Director of Government Relations for the Pew Environment Group
The following article first appeared in The Hill.
More than 90 years ago, during World War I, President Woodrow Wilson suspected foul play in the American meat industry. He was right. An investigation by the Federal Trade Commission reported collusion, market manipulation, and other nefarious, behind-the-scenes activities by meatpackers. As a result, in 1921 lawmakers passed the Packers and Stockyards Act, intended to prevent unfair and deceptive business practices in the industry.
Is history repeating itself?
In less than 60 years, the United States has lost more than 1.6 million broiler chicken farms, while the number of the birds raised yearly has skyrocketed by 1,400 percent. Similar trends have affected the cattle and hog industries, in large part due to the consolidation and integration of livestock agriculture as production shifts to an industrial system. But meatpackers, who direct many aspects of the industry, have also squeezed farmers' profits through contracting practices that many believe to be unfair. In recent years, there has been a push to update the law to prevent behaviors that seem to mirror past problems.
The National Contract Poultry Growers Association estimates that farmers provide half the capital in their industry but earn only 1 to 3 percent on their investments. Contrast this with the huge corporations that own the packing and processing plants and control most aspects of the meat business. They can reap a 20 percent return.
For the past decade, farmers and ranchers have again and again called for protection from unfair market practices. Last year the Grain Inspection, Packers and Stockyards Administration (GIPSA), the agency charged with overseeing the Packers and Stockyards Act, proposed rules to correct what some have labeled abusive, monopolistic behavior against U.S. family farmers by meatpackers. The National Farmers Union aptly calls this proposal the "Farmer and Rancher Bill of Rights." The industry has responded as well—with a massive effort to protect its valuable status quo.
The industry claims that increased marketplace competition will lead to job losses, pointing to a study funded by the American Meat Institute. Agricultural economists at the University of Tennessee looked at the analysis in detail. They found that it contrasts sharply with U.S. Department of Agriculture's (USDA) estimates, which termed the costs of the GIPSA rule "negligible." Unfortunately, neither the study nor the USDA estimate addresses the huge changes in American meat production, in which the “get big or get out” approach taken by the meatpacking companies has already pushed thousands of small and medium-sized farmers and ranchers out of business.
Industry seems to be using the argument that any changes proposed to protect consumers or the environment will lead to "job loss." But the American Meat Institute study conveniently neglects to note the mass exodus of farmers and ranchers from animal agriculture over the past 30 years. The National Farmers Union has pointed to the loss of more than 1 million hog and cattle farms and ranches nationwide since 1980 under the current system.
The "Farmer and Rancher Bill of Rights" will help ensure fair and equal treatment under the law for everyone involved in U.S. livestock production. It will be a step forward for the country, not a step back to 1921. The administration should take action.