Don’t Throw the Baby out with the Bathwater: Not All Regulations Are Bad


Organization for Competitive Markets (OCM) is celebrating its 20th birthday this year. Since its inception, OCM’s mission statement has included the following statement, “True competition reduces the need for economic regulation. Our mission, and our duty, is to define and advocate the proper role of government in the agricultural economy as a regulator and enforcer of rules necessary for markets that are fair, honest, accessible and competitive for all citizens.”

OCM has always understood that to secure our country’s economic future our government must be the referee of the marketplace. And if there is a referee, then by definition there are rules.

Our government should neither directly support policies that create and allow for monopolies nor should its lack of action allow for the creation of monopolies and the concentration of market power that squelches economic opportunity for all.

Unfortunately, it has become very popular for our elected officials to make bold statements about government regulations being the ruination of this country and the killer of the economic opportunities of its citizens. They stand in front of groups of farm community citizens and often times get standing ovations for such broad, tough, anti-government, anti-regulation speech.

The truth is, not all regulations are bad, and we need to start voicing support for marketplace safeguards contained in antitrust regulations. We need to do so proudly as true patriots fighting to ensure the American Dream – earning your piece of America’s prosperity – lives on for the next generation.

This is the foundation of our country. If we look back on our history, we will be reminded that the very revolution that delivered our independence was sparked when our then government, England, sanctioned the East India Company as the sole company authorized to sell tea in the Americas, granting them a monopoly over the tea trade. This grant of a monopoly, by our then government, stole from America’s small businesses the very economic opportunity that they had come to America to secure and possess. The very concept of fair, honest, accessible and competitive markets was the basis for the American Revolution and is a founding principle and economic policy that built America. Everyone should have a right to their piece of the American Dream – economic justice for all. This principle has led the world to look at us as the land of opportunity, a shining light of democracy for the world.

In the late 19th century, our country came to understand it is not just by government affirming and sanctioning a monopoly that a monopolistic market can be created; we learned that an unchecked market will ultimately become out of balance and monopolies and their abusive practices will develop over time. During this period a handful of business elites, known as Robber Barons, used unethical tactics to crush farmers and workers and amass excessive market and economic power creating a stranglehold on America’s economy and denying opportunity and ingenuity in the market. This stranglehold stifled Americans’ opportunity for their piece of America’s prosperity, a time of haves and have nots; but having “not” out of no fault of their own.

It was Teddy Roosevelt, whose image graces our masthead, that began a decades-long battle to restore economic justice for the American farmer, ranchers and the people. He is known as America’s first “Trust Buster.” During those times, the Robber Barons used trusts rather than corporations to consolidate their wealth and power, thus Roosevelt was a “Trust Buster.”

Following Roosevelt’s charge against the Robber Barons, the presidents and their administrations that followed strengthened the antitrust laws with the passage of two pieces of legislation, the Clayton Act (1914), which strengthened the previously passed Sherman Act (1890), and the Packers and Stockyards Act (1921). These bills were landmark regulatory legislation that instituted market safeguards for farmers, businesses and citizens. The effect of these government regulations and their enforcement was to break up the stranglehold the Robber Barons had on the market, restoring economic opportunity and justice to American citizens. The presidents who helped usher in these policies and regulations understood that America’s future was dependent on stopping the stranglehold that monopolies have on the economy and ensuring that all Americans are given their shot at the American dream, their opportunity to have a piece of the prosperity they were building through their farms and labor. They understood that America is great for all when markets “are fair, honest, accessible and competitive.”

From Teddy Roosevelt to Franklin Delano Roosevelt, these presidents understood that the citizens of the United States could have democracy or a country with concentration of the market and wealth, but not both. OCM stands firmly on this principle; unless there is economic justice for all there is no freedom that democracy ensures.

Unfortunately, over the last two decades, the courts have weakened the farmers’ market safeguards contained in the Packers and Stockyards Act of 1921, and government administrations have nearly refused to enforce those provisions that remain. Our government’s inaction and lack of enforcement has allowed as much as 80% of the agriculture market to be controlled by four large multinational corporations. The results have been devastating for America’s farm families and the rural communities in which they live. Today, 71% of America’s poultry growers live below the federal poverty level; 90% of U.S. hog farmers and 41% of U.S. cattle producers have gone out of business and over 1,000,000 of U.S. family farmers have been driven off the land since 1980. Farmers and ranchers have seen farm income decline along with the rise of corporate consolidation. Since 2013, U.S. farm income has dropped by $43.6 billion.

Corporate consolidation has had a devastating impact on small businesses, too. Between 1990 and 2016, federally inspected slaughterhouses decreased by 36 percent. In 1990, there were 1,268 federally inspected establishments, compared to 808 in 2016. Non-federally inspected establishments fared even worse, declining 42 percent since 1990, when there were 3,281 establishments compared to 1,910 in 2016. Jobs and wages have disappeared along with the slaughterhouses. According to the Bureau of Labor Statistics, the animal slaughtering and processing industry employed a total of 506,000 people in 2005. By May 2016, the industry employed only 80,780 people and their average wage was down to half of that of all manufacturing jobs in the U.S.

For years, family farmers fought to have justice restored in the market by reinstating the market safeguards contained in the Packers and Stockyards Act. In late 2016, the USDA finally issued the Farmer Fair Practices (GIPSA) Rules. These rules would have restored farmers’ access to justice. Unfortunately, USDA Secretary Perdue withdrew two of the rules and postponed his decision on the third rule. Secretary Perdue has also dismantled the very agency responsible for enforcing the Packers and Stockyards Act. All these actions are done in the name of smaller government and fewer regulations. But who is helped by these actions? Clearly not America’s family farmers and their rural communities. These actions clearly demonstrate Perdue is in bed with the modern day Robber Barons: Smithfield, JBS, Swift and the other multi-national agribusiness giants. 

In response, OCM and 85 other farm organizations quickly called on President Trump to veto Secretary Perdue’s abandonment of the market safeguards contained in the Farmer Fair Practices Rules. These farm groups are still waiting for a response from the President. However, during the president’s recent speech at the American Farm Bureau Federation convention, the president nearly demanded a standing ovation when he announced how his administration had aggressively ended many of the previous administration’s regulations.

So the next time you are at an event and one of your elected officials is touting how great they are for downsizing government and eliminating government regulations, stand up and instead of giving them a standing ovation, ask them to follow in the footsteps of Teddy Roosevelt and become a modern day “Trust Buster.” Doing otherwise is simply throwing the baby out with the bath water, and it is your baby – your piece of the American Dream.

This article appeared in OCM’s January-February 2018 membership newsletter. Click here to become an OCM member.

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