USDA issues Packers and Stockyards Act final rule |

USDA issues Packers and Stockyards Act final rule

The Hagstrom Report


The Agriculture Department’s Agricultural Marketing Service on Dec. 10, 2020, issued a final rule the Trump administration says establishes the criteria to determine whether an undue or unreasonable preference or advantage has occurred in violation of the Packers and Stockyards Act, 1921.

The rule is scheduled to be published Friday in the Federal Register.

North American Meat Institute President and CEO Julie Anna Potts said, “The rule recognizes the importance of marketing agreements and other, similar tools used by producers and packers and provides some guidance and clarity regarding the criteria the secretary will consider when reviewing the use of those tools.”

“This rule also, however, introduces some uncertainty into the use of those tools by allowing consideration of other, undefined, factors,” Potts said. “We will move forward and continue to work to ensure livestock producers have a variety of tools available to market their animals and to ensure meat and poultry markets remain competitive.”

National Farmers Union President Rob Larew said the rule fails to protect farmers from discriminatory practices.

“In their relationship with meat packers and processors, family farmers have almost no bargaining power,” Larew said in a news release.

“Unlike individual farmers, these corporations have immense economic resources and political clout, which means they call the shots — and when they behave unfairly, as they often do, they usually face no repercussions.

“Farmers have been practically begging legislators to balance the scales and protect them from predatory practices ­— but for some reason, their pleas have been all but ignored. Rather than offer farmers the very basic safeguards they’ve been asking for, USDA’s rule will inexplicably offer even more power to meatpackers, further tipping the scales in their favor.

“The government’s favoritism toward corporations at the expense of family farmers and ranchers has gone on long enough. The incoming administration must reverse this harmful rule and replace it with one that actually protects farmers from unfair, deceptive and discriminatory practices.”

R-CALF USA CEO Bill Bullard said, “It is disappointing that during this time when the disparity in market power between highly concentrated meatpackers and widely dispersed producers is so obvious, the USDA has ignored this by ensuring the Packers and Stockyards Act protections meant to benefit producers are actually implemented in a way to favor the packers.”

“The USDA’s final rule undermines the purpose of the Packers and Stockyards Act by providing packers with a list of ‘safe harbors’ to employ anytime they face a producer’s allegation that they have violated the undue and unreasonable preference section of the act.

“As a result, when producers are in need of seeking protections against a packers’ granting of undue or unreasonable preferences, the producers’ burden will shift from proving a packer violated the act to now having to prove the packer does not qualify for any of the various safe harbors the USDA has created to protect packers from effective enforcement.

“We will immediately ask the administration to voluntarily rescind the final rule as well as ask Congress to intervene to ensure the undue preferences provisions of the Packers and Stockyards Act are not permanently rendered ineffectual.”

Eric Deeble, policy director at the National Sustainable Agriculture Coalition, said “”The rule fails to advance any meaningful reforms to address the abusive and exploitative practices conducted by these corporations for decades.”

“We are counting on the new incoming Biden-Harris administration and the incoming secretary of Agriculture to not only rescind the Trump administration rule, but to also bring back all of the ‘Farmer Fair Practices Rules’ and ensure that those previous rules are improved upon,” Deeble said.

“Unfortunately, the final rule issued today does not do enough to prevent integrators from circumventing the purpose of the Packers and Stockyards Act and it fails to restore competition to the market to put our farmers and ranchers on a fair footing,” added Deeble.

NSAC noted that the rulemaking is part of the directive in the 2008 farm bill instructing USDA to establish criteria under the Packers and Stockyards Act.

–The Hagstrom Report