I hate to say I told you so, but I did. In June USDA published a draft rule regarding how meatpackers must deal with farmers and ranchers in the procurement of livestock and poultry .
In August, the packers and their commodity group allies finally pitched their fit, just as I said they would. I wonder why anyone should care about the complaints coming from the likes of the American Meat Institute and National Pork Producers Council.
For 40 years USDA has allowed packers to discriminate against family farm and ranch livestock producers by paying them less than they pay mega-producers for the same quality hogs and cattle. That family farmers and ranchers want the value of their livestock, not the volume, determining price is not only eminently reasonable, it is long overdue.
The Packers and Stockyards Act specifically prohibits price discrimination by meatpackers, making it unlawful for packers to “make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect whatsoever.” Thirteen years ago, the National Commission on Small Farms recommended that USDA better define an “undue or unreasonable preference,” and that recommendation has been reiterated many times by the Center for Rural Affairs and our allies over the years.
In fact, the Center for Rural Affairs has been the most outspoken proponent of this rulemaking anywhere. And, finally, real victory is in sight. USDA’s draft rule is the most aggressive livestock market reform to come out of Washington since the passage of the Packers and Stockyards Act itself. It should be strengthened, not weakened, and moved forward.
A definition for “unreasonable preference” that ends volume-based price discrimination against family farmers and ranchers and the establishment that independent cattle feeders, hog farmers and cattle ranchers do not have to show harm to competition across the entire beef or pork sector to stop the anticompetitive practices that are driving them out of business – these are the two most crucial provisions in the rule. As you might expect, they are most under fire from the packers and their minions.
The packers don’t want reform. They want the freedom to put the screws to individual producers wherever and whenever they damn well please. They don’t care about farmers and ranchers getting a fair price or a fair contract. They only care about their bottom line.
Source: Centre for Rural Affairs