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Meat Industry Competition Legislation Debuts

Sen. Tom Harkin (D-IA) introduced the "Competitive and Fair Agricultural Markets Acts to "correct deficiencies in USDA's enforcement over agricultural markets and provided needed protections

Sen. Tom Harkin (D-IA) introduced the "Competitive and Fair Agricultural Markets Acts to "correct deficiencies in USDA's enforcement over agricultural markets and provided needed protections for producers involved in production contracts for agricultural commodities." Harkin said, "Producers need to have a fighting chance in an industry that is becoming far too consolidated and vertically integrated."

The legislation would:

  • "Reorganize USDA to streamline and improve enforcement of the Packers and Stockyards Act (PSA) and Agricultural Fair Practices Act (AFPA) by establishing an Office of Special Counsel. Its sole responsibility will be to investigate and prosecute violations on competition matters. The Special Counsel would be appointed by the President and confirmed by the Senate. This position will also serve as a liaison between the Department of Justice and the Federal Trade Commission.
The legislation also would amend the PSA two ways:
  • Strengthen producer protections by making it easier for them to prove unfair actions by firms without additional burdens of having to prove adverse effects on competition. For example, recent court decisions such as London vs. Fieldale Farms have ruled that in order for producers to succeed in cases involving unfair actions, they must prove how it adversely affects competition for their region. These rulings will now complicate USDA's ability to enforce the PSA.
  • Give USDA authority to enforce the PSA in sales of poultry. It's currently illegal for poultry integrators to engage in unfair or anti-competitive practices, but current law denies USDA enforcement authority to prosecute violations.
In addition, the bill would make the following changes to the AFPA:
  • Prohibit unfair, unjustly discriminatory, anti-competitive or deceptive practices by a person that affects the marketing, receiving, purchasing, sale or contracting of crops.
  • Provide needed contract protections to ensure the production contract clearly spells out what's required of the producer. Harkin's bill would require the producer have at least three days to review or cancel the production contract after signing it. It would prohibit confidentiality clauses so producers can share the contract with family members or a lawyer to help decide whether they should sign it. The legislation would also protect producers from having their production contracts arbitrarily terminated if they have made a sizable capital investment. The bill also prevents mandatory arbitration so producers aren't prevented from going to the courts.
  • Prevents discrimination against producers belonging to an organization or cooperative by removing a disclaimer clause from the AFPA. This disclaimer clause currently allows processors, handlers or contractors to refuse to do business with producers just because they belong to such organizations.
-- P. Scott Shearer, Washington, D.C., correspondent