MONOPOLY MATTERS

Trump’s USDA Sides With Corporate Meatpackers Over Farmers, in Latest GIPSA Proposal

By Open Markets Food & Power Reporter Claire Kelloway

On Monday, the USDA thwarted a decade of efforts to help farmers seek justice for discrimination, retaliation, and unfair treatment by meatpackers. Trump’s USDA introduced new criteria to determine whether a meatpacker violated the Packers and Stockyards Act, after withdrawing an Obama-era proposal two years ago. This latest proposal omits several critical farmer protections from the previous rule and introduces new language that could codify abusive industry practices.

“This rule does not go far enough to safeguard farmers from unfair treatment, nor does it address many of the other difficulties farmers have been suffering at the hands of powerful corporations,” said Roger Johnson, president of the National Farmers Union.

Contract growing models and market consolidation give meatpackers inordinate power to squeeze farmers and determine their success. Farmers face retaliation by packers, such as canceling growing contracts, for organizing or speaking out about poor treatment.

“Corporate bullying, intimidation, and a mafia-like mentality has taken control over this industry,” said former poultry farmer Anthony Grigsby at a news conference earlier this year. Grigsby says he lost his farm when his poultry company withheld chicken feed after he raised concerns about receiving sick chickens or incorrect feed.

The Packers and Stockyards Act outlawed this type of mistreatment by meatpackers and established fair terms of trade for farmers. But during the past four decades, poor court rulings have gutted farmers’ ability to bring cases under the act, even though meatpacking is more consolidated today than it was when the law was passed.

Most critically, courts have claimed that a packer’s action against an individual farmer can only violate the law if the action causes “competitive harm” to the entire industry. In response to this precedent and other troubling legal ambiguities, Congress mandated in 2008 that the USDA clarify aspects of the Packers and Stockyards Act, launching a legal battle that continues to this day.

After a series of hearings where farmers shared stories of mistreatment by meatpackers, often at great risk of retaliation, the Obama administration proposed in 2010 a slate of promising reforms to the Packers and Stockyards Act that were subsequently blocked, watered down, and posted in the final days of the administration. The Trump administration promptly withdrew these rules and dissolved the independent Grain Inspection Packers and Stockyards Administration that oversaw them, relegating its duties to the Agricultural Marketing Services.

The Trump administration finally released on Monday new rules to fulfill the 2008 congressional mandate, but they raise major concerns for farmer advocates. “It’s at best a bare minimum,” says policy advisor for the Organization for Competitive Markets, Joe Maxwell. At worst, new vague language “could actually be more harmful than helpful,” Maxwell argues.

The Trump administration’s rules drop several sections from Obama-era proposals and only focus on defining an “undue or unreasonable” preference by a packer (such as giving white farmers more lenient growing requirements than those given to black farmers). The proposed rules say any differences in farmer treatment that can be justified as a “cost savings” or a “reasonable business decision that would be customary in the industry” would not violate the law, leaving room for corporate packers to carry on with business as usual.

“Practices that are customary and commonplace within the industry are abusive themselves,” says Tyler Whitley, manager of the Contract Agriculture Reform Program at the Rural Advancement Foundation International-USA. “To include criteria that could justify decisions based on what is customary within the industry only codifies abusive practices in law.”

Obama-era proposed rules also included more specific definitions of actions that constitute unfair or undue preference, such as retaliation for speaking out or organizing and discrimination on the basis of race, national origin, sexual orientation, political beliefs, religion, age, or disability.

Finally, the latest rule does not lift the need to prove industry-wide harm in order to pursue a violation, leaving the law largely unenforceable. The USDA has previously said it supports an interpretation of the Packers and Stockyards Act that allows farmers to challenge meatpackers for individual harms, but the latest ruling does not take steps to codify this.

“Even if you put in place these definitions, it doesn’t really matter, if they can’t bring a claim,” notes Angela Huffman, executive director of the Organization for Competitive Markets.

The public will have 60 days to comment on the proposed rule.