USDA announces next major step in promoting competition in agriculture under Packers and Stockyards Act

USDA

March 18, 2024

WASHINGTON, March 5, 2024 – The U.S. Department of Agriculture (USDA) has announced the finalization of Inclusive Competition and Market Integrity Under the Packers and Stockyards Act. The final rule will be effective 60 days following publication in the Federal Register. The final rule Inclusive Competition and Market Integrity Under the Packers and Stockyards Act (the Inclusive Competition Rule) establishes clearer, more effective standards under the Packers and Stockyards (P&S) Act for prohibited practices relating to discrimination, retaliation and deception in contracting. This will help producers and growers that have suffered from increasingly consolidated markets over the last 30 years by enhancing market integrity and ensuring fair access to economic opportunities.

“Discrimination, retaliation, and deception against producers and growers has no place in modern livestock and poultry markets,” said Secretary of Agriculture Tom Vilsack. “The Biden-Harris Administration is making significant progress in tackling the abuses that have left producers and growers excluded from economic opportunities and fair and equal access to the marketplace. This rule establishes clearer, more effective standards to govern the modern marketplace, and they are another example of how USDA is focused on building new, fairer, more resilient and more competitive markets for our farmers, ranchers, and producers.”

USDA is finalizing a series of rules under the Packers and Stockyards Act as part of President Biden’s historic Executive Order on Promoting Competition in America’s Economy, a key pillar of Bidenomics. These rules complement a series of other all-encompassing actions by USDA to increase competition in agricultural markets, create a fairer playing field for small- and mid-size farmers, lower grocery costs for consumers, and strengthen local and regional food systems. Actions include enhancing independent meat and poultry and other diversified food processing capacity, expanding domestic, innovative fertilizer production, creating a fairer market for seeds and other agriculture inputs, investing in State Attorney General enforcement capacity and supporting more robust and resilient supply chains. These investments will create better economic opportunities, which will result in more affordable prices and choices for consumers at the grocery store, in addition to more opportunities and revenue for producers.

“The Packers & Stockyards Act stands for the basic proposition that livestock producers and poultry growers should be able to compete, cooperate, communicate, and more, without fear of retaliation, and should never be subject to discrimination because of who they are or deceptive in their contracting,” said USDA’s Senior Advisor for Fair and Competitive Markets Andy Green. “To deliver the best products and the most competitive prices, we need competitive markets and markets with integrity. That’s what this final rule is designed to deliver.”

The rule:

  • Prohibits the adverse treatment of livestock producers and poultry growers based on race, color, religion, national origin, sex (including pregnancy, sexual orientation, and gender identity), disability, marital status, or age. It also prohibits discrimination against a livestock and poultry producer cooperative.
  • Prohibits retaliation against producers and growers for their engaging in certain protected activities: lawful communications or refusals to communicate, assertion of contractual and Packers & Stockyards Act rights, participation in associations and cooperatives, exploring or entering into a business relationship with a competing packer/swine contractor/live poultry dealer, and certain other protected activities.
  • Prohibits employing false or misleading statements or omissions of material information in contract formation, performance, and termination; and prohibits regulated entities from providing false or misleading representations regarding refusal to contract.
  • Supports USDA monitoring, evaluation, and enforcement of compliance with aspects of this rule through certain recordkeeping requirements.

This rule is part of a suite of Packers and Stockyards Act rules proposed by USDA to enhance transparency, stop discrimination, and support market fairness in a range of circumstances. The final rule will be published in the Federal Register.

Industry groups respond

NCBA Statement on Latest Packers and Stockyards Rule:

National Cattlemen’s Beef Association (NCBA) Vice President of Government Affairs Ethan Lane has issued a statement following the release of the U.S. Department of Agriculture’s (USDA) latest Packers and Stockyards rule:

“NCBA’s concern with this regulation has always been based in the rule’s unforeseen impacts to standard business practices. We have remained consistently opposed to any discriminatory practices in the marketplace. While we still have concerns about the unintended consequences of the rule, we are pleased that USDA has addressed most of our significant concerns between the proposed and final rules. We continue to urge USDA to ensure this rule remains focused on its stated objective—with which we wholeheartedly agree—and does not stray into extraneous, unrelated subject matter discussed in the proposal’s preamble.”

North American Meat Institute statement:

The latest attempt by the Biden Administration to disrupt the meat and poultry industry with changes to the Packers and Stockyards Act’s (PSA) regulations does nothing to encourage competition and instead attempts to give new authorities to the U.S. Department of Agriculture (USDA) to exert federal control over business contracts.

“The Biden Administration says these changes to the PSA’s regulations are about increasing competition, but they have nothing to do with competition,” said Julie Anna Potts, president and CEO of the Meat Institute. “These changes are simply an attempt to assert even more federal authority to regulate the equities of industry business practices, clogging the federal courts with every contract dispute. Congress never intended to give the agency such broad-ranging authority over meat industry contracts and practices, regardless of their effect on competition – and the courts have agreed.”

“While the actions described by USDA have no place in the meat industry, other federal statutes and state laws already exist to address the rare instances in which they may occur,” Potts said. “An antitrust statute is not the appropriate statute for these rules.”

“At a time when Americans are paying more and more for food, the President and his Administration continue to pursue policies that will be directly responsible for the increased cost of meat for consumers,” Potts said. “From Secretary Vilsack’s proposed changes to the Packers and Stockyards Act’s rules to USDA’s delayed modernization of pork inspection to EPA’s proposed wastewater guidelines, these policies will prove costly to the 98 percent of American households who purchase meat to feed their families.”

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