Down But Not Forgotten, the Fight for Competition Continues

Posted on | November 18, 2011 | No Comments

By Mike Stranz, NFU government relations representative

It has been a rough two weeks for fairness and competition in livestock and poultry markets. Decision makers in the nation’s capitol have turned their backs to the voices of independent farmers and ranchers who have tried to make their voices heard in support of the Grain Inspection Packers and Stockyards Administration proposed rule. As a result of regulatory decisions in the Obama Administration and congressional action, very few of the proposed GIPSA rule provisions that would help restore fairness and competition in livestock and poultry markets will be finalized and enforced.

On Nov. 4, USDA sent portions of the GIPSA rule to the Office of Management and Budget (OMB), which is the last step in the process before the rule is finished. Some parts will be open for further public comments, other aspects were left for future consideration, and a few pieces of the original GIPSA rule were dropped outright. However, only rules that deal with poultry were sent to OMB, while overall livestock competition rules, which would help prevent the spread of consolidation and unbalanced market power in pork and beef markets, were left behind.

This was very disappointing to NFU, as our members had spoken out time and time again in favor of these important protections. However, there was still hope that USDA would issue rules on the definition of “competitive injury,” “undue preference” as well as “unfair practices.” Unfortunately, a conference committee report on Fiscal Year 2012 agriculture appropriations finished what USDA started by including a policy rider defunded any of the remaining GIPSA rule provisions. The report was passed by both houses of Congress on Nov. 17 and became law a day later. Meaningful and comprehensive reform of livestock markets will have to wait – again.

NFU has been fighting for stronger enforcement of the Packers and Stockyards Act since the day it became law in 1921. But encouraging developments made progress seem likely in the last several years. In 2006, the U. S. Government Accountability Office (GAO) found that GIPSA had failed to enforce laws created to combat increased consolidation and anticompetitive practices. In 2008, the Farm Bill included language that instructed GIPSA to promulgate rules to fix many of the problems in the poultry marketplace. And later that year, then-candidate Barack Obama made a campaign promise to, among other matters of competition, “issue regulations for what constitutes undue price discrimination” (Page 2). It seemed that a new era of enforcement for the Packers and Stockyards Act was at hand.

Unfortunately, this progress was stymied by the very interests who had enjoyed and would continue to benefit from a non-competitive, consolidated agriculture industry. Flawed and disingenuous economic studies, boatloads of campaign contributions and a poisonous anti-regulation atmosphere came together to kill the bulk of the GIPSA rule. Although the Obama Administration could have stood firm in their commitment to leveling the playing field for family farmers and ranchers, they instead stood on the side of corporate packers and processors.

One wonders how many food industry executives will vote for a second term for the current administration next year. Surely the 1.2 million livestock and poultry farmers and ranchers who have gone out of business in the last thirty years – and the thousands more who will this year – will remember that this administration did not stand up for them on this issue.

But the fight will go on. This is just another setback in a battle that has taken decades and NFU will continue to stand strong for family farmers and ranchers.

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About NFU

National Farmers Union was founded in 1902 in Point, Texas, to help the family farmer address profitability issues and monopolistic practices. NFU works to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.
Learn more at nfu.org

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