Livestock Competition Rule Unlikely to Provide Needed Protections to Farmers

More than two years after failing to finalize a set of rules to protect American family farmers and ranchers from anticompetitive and abusive business practices from the increasingly consolidated meatpacking and processing industries, the U.S. Department of Agriculture (USDA) today released a long-awaited proposed rule that would more clearly define when a company has shown “undue or unreasonable preference or advantages” for one farmer over another.

 

Though National Farmers Union (NFU) is encouraged by the administration’s efforts to address this issue, the organization is concerned about a provision that would allow customary industry practices to not be considered as an unfair preference or advantage. Lax antitrust enforcement over the past several decades has enabled the poultry and livestock industries to engage in manipulative and discriminatory practices, making those practices customary. As a result, the rule could strengthen the status quo, leaving farmers with little recourse when confronting unfair but typical treatment. It is unclear if the rule’s other provisions will provide needed protections to farmers.

 

In a statement, NFU President Roger Johnson expressed his apprehension about the rule and encouraged the administration to move forward with greater protections for family farmers and ranchers:

 

“Family farmers and ranchers have been plagued by corporate consolidation for as long as this organization has existed – but it’s gotten much worse in recent decades. With almost no oversight, just a handful of corporations have taken control of the poultry and livestock markets. This has made for an extremely lopsided relationship between meatpackers and processors and those who sell to them, where the former sets almost all of the terms and the latter has no choice but to accept them. This has left farmers susceptible to substantial discrimination and abuse.