The Biden administration is taking new steps to protect producers from discriminatory practices, through a combination of new Agriculture Department regulations and funding to states for increasing enforcement of competition laws.
The proposed new regulations are laid out in the second of three rules the department is developing to address competition in the meat and poultry sector and follows language aimed at the “tournament” compensation system for producers rolled out in May. The latest rule which has not yet been published in the Federal Register, is designed to “promote inclusive competition and market integrity in the livestock, meats, poultry and live poultry markets,” a draft version of the rule says.
“Highly concentrated local markets in livestock and poultry have increasingly left farmers, ranchers, growers and producers vulnerable to a range of practices that unjustly exclude them from economic opportunities and undermine a transparent, competitive, and open market—which harms producers’ ability to deliver the quality, affordable food working families depend upon,” Ag Secretary Tom Vilsack said in a statement.
USDA announced the rule in advance of President Joe Biden’s anticipated discussion of the proposal at a Monday afternoon meeting of the White House Competition Council. A four-pronged approach will be in the administration’s proposal with the goal of changing how the department enforces the Packers and Stockyards Act.
According to USDA, the rule “prohibits certain prejudices and disadvantages against covered producers” deemed as “market vulnerable individuals.” That group is further defined as “those at heightened risk of adverse, exclusionary treatment in the marketplace, which may include on the basis of their race, gender, sexual orientation, and religious affiliation.”
The rule also includes language to bar retaliation against producers who communicate with the government or anyone else about the terms of their contract or potential action against a company regulated by the PSA. There’s also protections for producers who might assert their rights under contracts with integrators or who might choose to join certain associations.
Third, the rule spells out contract practices that would be banned under the proposal, primarily spelling out the “pretext, false or misleading statements, or omission” of facts during the formation, operation, termination or refusal of a contract.
There’s also language in the proposal requiring recordkeeping by regulated entities as well as the ability of USDA to inspect the relevant records to ensure compliance. A USDA release specifically calls out “policies and procedures, staff training and producer information materials, data and testing, board of directors’ oversight materials,” and other relevant materials as some of the reports that might be collected by USDA.
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National Farmers Union President Rob Larew called the announcement "great news and yet another sign that the Biden Administration is putting competition and fairness for farmers at the forefront of their agenda.
"Consolidation and lack of competition have absolutely gutted the ag economy," he added. "Important steps like these to strengthen and more fully enforce the Packers and Stockyards Act are welcome developments to Farmers Union members across the country."
Vilsack sought to reform PSA enforcement during his previous term as secretary during the Obama administration, but a rule he proposed in December 2016 was ultimately repealed by the Trump administration in 2017. The Biden administration has since prioritized anticompetitive matters in its agribusiness oversight, including through a July 2021 executive order.
Groups representing meat industry groups welcomed the Trump administration's repeal of what was then colloquially called the "GIPSA rules." On Monday, Mike Brown, the president of the National Chicken Council, said the group had not taken a firm stance on the new language but noted its past position.
“NCC has opposed similar rules in the past, rules that were rejected by both Congress and eight different circuit courts of appeal,” said National Chicken Council President Mike Brown.” We are reviewing the details of the new proposed rule and look forward to providing input during the comment period.”
For her part, North American Meat Institute spokesperson Sarah Little said the language "warrants more study.
"However, on initial review the proposed regulations are vague, providing ambiguity where clarity is needed and raising numerous questions," she said. "Regulated entities must have – and deserve – clear rules to help ensure compliance."
USDA is also poised to launch a new $15 million “Agricultural Competition Challenge” with state attorneys general by encouraging them “to partner with USDA on competition issues in the food and agriculture space.”
State attorneys general will work with USDA on “a combination of cooperative agreements and memorandums of understanding” to address anticompetitive practices and utilize the additional funding to “improve state AG capacity to conduct on-the-ground investigations of competition issues.” The effort also aims to enhance federal and state cooperation and create new independent research programs.
All told, USDA expects the efforts will “ultimately result in more rigorous enforcement of the competition laws.”
The proposed rule will be open for public comment for 60 days once published in the Federal Register.
Story updated to include NFU, NAMI and NCC reaction.
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