USDA Tells Big Ag to Stop Bullying Small Livestock Farmers

Last month, the USDA released a draft of new rules updating the Packers and Stockyards Act, a law meant to stop meatpackers and processors from pushing around small farmers. In practice, the law clearly fell short of its goals. These new rules fulfill two sections in the 2008 Farm Bill and address some of the unfair and anti-competitive practices rampant in the meat industry. Big Ag lobbying groups are furious about the proposals, so you know they must be good.

These new rules do a number of things to protect small farmers from being screwed over by large packing and processing companies. The rules explicitly ban treating smaller producers differently simply on the basis of size (as is common today), require contractors to keep records justifying any differences in price paid to different growers, and they allow farmers to seek action against packers and contractors for a number of unfair practices. As the current law is understood, farmers don't even have that right unless they can prove that the unfair action stifles competition throughout the entire marketplace, a significantly higher burden of proof than simply addressing the farmer's own grievances. The rules limit the amount of capital investments a contractor can require of a grower, and they mandate that a contract must be long enough to allow the grower to recoup at least 80 percent of any capital investments the contractor has required. That means no more requiring a farmer to spend $50,000  updating their facilities and then deciding not to renew their contract when the farmer has only made, say, $20,000 in profit, leaving that farmer in serious debt with no way to make money from such specialized equipment.

These are just a few of the changes that will make livestock contract arrangements much fairer, but I can't help but think that a number of very basic, underlying problems still aren't addressed. Contract growing by its very nature means that growers will earn a smaller profit and be beholden to a larger company for most, if not all, major business decisions. Contractors can still mandate that certain growing procedures be utilized, and that almost always means inhumane and destructive factory farming. While a number of the most egregious acts of bullying will be ruled out, I see ample opportunity for the packers and contractors to keep producers firmly under their thumbs. Real change will come when the law makes it  easier for farmers to market their own product, skipping the middlemen and allowing them to become masters of their own destiny.

In the meantime, these rules are simple, fair, and will help thousands of farmers in tangible ways. But members of the House Agriculture Subcommittee, lawmakers who are unfortunately often in Big Ag's pocket, recently universally reviled the rules, and meat industry lobbyists are gearing up for a major push to weaken these rules during the commenting period. As the recent egg rules taught us, the comments the government receives during this time can have a huge impact, so get out there and make your voices heard. The government is accepting comments until August 23, 2010.

Photo credit: Javier Lastras via Flickr