The U.S. Department of Agriculture on Tuesday proposed new guidance clarifying how it will enforce competition rules in meat markets as the Biden administration makes food industry consolidation a centerpiece of its plan to tackle inflation.
The proposal would define what is considered “unfair practices” under the Packers and Stockyards Act, a more than 100-year-old bill designed to prevent meatpackers from taking anti-competitive actions that could hurt consumers. Previously, the department determined fairness through administrative arbitration on a case-by-case basis.
“Farmers, ranchers, consumers, and smaller processors all depend upon the Packers and Stockyards Act to protect them from bad actors in the marketplace,” USDA’s Senior Advisor for Fair and Competitive Markets Andy Green said in a statement. “It’s time to provide the regulatory clarity and simplicity needed to put an end to unfair conduct that harms the market or that harms market participants.”
The rule defines unfair practices as conduct that harms the market or market participants such as farmers and ranchers. Among other things, the framework would consider to what extent a practice restricts a farmer’s ability to participate in a market and whether a company’s conduct denies a producer the full value of their products or services.
The proposal comes as USDA works on a suite of rules around transparency and fairness in the poultry and meatpacking industries.
“We applaud the USDA for developing clear regulations that will help prosecute the big packers that run the American Meat Cartel for their mafia-like tactics that have put countless American family farmers out of business,” said Marty Irby, who represents the Alabama Contract Poultry Growers Association and is president of Competitive Markets Action.
Industry groups representing beef and poultry producers have vehemently opposed the department’s competition rules, which they say undermine a longstanding practice of rewarding individual producers for innovation or efficiency.
“USDA’s newly proposed rule is a direct attack on cattle producer profitability,” Ethan Lane, National Cattlemen’s Beef Association Vice President of Government Affairs, said in a statement. “By creating criteria that effectively deems any innovation or differentiation in the marketplace improper, USDA is sending a clear message that cattle producers should not derive any benefit from the free market but instead be paid one low price regardless of quality, all in the name of so-called fairness.”