USDA looks to clarify meaning of ‘unfair practices’

Vilsack says new Packers and Stockyards rule will help markets function fairly and competitively.

June 26, 2024

2 Min Read
Butcher processing meat
Getty Images/dusanpetkovic

USDA is proposing a new rule intended to clarify what constitutes an “unfair practice” under the Packers and Stockyards Act. The proposed Fair and Competitive Livestock and Poultry Market rule specifies that certain practices may be deemed unfair even if they only impact an individual or a small number of producers.

Agriculture Secretary Tom Vilsack says the rule is an enforcement tool that will bring greater balance in the relationships between farmer and integrator.

“All of this is designed in combination with the resources and investment we’ve made to create the opportunity for more new and better markets,” he says. “And that translates to an opportunity for more farmers to have an opportunity for their operation to remain successful and profitable.”

Vilsack made the announcement during a June 25 event at the Center for American Progress in Washington. According to him, entrenched market power and the abuses that flow from it remain an obstacle to achieving lower prices for consumers and fairer practices for producers.

“Today’s proposed rule stands for clear, transparent standards so that markets function fairly and competitively for consumers and producers alike,” he says. “With our whole-of-government approach to competition and resiliency, the Biden-Harris administration is fighting every day to lower costs for American families and give farmers a fairer shake.”

The proposal stipulates that unfair practices are not only those that injure producers, but also ones that may negatively impact competition. That’s because those practices injure or tend to injure competition or competitive market conditions.

USDA officials say the new rule is based on administrative case law, citing precedents established under other unfair practices laws. They contend it will better enable the Agricultural Marketing Service to ensure fair and competitive livestock, meat and poultry markets. That, they say, will ensure producers receive the full value for their products and services.

This is the fourth recent addition to the Packers and Stockyards Act. Reaction from the ag world to the latest proposal was mixed. National Farmers Union President Rod Larew thank Vilsack and the Biden administration for issuing important update to the P&S Act. He said the NFU looked forward to reviewing the rule to ensure it protects farmers from abuses in the marketplace.

“Family farmers and ranchers continue to face unfair practices at the hands of monopolistic meatpackers, and they need P&S Act rules that are clear, durable, and enforceable,” Larew said.

National Cattlemen’s Beef Association Vice President of Government Affairs Ethan Lane called the proposal direct attack on cattle producer profitability.

“By creating criteria that effectively deems any innovation or differentiation in the marketplace improper, USDA is sending a clear message that cattle producers should not derive any benefit from the free market but instead be paid one low price regardless of quality, all in the name of so-called fairness,” he said.

Once the new rule is published in the Federal Register, the public will have 60 days to comment. After that, USDA will consider feedback before drafting a final rule.

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