The agency’s rejection of a proposed regulation abandons independent meat producers

Every day, independent livestock and poultry producers operate within a marketplace dominated by a handful of very large, mostly global meat companies. The overwhelming market power of companies like Smithfield, JBS and Tyson, to set prices and determine market rules, reduces competition and prevents independent producers from pursuing a fair return. Today, the Trump administration declared its allegiance with the global meatpackers by rejecting a proposed regulation that would have enabled independent producers to more easily challenge anti-competitive business practices in a court of law.

The Packers and Stockyards Act (PSA) was designed to provide protection to American farmers and ranchers against unfair, deceptive and discriminatory practices. Currently, meat and poultry farmers seeking justice against fraudulent, abusive or deceptive practices must prove that meatpacker practices have harmed the whole industry, not just the farmers bringing a case. The proposed rule, finally introduced by the Obama Administration after years of delay, clarifies the intent of the PSA by stating that individual farmers and ranchers challenging the contracting and buying practices of meat and poultry companies in court do not have to prove harm to the whole market – a near impossible task – to demonstrate their farm or ranch has been harmed.

In June comments to the USDA, IATP strongly supported the proposed regulation, pointing out the unfairness of the current standard to protect independent producers: “This blatantly unfair standard has no statutory basis in the Packers and Stockyards Act. To require each farmer and rancher to commission an econometric study claiming to show whole market harm is to deny due process and equal treatment under the law with those entities that can pay for such studies. Econometric results are policy scenario dependent, so even if a farmer could afford such evidence, a meat packer facing adverse evidence could exhaust a farmer’s litigation funds by arguing against the policy scenario. The IFR (proposed) rule levels the playing field and allows farmers to seek legal remediation for harms done against them by corporate meat packers and integrators without being forced to pay for an impossible standard of proof.”