Op-ed: Market competition is good for consumers, farmers and ranchers

Roger Johnson, National Farmers Union President

In June 2010, the U.S. government provided some simple clarifications to the law that governs the relationship between livestock producers and the meatpackers and processors who buy their animals. This proposed change, known as the Grain Inspection, Packers and Stockyards Administration (or GIPSA) rule, would help to ensure fairness for individual producers and restore competition to agricultural markets. Predictably, it prompted immediate and vigorous backlash from meat processors.

What does the GIPSA rule, so demonized by packers and processors, actually do?

It protects the basic rights of family farmers. The rule prevents packers and processors from driving farmers and ranchers out of business one at a time, and it protects producers who speak out against unfair business practices. Poultry integrators will no longer be allowed to unfairly force growers to make expensive equipment changes without adequate compensation. Livestock markets will be more competitive because two or more packers will be prohibited from sharing a single livestock buyer. Hog farmers who were kept in the dark about each others’ contracting agreements could compare their contracts and other vital documents to make sure they are being treated fairly.

These are examples of some of the common-sense rights that small-business owners in other sectors currently enjoy. Any critic who claims the proposed GIPSA rule is “regulatory overreach” that will “kill jobs” does not have farmers, ranchers and consumers’ interests in mind. But the GIPSA rule is not just important for family farmers. Consumers need it, too.

Unless the GIPSA rule is implemented as Congress directed, more small farmers will go out of business and meat production will be further concentrated into the hands of fewer and fewer even larger farms. What does this mean to you, the consumer? One recent example is the salmonella outbreak in eggs that occurred in 2010. The outbreak prompted the largest egg recall in history, affecting more than 550 million eggs and sickening nearly 2,000 people nationwide. Those 550 million eggs were marketed under at least 16 different brands that all originated from two factory farms owned by the same individual. If packers and processors successfully kill the GIPSA rule, you can look forward to more production being concentrated in the hands of a few megafarms and the increased possibility that you may someday be eating tainted food from the same farm as schoolchildren in California or a family in Maine.

In order to find the source of the anti-GIPSA rule campaign, one only needs to follow the money to the meatpackers and processors. Family farmers do not have the resources to compete with national messaging campaigns, flawed economic analyses, and full-page ad buys, but we do have grassroots power on our side. I leave it to you to decide who to believe: the largest meatpackers in the country, who made billions in profits last year, or two million American family farmers and ranchers?

Roger Johnson is the 14th President of the National Farmers Union. Prior to his post at NFU, Johnson held the position of Agriculture Commissioner in North Dakota for 12 years and his family farms in Turtle Lake, N.D.