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News Brief

Sept. 11, 2019 |  By: Molly Gardner

USDA to release regulations to protect from unfair competition

The USDA will soon release new regulations that livestock and poultry producers hope will better protect them from what they see as unfair competition in the highly consolidated meat-packing industry.

The Packers and Stockyards Act was enacted by Congress nearly 100 years ago, but some experts say it hasn't been effectively enforced. Joe Maxwell with the Organization for Competitive Markets says small and mid-size producers need rules to help level the playing field with the large-scale meat-packing companies.

"Congress acted in 2008 and the farm bill in it said to the USDA 'You have to clarify these undo preferences in these issues.  And here were are 11 years later still trying to get the protections that Congress mandated."

Anna Johnson with the Center for Rural Affairs says that under the current rules, farmers face an insurmountable challenge if they go to court against a meat-packing company they believe hasn't compensated them fairly for their livestock or poultry.

"In order for the producer to prove that they were harmed under the contract, they actually have to show that the company's actions harmed not only them and their operations, but also harmed competition broadly for the whole sector, which is generally an impossible standard."

Incomes for farmers have slumped in the past five years, while the costs of feed, seed, fertilizer, fuel and machinery have increased – and tariffs on ag exports have created more difficulties. The Department of Commerce has said personal income for farmers dropped in the first quarter of this year by the largest level in three years.