OMAHA, Neb. — As part of an effort to foster more competition in the agricultural sector, the Biden administration wants to publish a new regulation to safeguard the rights of farmers who produce cows, chickens, and pigs against the country’s major meat processors.
One of many actions the White House wants to unveil in the coming days is a new regulation that would make it simpler for farmers to sue firms with which they have contracts for unfair, discriminatory, or misleading conduct. The US Department of Agriculture is also anticipated to tighten the definition of “Product of USA” meat to exclude animals grown in other countries but processed in the US.
For years, farmer advocacy organizations have pushed for reform, but Congress and the meat processing business have been staunch opponents. An executive order clearing the way for the new restrictions is anticipated to be announced this week, according to a USDA official familiar with the White House’s strategy.
The rules are intended to “increase competition in agricultural industries to boost farmers’ and ranchers’ earnings, fight back against abuses of power by giant agribusiness corporations, and give farmers the right to repair their own equipment as they see fit,” according to White House press secretary Jen Psaki.
The regulation, which is identical to one repealed by the Trump administration four years ago, will make it easier for farmers to file complaints under the Packers and Stockyards Act. That rule was suggested for the first time in 2010.
A farmer must establish that a company’s activities undermine competition in the whole industry before a case may proceed, according to many court judgments. That high burden of proof would be lessened under the new regulation.
Producers of chicken and pig, for example, are sometimes required to accept long-term contracts with firms like Tyson Foods and Pilgrim’s Pride, which farmers claim tie them into agreements that fix their income at unprofitably low levels and drive them deep into debt.
Major meat corporations have previously defended the system as fair, claiming that it requires farmers to supply barns and labor to rear chickens, while the firms offer chicks, feed, and knowledge. The new rule, according to the North American Meat Institute, which represents meat manufacturers, will certainly promote “expensive, spurious litigation.”
Small farmers who “work extremely hard for not a lot of compensation,” according to supporters of the new regulation, are unlikely to file complaints.
“The idea that they’re going to become highly litigious and hire every lawyer they can to sue the industry is, I believe, a tremendous exaggeration on the part of some of the anti-ag groups,” said Jonathan Hladik of the Nebraska-based nonprofit Center for Rural Affairs, which advocates for family farmers.
The adjustment, according to Bill Bullard, the head of a trade association representing farmers and ranchers, should better safeguard people in their dealings with the four main meat firms, which control approximately 70% of U.S. beef output.
Bullard, the CEO of the R-CALF USA trade association, stated, “It will assist to change the marketplace and balance the huge gap in power between multinational meatpackers and individual family-owned cattle farms and ranches.”
Darvin Bentlage, a Missouri farmer who farms crops and livestock approximately 40 miles (64.37 kilometers) north of Joplin in the state’s southwest region, believes the new restrictions will be beneficial if they can increase competitiveness.
“We need greater competition,” says the author “According to Bentlage. “Capitalism thrives in a competitive environment. However, when everything is consolidated and competition is eliminated, capitalism fails to benefit the smaller players.”
The USDA also intends to rethink what it means for beef to be labeled as a “Product of the United States.” Companies can now use that designation when processing meat in the United States, even if the animals were born and reared abroad. According to USDA authorities, the majority of grass-fed beef branded as “produced in the United States” is really from imported animals. Tom Vilsack, the Agriculture Secretary, has stated that he wants that label to correctly represent what people expect when they read it.
Bullard believes that altering the labeling regulations will assist, but that even if meat producers are unable to use the “Product of USA” designation, they are not compelled to mark their beef as foreign. Because the meat bears a USDA inspection mark when it has been processed in the United States, consumers may believe it was produced domestically, even if it was imported, he added.
Farmers will have additional alternatives for selling their animals and products if the Agriculture Department invests in new local and regional marketplaces. Large meat processing firms, according to critics, control the market for cattle, hogs, and poultry, making it difficult for small farmers to receive a fair price.
The expected executive action this week comes after the USDA said earlier this spring that it planned to tighten farm law safeguards and foster greater competition in animal markets.
According to a person familiar with the executive order, it will also push the Federal Trade Commission to limit agricultural equipment manufacturers’ power to force farmers to fix their equipment at dealers rather than utilizing independent repair shops or doing repairs themselves. Some tractor manufacturers now utilize proprietary equipment and software to force farmers to take their tractors to dealers for maintenance.