NFU Public Comments Strongly Endorse Fair Practice Rules
WASHINGTON – On behalf of nearly 200,000 family farm and ranch members, National Farmers Union (NFU) President Roger Johnson submitted public comments to the U.S. Department of Agriculture (USDA) yesterday, advocating for the agency to finalize the Farmer Fair Practices Rules. The rules would provide family farmers and ranchers with protections against anti-competitive and abusive practices.
“Family farmers and ranchers are operating in an extremely consolidated agricultural marketplace, where lack of competition provides the major meat companies with tremendous power,” said Johnson. “Farmer Fair Practices Rules provide family farmers and ranchers with the most basic of protections against egregious and anti-competitive practices. They are long overdue and we urge the USDA to finalize them as soon as possible.”
In his comments, Johnson highlighted the extreme consolidation in the livestock and poultry sectors, noting that just four giant meatpacking companies control 85 percent of the beef market, 74 percent of the pork market, and more than half of the market for poultry.
“Due to a lack of competition across the agricultural sector, farmers are subject to both the bargaining power of sellers of agricultural inputs and the bargaining power of buyers of the products farmers grow,” said Johnson.
Johnson said that this bargaining power has allowed processors and integrators to institutionalize many unfair and abusive practices, particularly in the poultry and pork industries.
“The development of contract farming as the model in the poultry and hog sector has institutionalized the ‘monopsony/monopoly relations between farm and agribusiness and the ability of the latter to capture value by the producer through price manipulation.’ The two parties that negotiate the contract are not equal. This asymmetrical power results in undue influence over contract farmers.”
“The status quo system of indentured servitude by contract growers who are subject to increasingly offensive demands by integrators is simply unacceptable,” he added.
Johnson noted that the Farmer Fair Practices Rules update the Packers and Stockyards Act of 1921, which was passed to protect competition in the meatpacking industry.
“Congress passed the Act with recognition that the previous antitrust acts did not adequately protect farmers and consumers from the monopolistic practices of the meatpacking industry,” stated Johnson. “The Act set out to regulate meatpackers engaging in unfair or deceptive practices that harm individual farmers.”
“Over the last few decades, judicial decisions have weakened the original act, providing farmers and ranchers with less protection in a more challenging marketplace. These rules will go a long way to make sure that farmers and ranchers can continue to operate with basic protections under the law,” he concluded.
National Farmers Union has been working since 1902 to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.