fact, the rules would have been good for the people who raise meat, but that wasn’t the story that made it to Congress.”
As a result, the final fair farm rules released in 2011 were dramatically stripped down. The remaining rules are a shadow of their former promise—but they do still contain a few important protections for contract poultry and hog producers, including mandating advance notice when a poultry company cancels a delivery of new birds, safeguards to prevent companies from unilaterally requiring growers to make expensive equipment upgrades, and other abusive and anti-competitive practices.
The meat lobby, however, was not happy with even these diminished rules, and managed to get them struck from the House version of the recent Farm Bill. And when the final 2014 Farm Bill did not include language to scuttle the rules, trade groups like the National Cattlemen’s Beef Association and National Chicken Council urged lawmakers to oppose the entire bill—which had taken more than two years to get to a vote and included funding for a desperately-needed disaster relief for livestock farmers, the trade groups’ ostensible constituents.
In the end, the Farm Bill passed with the poultry rules intact. What’s a meatpacker to do? At the end of May, another opportunity opened, in the conveniently under-the-radar agriculture appropriations process. The House Ag Appropriations bill, debated in committee last week, included language that would both kill the fair farm rules that have taken effect and prevent USDA from working on several additional farmer-protection rules that are still in limbo .
Some lawmakers tried to save the rules, such as Representative Marcy Kaptur (D-OH), who offered an amendment to strike the anti-GIPSA language. She took meatpackers and poultry companies to task for making “an end run” around USDA’s efforts to implement the “pro-farmer, pro-consumer, pro-competition” rules.
Kaptur’s amendment failed, with the committee voting, in effect, to strike down the fair farm rules.
The Ag Appropriations bill is expected to be debated in the full House starting this week, at which point more amendments may be offered to preserve the rules. The Senate version of the Farm Bill, however, says nothing about the rules, and so unless the Senate overtly rejects the language in the House version, basic farmer protections will be eliminated—including, ironically, the right of independent livestock farmers to speak out about abuse to Congress or the USDA without fear of retaliation.
In rural America, according to Tim Gibbons, “Fair farm rules are a bipartisan issue–a non-partisan issue, really. Most people out here are calling for fair markets.” In Washington, it seems, the bipartisan support primarily leans towards the meat industry. With their lobbying muscle and the cover of “boring” political processes, the meatpackers and poultry companies are angling to do what many farmers and consumers would consider “evil”—continuing to strip small and mid-sized meat and poultry farms of their rights to a level playing field in today’s marketplace.
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