Controversial ag spending bill kills local food systems, promotes meat monopoly
June 22nd, 2011
By Rady Ananda
Plutocrats aimed another weapon at the nation’s poor and at small and midsized farmers, this time thru the 2012 agriculture appropriations bill, H.R. 2112, which the House passed on June 16. The 82-page bill returns some federal spending to 2006 levels and others to 2008 levels.
Now being reviewed by the Senate Appropriations Subcommittee on Agriculture, the final version of HR 2112 will lay the terrain on which the 2012 Farm Bill will be crafted.
Key sections provide deep cuts to domestic food programs, threatening food banks, low-income seniors, women and children, and farmers markets supported by WIC vouchers issued thru the Women, Infants and Children program.
HR 2112 also made deep cuts to rural development, conservation and eco-remediation programs, and to local and regional food system development programs. This can be seen as nothing other than a punitive response to the growing local food sovereignty movement.
Earlier this year, Maine and Vermont enacted home rule ordinances to protect small farms from the overreaching hyper-regulation of the Food Safety Modernization Act (FMSA), which became law in January. On June 10, the State of Maine passed a Joint Resolution in support of local food sovereignty.
One positive provision in HR 2112 prohibits the Food and Drug Administration from spending any funds to authorize genetically modified salmon.
Contrary to some media reports, Congress did not “ban GM salmon,” nor did the House “pass a law” thru HR 2112. A federal law is enacted only after Congress (both the Senate and the House of Representatives) passes it and the US President signs it.
GIPSA Rules Defunded
By far, though, the most controversial cut in the 2012 Farm Bill relates to “GIPSA Rules,” which would begin ending unfair trade practices in the meat industry. Everyone who eats animal products should understand how this works, because these rules not only benefit small operators, but also product quality, food security and the environment.
HR 2112 prohibits GIPSA – the Grain Inspection, Packers and Stockyards Administration – from using funds to finalize antitrust rules in the meat industry.
This overturns a key provision in the 2008 Farm Bill, which required the USDA to develop those rules.
“Some question whether the Appropriations Committee can overturn national legislation,” said National Farmers Union president Roger Johnson in a press conference today.
Speaking for a coalition of cattle and hog producers and poultry growers, Johnson demanded that President Obama keep his campaign promise to reform livestock and poultry markets.
“The GIPSA Rule reinstates the USDA’s long-held interpretation of the Packers and Stockyards Act that was overturned by 2005 and 2006 court cases,” he said.
In both those cases, the 11th Circuit Court of Appeals upheld the lower court's rejection of the jury verdict. In the 2005 case, London v. Fieldale Farms, the jury awarded London $164,000. In the 2006 case, Pickett v. Tyson, the jury awarded $1.28 billion to Pickett for eight years of price fixing by Tyson.
Substantively, the London court held that an operator must show harm to the entire industry, not just the plaintiff.
Under the GIPSA rules, “Farmers and ranchers no longer have to prove unfair practices harm the entire industry, only that the abuses damaged plaintiff,” said Johnson.
This is the usual standard in tort law. Can you imagine being hit by a car and having to prove the defendant’s action was harmful to all drivers? Of course not. The court ruling flies in the face of common sense and entrenches monopolistic power.
In Pickett, U.S. District Court Judge Lyle Strom absurdly reasoned that price manipulation is allowed if the perpetrator has a business interest in doing so. By this logic, companies can do whatever they want to improve profits, despite laws against such actions.
Judicial corruption aside, the USDA’s failure to fully enforce the Packers & Stockyards Act of 1921 and other anti-corporate farming laws has resulted in the loss of nearly a million operators in the beef, pork, poultry and specialty meat market over the past 30 years.
This chart shows figures just for the pork industry, from info derived from the National Pork Board’s 2010 Quick Facts. Ninety percent of family hog operations and 95% of midsized operations have folded in the past 34 years.
When Congress passed the Packers & Stockyards Act of 1921 (PSA), it sought to bust the monopoly of the Big 5: Armour, Swift, Wilson, Morris, and Cudahy, which then controlled 75% of the meat packer market.
Today, four firms control 85% of the market: Tyson (IBP), Cargill (Excel), ConAgra (Monfort), and Farmland National Beef.
Clearly, the PSA's enforcers have not done their legally mandated job of increasing competition in the meat industry.
Defunding the GIPSA Rules clarifies federal priority to protect the rich at the expense of the rest of us.
Though mandated over three years ago, the USDA still has not formalized the GIPSA rules. At today’s meat coalition press conference, speakers urged the USDA to finalize the rules.
The Farm and Ranch Freedom Alliance (FARFA) explains that these firms use their monopoly power to “manipulate markets, deny or severely restrict market access to independent livestock producers, and use unfair practices like confidentiality clauses to the detriment of both contract producers and independent producers.”
Mike Callicrate of R-CALF USA calls it “predatory pricing.”
“The big packers, so called, stand between hundreds of thousands of producers on one hand and millions of consumers on the other. They have their fingers on the pulse of both the producing and consuming markets and are in such a position of strategic advantage they have unrestrained power to manipulate both markets to their own advantage and to the disadvantage of over 99 percent of the people of the country.”
So spoke Wyoming Senator John Kendrick in 1921, on the floor of the U.S. Senate, arguing the need for the Packers and Stockyard Act.
Market concentration is even worse today.