Market Reform Efforts Held Captive to Politics?

by Fred Stokes

At the OCM 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.

True to these pronouncements, 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.

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 purported to 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 – the Proposed Rule 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 stand, PSA, and its intended protection for producers
will be gutted.

After more than 60,000 comments (most of them favorable) and eighteen months, the proposed rule still languishes. When it will be finalized is unknown.

While 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 NCBA, a leading opponent to the proposed GIPSA Rules and other market reforms, has misappropriated significant funds from the Beef Checkoff program. They are essentially the exclusive contractor, receiving some 98% of all funds paid to contractors from the approximately $80 million promotion and research fund. According to their information submitted
to the IRS, 80% of their 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 OIG Audit was initiated. Expected to be completed last month, it 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.

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 robbing 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.

Using commodity promotion funds in this manner is not only highly improper,
under the Act, illegal. Repeated attempts to obtain meaningful information
from USDA regarding the USFRA/Checkoff issue have so far been unsuccessful.

So, more than two years after the initiation of an unprecedented joint effort by USDOJ and USDA, and after the five workshops, nothing meaningful has happened. They raised our hopes and expectations and then let us down. Corporate influence and politics seem to have prevailed.

Independent family farmers and ranchers remain alone and unprotected.
FS


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