Reforming the Marketplace; What’s Next?

Written on:March 1, 2011
 
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Thomas F. “Fred” Stokes
Executive Director

In a February 9th letter to Agriculture Secretary Vilsack and Attorney General Holder, Senators Patrick Leahy and Charles Grassley state; “we would appreciate an update as to what the DOJ and USDA plans for its next steps.” The two senators, Chairman and Ranking Member of the Senate Judiciary Committee, were referring to following-on actions after the conclusion of last year’s joint DOJ/USDA workshops. “What’s next” seems to be the question on the minds of lots of folks these days. I frequently hear; “They’ve given us hope and the expectation of better days for farmers and ranchers, but when will we see some action?”

In 2009, plans were announced for a historic series of workshops to examine the competitiveness and fairness of markets that affect the livelihood of farmers and ranchers. Also at that time, DOJ began an investigation of anticompetitive practices in the transgenic seed industry.

Between March and December of 2010, a series of five workshops were conducted, dealing with row crops, dairy, poultry, livestock and retail margins.

On June 22, 2010, the proposed GIPSA Rule was posted on the federal register.

During July of 2010, the results of a performance review of the NCBA handling of the Beef Checkoff Program revealed serious irregularities, which precipitated an audit by the USDA Inspector General.

The above events generally worked to the chagrin of big agribusiness, meat packers, poultry and pork integrators and their associated organizations, politicians and various other colluders. But, these happenings help break the cynicism of independent farmers and ranchers and gave them hope that our government was going to finally address the marketplace ills that had systematically shortchanged them and unjustly rewarded processors and retailers. Just maybe the prices they received
for their crops and livestock in the future would be the product of a dynamic and competitive market rather than the reflection of the market power of buyers.

The workshops clearly showed that the markets were broken. Perhaps the best evidence was revealed at the December event in DC on retail margins. Irrespective of their rapidly increasing production input costs, the farmer’s share of the food dollar consistently gave way to increases in the share of food retailers. Claims that this was due to inflation and advances in convenience ring hollow.

The posting of the GIPSA Rule on the Federal Register was greeted with a firestorm of opposition from meatpackers and their cabal. Their efforts to intimidate, stall and confuse the issue were at least moderately successful. The comment period was
extended and their demand for an economic impact study was granted.

The 60,000 comments are now being evaluated and the final decision on the GIPSA Rule becoming final will be well into the future. If it is ultimately finalized in anything close to its current form, it will almost certainly be challenged in court with an uncertain outcome.

The poultry workshop graphically showed the gross abuses of contract growers by integrators. DOJ officials seemingly were incensed at the poignant stories told by some 50 growers. Yet, some of these same growers who testified at the workshops have since had their contracts terminated without prompting an investigation to determine whether or not this was a reprisal
action.

Some eighteen months after DOJ initiated an investigation, no court action regarding the outright monopoly in the GMO seed market is in evidence.

Farmers and Ranchers are still being put out of business by market concentration and anticompetitive practices.

An audit of the Beef Checkoff is now underway but will likely not be completed until this fall. In the meantime, NCBA continues as the prime contractor (handling some $30 million per year) after being exposedas having failed in its fiduciary responsibility and as betraying the trust of producers who are required to pay the checkoff.

The flawed Appellate Court rulings which require a showing of harm to competition before consideration of individual harm continue to shield packers and integrators from the consequences of their violations of the Packers and Stockyards Act.

Mr. Secretary and Mr. Attorney General, your unprecedented initiative renewed our hope; but when can we expect relief from the dire situation you so eloquently portrayed at the joint workshops? FS


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