When the new administration came to town in 2009, they promised renewed enforcement of antitrust rules in the agriculture industry. We thought they were a new friend to ranchers and farmers. Now our friends are gone.
At the Organization for Competitive Markets Annual Conference in St. Louis in August of 2009, Phil Weiser, Deputy to Antitrust Chief Christine Varney, and J. Dudley Butler, Administrator of the Grain Inspection and Packers and Stockyards Administration (GIPSA), laid out an ambitious and historic plan to reform the agricultural marketplace.
For the first time in our nation’s history, there was to be a joint DOJ/USDA initiative to restore a competitive marketplace for agriculture. Our antitrust laws were finally going to be enforced and virility restored to the neutered Packers and Stockyards Act of 1921 (PSA) through rulemaking.
More than two years later, we know now that none of this was true. The laws and the enforcement of antitrust laws in agriculture and rural America are no different now than before the 2009 St. Louis meeting. We thought we had found friends and now we wonder where these friends have gone.
Sure, true to Weiser’s and Varney’s pronouncements in St. Louis, five joint workshops were held and a new proposed rule for PSA was published in the federal register in June of 2010. Secretary of Agriculture, Tom Vilsack; Attorney General, Eric Holder; Assistant Attorney General, Christine Varney and GIPSA Administrator, Dudley Butler attended the workshops — a compelling statement that this administration was serious.
Poultry Producers Abandoned
At the Poultry Workshop in Normal, Alabama, some 50 contract growers testified about processor abuses. Almost without exception, they expressed their fears of intimidation and retaliation.
Antitrust Chief Christine Varney received enthusiastic applause when she handed out her card and asked that she be called if reprisals occurred. Well, reprisals did take place and producer contracts were terminated. However, no action was taken by DOJ that I am aware of.
Now, Ms Varney and her Deputy Phil Weiser have both left DOJ, abandoning the poultry growers they said they would protect.
True to his promise, Dudley Butler put forward a proposed rule for PSA that would at least begin to restore the law as the “Producer Protection Act” it was meant to be. Lacking were provisions that would address the critically important captive supply problem, but it was undeniably a significant step forward.
While there was powerful opposition from the big packers and their political lackeys, one particular provision really gave them heartburn — a rule that corrected misguided appellate court rulings requiring that harm to competition across the industry had to be established before harm to an individual or class could be claimed. The appellate court rulings amounted to a get-out-of-jail-free pass for packer and integrator wrongdoing. If these injudicious rulings were allowed to stand, PSA, and its intended protection for producers, would be gutted.
Now The Rule is Dead
After more than 60,000 comments (most of them favorable) and eighteen months, the rule Butler wrote is dead. A Congressional committee has included language in the final appropriations bill that precludes the government from spending any money to implement or enforce the proposed GIPSA rules.
This is a bitter pill, indeed. After pouring effort and emotion into this since the beginning of this administration, we see that the big corporations have prevailed.
It’s dismaying to see the lack of support from the supposed “friends” of small farmers and ranchers in the Senate who didn’t object to this language. How could they have let this happen?
Meanwhile, initially there was lots of PR and hype by DOJ concerning renewed enforcement of antitrust laws; there is still no evidence of litigation against Monsanto, Dean Foods or any action against any of the four major meat packers.
In the meantime, we learned that the National Cattlemen’s Beef Association (NCBA), a leading opponent to the proposed GIPSA Rules and other market reforms, has misappropriated significant funds from the Beef Checkoff program. NCBA is essentially the exclusive contractor, receiving some 98% of the more than $40 million promotion and research fund collected from cattle raisers.
According to information submitted to the IRS, nearly all of NCBA’s total revenue comes from the Checkoff program. It could be fairly stated that their very existence depends on the Beef Checkoff and that producers are being unfairly compelled to finance their opposition.
Given the facts, one would assume that NCBA’s contract would have been summarily terminated by the Secretary of Agriculture, but instead, a USDA audit was initiated. Expected to be completed last month, the audit is now on hold. We are told two more months of work will be required for completion. Meanwhile, NCBA continues to feed off the millions of producer dollars.
A New Ag Apologist
New to the scene is the U. S. Farmers and Ranchers Alliance (USFRA), a confederation of big ag apologists and transnational corporations. They propose to trademark “Farmers and Ranchers,” hoping to ride on the trust the general public has in family farmers and ranchers.
Like NCBA, USFRA is taking from producer commodity promotion funds to augment their $30 million annual media campaign. They have retained Drake and Company as their management agency and Ketchum, a public relations firm, to promote their false image.
So, more than two years after the initiation of an unprecedented joint effort by Justice and Agriculture, and after the five workshops and tens of thousands of written comments, nothing meaningful has happened.
They raised our hopes and expectations and then let us down. Corporate influence and politics have prevailed.
Independent family farmers and ranchers remain alone and unprotected. Friendless.
Fred Stokes is president of the Organization for Competitive Markets, a membership-based organization focused on antitrust and trade policy in agriculture.