Bipartisan legislation recently introduced in Congress would enhance open and fair competition in livestock markets, say its supporters.
“Consolidation is happening in all sectors of agriculture and having a negative effect on producers and consumers across the nation,” said Sen. Tom Harkin, D-Iowa, who introduced the Competitive and Fair Agricultural Markets Act of 2007 (S.622). “Consolidation in itself is not a violation of the Packers and Stockyards Act, but when some entities become larger and more powerful, that makes enforcement absolutely critical for independent livestock producers.
“Economists have stated that when four firms control over 40 percent of the industry, marketplace competitiveness begins to decline,” Harkin continued. “Taken together with fewer buyers of livestock, highly integrated firms can exert tremendous power over the industry.”
Co-sponsors of the bill include: Sens. Mike Enzi, R-Wyo.; Russ Feingold, D-Wis.; Craig Thomas, R-Wyo.; Byron Dorgan, D-N.D.; Max Baucus, D-Mont.; and Claire McCaskill, D-Mo.
“Transparency and fairness in the marketplace have always been core issues for R-CALF, so immediately, we will begin working to create awareness for the provisions of this bill and working to secure passage of this legislation,” said Randy Stevenson, R-CALF USA Region II director, who also chairs the organization’s marketing committee. “We look forward to working with Congress to accomplish that goal.
R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) a national, non-profit organization, represents U.S. cattle producers on both domestic and international trade and marketing issues. Members are located across 47 states and are primarily cow/calf operators, cattle backgrounders, and/or feedlot owners.
“Because only four meat packers control more than 80 percent of the cattle market, it is more critical than ever to level the playing field by strengthening and clarifying the Packers and Stockyards Act of 1921 (PSA),” Stevenson continued. “It’s also imperative that USDA (U.S. Department of Agriculture) increase its enforcement of both laws.”
“We must continue to fight for transparency and fair competition for our livestock markets,” Sen. Thomas said. “The structure of agriculture is changing rapidly, and we need to have a plan in place to stay ahead of the curve, learn from successes and capitalize on the many benefits of seeking solutions ahead of a crisis.”
S.622 calls for the reorganization of USDA to establish an Office of Special Counsel whose sole responsibility will be to investigate and prosecute violations on competition matters. The Special Counsel would be appointed by the president and confirmed by the Senate. The position also would serve as a liaison between the Department of Justice and the Federal Trade Commission (FTC).
Additionally, an amendment to the PSA would include strengthening producer protections by making it easier for them to prove unfair actions by packers, without additional burdens of having to prove adverse effects on competition.
The legislation also provides needed contract protections, prohibits unfair, deceptive, unjustly discriminatory and anti-competitive practices, and prevents discrimination against producers who belong to an organization or co-op by removing a disclaimer clause that currently allows processors, handlers, or contractors to refuse to do business with producers just because they belong to such organizations.
The legislation also would develop rulemaking by requiring the agriculture secretary to write regulations defining the term “unreasonable preference or advantage” under the PSA. USDA has never defined this provision of the law.
Also, in the event a producer’s complaint goes to trial, the bill would remove hurdles by allowing producers to have their trial heard in the state where they reside.