FOR IMMEDIATE RELEASE
March 21, 2017
Contact: Andrew Jerome, 202-314-3106
WASHINGTON – Highlighting the iniquities of today’s extremely consolidated livestock and poultry sectors, National Farmers Union (NFU) President Roger Johnson submitted testimony today to the U.S House Agriculture Committee’s Subcommittee on Livestock and Foreign Agriculture.
The testimony advocates for the adoption of the Farmer Fair Practices Rules to offer family farmers and ranchers basic protections from anti-competitive and abusive practices.
“Farmers and ranchers are subject to both monopolistic practices in the agricultural inputs sector and monopsonistic practices in the agricultural production sector,” states Johnson. “For years, USDA has attempted to address the anticompetitive behaviors of the meatpacking industry most recently by promulgating the Farmer Fair Practices Rules. These rules are long overdue.”
Johnson notes that the livestock sectors are more consolidated today than they were 100 years ago. In 1916, the top five slaughterhouses controlled 82 percent of the cattle market and 61 percent of the hog market. Today, just four companies control 85 percent of the beef industry and 74 percent of the pork industry.
“In 1921, Congress passed the Packers and Stockyards Act ‘to regulate the sale of livestock by farmers to the more economically powerful livestock buyers,’” says Johnson. “With the Farmer Fair Practices Rules, the USDA is attempting to clarify the P&S Act, it’s scope, and the rights of farmers and ranchers.”
Johnson also notes that more than half of the poultry industry is dominated by just four firms, and the development of contract farming as the model in the poultry and hog sectors has institutionalized the “monopsony/monopoly relations between farm and agribusiness and the ability of the latter to unfairly capture value by the producer through price manipulation.”
“The two parties that negotiate the contract are not equal,” says Johnson. “This asymmetrical power results in undue influence over contract farmers.”
Johnson says that judicial decisions have weakened the original Act, providing farmers and ranchers with less protection in a more challenging marketplace.
“Family farmers and ranchers operating in an extremely consolidated marketplace should have the full protection of the Packers and Stockyards Act of 1921,” says Johnson. “The Farmer Fair Practices Rules will go a long way to make sure that farmers and ranchers can continue to operate with basic protections under the law.”
The audio file of Roger Johnson’s quote will be available for download shortly at nfu.org/audio.
National Farmers Union has been working since 1902 to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.