Democrats pushed a bill though the House Agriculture Committee on Wednesday that would create a special investigator's office in the Agriculture Department to probe allegations of unfair practices by meat and poultry processors, whom the Biden administration is seeking to blame for food inflation.
One Republican, Dusty Johnson of South Dakota, voted for the measure, which the committee approved, 27-21.
A companion bill sponsored by Sen. Jon Tester, D-Mont., is pending before the Senate Agriculture Committee, along with a separate measure sponsored by Sens. Deb Fischer, R-Neb., and Chuck Grassley, R-Iowa, that would require USDA to mandate minimum levels of cash trading in cattle markets. Tester's bill has several Republican co-sponsors, including Grassley and Mike Rounds, R-S.D.
During committee debate on the House bill Tuesday, the measure's lead sponsor, Abigail Spanberger, D-Va., argued that the Justice Department doesn’t have the resources to adequately investigate antitrust concerns in the meat industry. But major livestock and poultry industry groups are opposed to the legislation, which Republicans claimed would enable USDA to harass meat processors for political reasons.
"Rather than focusing on adequate staffing and funding for the woefully under-resourced Packers and Stockyards Division at USDA, this hasty proposal was rushed through the legislative process without consideration of the confusing bureaucratic mess it would create," said Ethan Lane, vice president of government affairs for the National Cattlemen's Beef Association.
"Arming USDA with unchecked subpoena and prosecutorial power while significantly undercutting the Department of Justice’s role in the process is poor practice."
Meat processors are particularly concerned about the bill because of new regulations that the administration is finalizing to make it easier for producers to challenge industry practices.
The rules "are likely to have far reaching, unintended adverse consequences. The special investigator (and staff) would feel emboldened and obligated to bring as many cases as possible, warranted or not, to test and expand the legal limits of the new rules," said Julie Anna Potts, president and CEO of the North American Meat Institute, which represents processors.
The cattle industry in particular has long been divided regionally over what to do, if anything, about the market power of processors. Spanberger noted that her bill was supported by the Virginia Cattlemen's Association and National Farmers Union.
In a statement to Agri-Pulse explaining his vote for her bill, Johnson said, “Producers don’t have a lot of confidence that DOJ is digging deep. Given that, I think having a USDA cop on the beat who really understands these markets is worthwhile.”
The committee's action comes as the White House and congressional Democrats are arguing that the meat industry has been using its market power to drive up food costs. Grocery prices have risen 10.8% over the past year due to increases in a broad range of products, according to the Consumer Price Index.
"We see price gouging as it has to do with beef and poultry and pork products," House Appropriations Committee Chairwoman Rosa DeLauro, D-Conn., said at a hearing Wednesday with Lina Khan, chairwoman of the Federal Trade Commission. Rep. Mark Pocan, D-Wis., said consumers "are paying more than they need to" due to meat industry concentration.
During Tuesday's House Ag debate, Rep. Austin Scott, R-Ga., accused Democrats of trying to "create a scapegoat for your failed economic policies."
At a recent Ag Committee hearing, executives with the nation’s largest beef packers denied accusations that they had colluded to suppress prices or competition for beef cattle throughout the country.
For more news, go to Agri-Pulse.com.
