The U.S. Department of Agriculture recently announced a series of new regulations under the Packers and Stockyards Act that would set clearer standards on retaliatory and deceptive practices that prevent small producers from banning together and raising concerns.
The regulations are under the newly formed Inclusive Competition and Market Integrity rule, which seeks to reimburse producers and farmers who have suffered from years of consolidated markets through market integrity and fair economic opportunities.
“Discrimination, retaliation and deception against producers and growers has no place in modern livestock and poultry markets,” said Secretary of Agriculture Tom Vilsack, who played a major part in passing the Inclusive Competition and Market Integrity rule.
New rules and reactions
The Inclusive Competition and Market Integrity rule seeks to protect producers from discrimination, relation and deception in contracting by banning “false or misleading statements or omissions of material information” in contracts.
In particular, the regulation forbids hostile treatment of livestock and poultry growers based on race, sex, age or disability and prohibits discrimination against a livestock or poultry cooperative.
It also bans retaliatory practices that prevent small producers from raising concerns or coming together in associations or cooperatives, and prohibits retaliation in other protected activities like lawful communications or refusing to communicate, asserting of Packers and Stockyard rights and exploring or entering a business opportunity with a competing packer/swine contractor, etc.
The rules will be enforced and monitored by the USDA through recordkeeping.
Among those who applauded the move were American Farm Bureau Federation President Zippy Duvall who said the rules “bring transparency and fairness for farmers and ranchers who raise livestock and poultry under contracts with companies.”
Others include the National Farmers Union President Rob Larew, who said: “Family farmers and ranchers deserve the right to stand up for themselves when they’re victims of unfair practices.”
The National Cattlemen’s Beef Association showed waning support, saying the regulation may have unforeseen impacts, but for the most part, it is pleased the USDA addressed significant concerns in the rule.
Meanwhile, meat industry groups like President and CEO of the North American Meat Institute Julie Anna Potts called the regulation an “attempt to assert even more federal authority to regulate the equities of industry business practices.”
A rule among rules
The Inclusive Competition and Market Integrity rule is part of President Joe Biden’s Executive Order on Promoting Competition in America’s Economy, and is just one among many rules the USDA is finalizing through the executive order.
Some of the other regulations include enhancing independent meat and poultry process capacity, expanding domestic fertilizer production, creating a fairer market for seeds and other agricultural necessities and supporting more efficient and effective supply chains.
Small family farms have been plagued by consolidation in the agricultural industry sectors — like seed, fertilizer, feed, and equipment suppliers — and intensive market power when selling their agricultural products, according to the executive order.
“As a result, farmers’ share of the value of their agricultural products has decreased, and poultry farmers, hog farmers, cattle ranchers and other agricultural workers struggle to retain autonomy and to make sustainable returns,” it stated.
The goal of the new regulations is to lower prices for consumers while also uplifting and providing more, fair opportunities for producers.
The Inclusive Competition and Market Integrity rule will go into effect on May 6. Vilsack said he would announce more, new rules under the Packers and Stockyards Act in the near future.
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