For Immediate Release
A Mixed Bag of Livestock Fairness Rules
USDA Proposal Offers First Step for Cattle and Hog Producers, Significant Reform for Contract Poultry Growers
WASHINGTON - “Today, the U.S. Department of Agriculture took long-overdue steps
to level the playing field between livestock farmers and the
consolidated market power of the meatpacking and poultry processing
industry. The proposed reforms to the poultry sector are strong; the
proposal on cattle and hog marketing arrangements is a modest first
step—but nowhere near what is needed to counterbalance the massive
market power of the meatpackers.
“The 2008 Farm Bill directed USDA to provide protections to contract
poultry growers from some commonplace contract practices used by
poultry companies to manipulate prices paid to growers and to prevent
them from having access to the courts to settle contractual disputes.
The law also directed USDA to finally determine which meatpacker
practices are unfair to hog farmers and cattle ranchers.
“In particular, USDA has waited nearly 90 years to define unfair
marketing arrangements, known as ‘undue preferences,’ but while the
proposal has some of the vital elements, it lacks the needed scope to
tackle the problem. USDA’s undue preference proposal will address the
unfair price premium and secret preferential contract terms that
meatpackers offer to industrial-scale cattle feedlots and hog factory
farms. It also delves into the thorny legal issue of whether farmers
must prove that unfair meatpacker practices damage the entire
marketplace or harm a single farmer (the so-called competitive injury
issue). Cattle and hog producers will benefit from these and other
reforms. But they have been waiting 90 years for the USDA to use the
power it was given by the Packers and Stockyards Act. Although the
administration has promised to take more decisive steps in future
rules, cattle and hog producers should not have to wait any longer for
the USDA to restore some competition to livestock markets.”
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