Open Markets: Agriculture Department Should Use Packers and Stockyards Act to Protect Farmers From Meatpacker Abuse

Washington, DC -- The Open Markets Institute urges the U.S. Department of Agriculture (USDA) to curtail meatpackers’ abusive tactics and to stand up to judicial overreach by reviving the Packers and Stockyards Act (PSA), in a comment filed with the USDA today.

Last month, the USDA proposed a new rule regarding undue and unreasonable preferences and advantages under the Packers and Stockyards Act. In its comment, Open Markets argues that the PSA is an essential statute that protects farmers and ranchers from abuse by monopolistic processors, while establishing fair terms of trade in livestock and poultry markets. Unfortunately, federal courts have corrupted the text of the statute and undermined farmers’ ability to challenge mistreatment by meatpackers. Open Markets argues that the USDA’s proposed rule “threatens to weaken the PSA even further by accepting poor legal precedent, particularly the need to prove a harm to industry-wide competition to pursue a violation under the PSA.”

The USDA has clear authority to issue rules reaffirming Congress’ intent in creating the PSA. To not wield this power would make it difficult to undo the court precedents that have gutted farmers’ protections and allowed for meatpackers to intimidate and abuse farmers with impunity. Open Markets urges the USDA to uphold its long-standing position that harm to industry-wide competition is not necessary to violate the PSA, and Open Markets asks the USDA to issue new rules that clearly lay out examples of unfair, abusive, and discriminatory conduct, as well as examples of unfair and undue preferences.

“Decades of pro-corporate court decisions have gutted farmers’ ability to seek justice under the PSA, which is farmers’ main line of defense against unfair treatment by meatpackers,” said Claire Kelloway, Reporter & Researcher at Open Markets. “These decisions were based on gross misinterpretations and run contrary to the plain text and congressional intent of the statute. However, the USDA has broad authority to rectify decades of poor precedent, and the courts must give it deference to do so. To do anything less would be to roll over to judicial rewriting and to abdicate the agency’s authority, setting a dangerous precedent for future rule-making. The USDA has a moral obligation to protect farmers and ranchers who suffer intimidation, mistreatment, discrimination, and retaliation by dominant corporate meatpackers.”

Read related work by Open Markets here:

Food & Power: Trump’s USDA Sides With Corporate Meatpackers Over Farmers, in Latest GIPSA Proposal

Food & Power: Farmers Speak Out About Meatpacker Mistreatment, Call on USDA for Stronger Protections

Food & Power: Trump Administration Guts Office Designed to Protect Farmers from Ag Monopolies

Policy Report: Addressing Monopolization in America’s Food System

Washington Monthly: Obama’s Game of Chicken