'Monopolistic food system' impoverishes rural communities, rancher says
By TIM HEARDEN
Two years after a series of workshops by U.S. Agriculture Secretary Tom Vilsack and Attorney General Eric Holder to discuss competition in agriculture, a group of farmers and ranchers says not enough has been done to curb monopolies that hurt producers.
Ranchers and grain farmers, including several who were on discussion panels at the workshops, complained during a conference call with reporters March 15 that powerful packers and seed companies still hold down prices that producers receive for their crops and livestock.
Unfair practices from a "monopolistic food system" are taking away income from rural communities, said Robert Mack, a Watertown, S.D., rancher and cattle feeder. Mack was part of a panel discussion on market structure at the August 2010 hearing in Fort Collins, Colo, which dealt with consolidation of the beef industry.
"The impression was that there was overwhelming support for the proposed changes to strengthen the Packers and Stockyards Act," he said.
Kay Doby, a former contract poultry grower who raises meat goats in Cameron, N.C., said the worst abuses are in the poultry industry, where "farmers have become serfs on their own land." Companies often require growers to do costly upgrades on their own farms and have canceled contracts with people who spoke out about industry conditions, she said.
The call was organized by the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, which was a staunch backer of a proposal unveiled in June 2010 to add new regulations to the Packers and Stockyards Act of 1921 and set broad new controls over how animals are bought and sold.
After holding the five workshops and taking more than 60,000 written comments, the USDA deliberated for more than a year before Congress voted in November to prohibit most of the reforms from being enacted. The USDA issued a stripped-down antitrust rule in December, including a set of guidelines for packers and a requirement that meat companies give farmers the right to opt out of mandatory arbitration clauses in their contracts.
Livestock and poultry groups such as the National Cattlemen's Beef Association and the National Pork Producers Council had argued the original rule would cause major disruptions in business.
But Rhonda Perry, director of the Missouri Rural Crisis Center and a livestock and grain farmer, lamented on the call that four beef slaughter firms control 82 percent of the market while the top four pork packing firms control 67 percent.
"In the pork industry since 1985, we've lost 85 percent of our hog farmers, the retail cost has gone up 100 percent and farmers' share has decreased by 32 percent," Perry said. "There are some winners in this game of corporate concentration ... but those winners clearly aren't farmers and consumers.
"We were dealing with an administration whose president had campaigned on these very specific issues around concentration in the livestock industry," she said.
Stephanie Chan, a USDA spokeswoman, did not immediately respond to a request for comment.
The participants said they hoped for passage of a bill introduced last month by Sen. Charles Grassley, R-Iowa, that would make it illegal for a packer to own or feed livestock for slaughter. They said they also hope tighter controls are included in the 2012 farm bill.
Mack equated reforms to the role of referees in the NCAA basketball tournament, where large and small universities compete under the same rules.
"We have to be able to compete in a fair and competitive market environment," he said.
Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America: http://www.r-calfusa.com