Dear USDA: Issue the Packers and Stockyards Rules Now!

Farm Action to USDA: Act Now!

Here at Farm Action, our team is always working to level the playing field for farmers and ranchers — even when government agencies seem reluctant to follow through on their promises. A big part of that work is on the Packers and Stockyards Act (P&S Act), a 100 year old law meant to hold meatpackers legally responsible for unfair and exploitative practices. 

Last July, President Biden issued an executive order on competition and directed the USDA to strengthen the P&S Act by issuing new rules. The regulatory actions set out in the executive order should have been nothing new to Secretary Vilsack and the USDA: They are the same issues Secretary Vilsack and Attorney General Holder developed following five joint workshops in 2010, and the exact same issues contained in the Farmer Fair Practice Rules, which were issued in 2010 and again in 2016. Despite the fact that this is familiar territory for the USDA, we see the agency making little progress. 

More than a year into Secretary Vilsack’s latest term, we are tired of waiting. And so we sent a letter — drafted by Democracy Forward, and in partnership with Open Markets Institute, R-CALF USA, United Food and Commercial Workers International Union, and the Western Organization of Resource Councils — to the Biden administration and officials at the USDA. The letter carefully demonstrates USDA’s clear legal authority to issue a rule that clarifies its stance on competitive injury: a producer should not have to show harm to competition to prove a violation of the P&S Act by a meatpacker. 

With this letter, we are telling the USDA that they can and should act without delay to help farmers and ranchers struggling under the thumb of anti-competitive corporate monopolies.

Wait. What is “Competitive Injury,” and Why Does It Matter?

Competitive injury is a legal standard established by the federal courts: Currently, producers who have been harmed by unfair practices must also prove the entire industry was harmed in order to bring a claim. This standard is next to impossible and has only served to protect corporate monopolies from legal action.

The USDA rule would clarify its longstanding position that parties do not need to demonstrate sector-wide harm in order to bring action for market abuses.

What Happens Next?

The competitive injury rule is one of three the Biden executive order directed the USDA to enact. A second rule will deem certain practices illegal under the poultry tournament pay system, in which contract growers in one geographic area are grouped together. This system pits friends and neighbors against one another, and should be completely repealed. 

The third change will clarify what conduct is considered unfair, discriminatory, or deceptive; it would also define which practices are considered preferential, advantageous, prejudicial, or disadvantageous to competition. 

Farm Action pledges to keep USDA officials’ feet to the fire using every tool at our disposal, and to keep our supporters informed.