Antitrust advocates grade USDA efforts as passing, but just barely
by Claire Carlson
Nearly one year has passed since President Biden issued an executive order to promote competition in different sectors of the economy, and according to a new report from a nonprofit advocacy group, the Biden-Harris administration has not done enough to limit the power of big corporations over the agriculture sector.
The report, produced by Farm Action and Open Markets Institute, gave letter grades to three federal departments and agencies with roles enforcing antitrust laws and promoting competition: the Department of Justice, the Federal Trade Commission, and the Department of Agriculture. The DOJ and FTC both received B- scores; the USDA received a dismal D+.
These scores reflect how each group has followed the directives given to them through President Biden’s executive order, according to the report. For the USDA, directives to strengthen the Packers & Stockyards Act and clarify “Product of the USA” labels were issued in the executive order. For the DOJ and FTC, a directive was issued to them to challenge the mergers of agricultural corporations by implementing more extensive merger guidelines.
In their report, Farm Action and Open Markets Institute commended the FTC for their work beginning a new merger guidelines process, passing “Made in the USA” rules that more accurately label where food is produced, and committing to enforcement of farmers’ right to repair – the ability for a farmer to fix their own equipment without running afoul of manufacturer licensing and warranties. The DOJ was commended for beginning investigation of mergers like Cargill and Continental Grain Company’s acquisition of Sanderson Farms, a move that has competition advocates and legislators worried about poultry price-fixing.
The report did note areas for improvement in the anti-consolidation work of these two agencies. It said the DOJ still needs to investigate beef-cattle market manipulation, the sharp spike in fertilizer prices, and inaction using its legal authority to break up agriculture monopolies. The report said the FTC has been slow to ban exclusive dealings and non-compete agreements, business tactics that make it harder for new businesses to enter the market. But, with more than two years left in the Biden-Harris administration, a B- for both agencies leaves a feasible amount of work left to do, the report said.
The USDA, on the other hand, has more work cut out for it, the report said. The review, which gives the USDA a grade of D+, cites failure to implement new rules for the Packers & Stockyards Act, which has been an ongoing struggle for the department. In 2010, the USDA failed to pass Packers & Stockyards rules and little progress has been made in the 12 years since.
“Secretary Vilsack, under the Obama administration, has already written these rules twice,” said Joe Maxwell, president of Farm Action, in an interview with the Daily Yonder. “We feel very strongly that after a year [since the executive order] they should be further along.”
The only Packers & Stockyards rule being reviewed for comment deals with transparency in poultry contracts and tournaments, and according to Maxwell, it falls short of what’s needed to actually deal with unbalanced power structures in the market.
“This rule does nothing to balance the power between the contract poultry grower, the farmer and the vertical integrator – the chicken company,” Maxwell said. “It just requires more information to be provided to the farmer.
“These meat packers, in this case, chicken processors, have all the power. They have all the control. They can give the farmer all the information they want, but it won’t balance that power structure. The farmer is still going to be abused in that system,” Maxwell said.
Maxwell noted that the USDA’s lackluster efforts are likely symptomatic of lack of funding and the structural changes made to the USDA under the Trump-Pence administration. Former President Trump and former Secretary of Agriculture Sonny Perdue merged the Grain Inspection, Packers and Stockyards Administration (once its own agency) with the Agricultural Marketing Service, another agency in the USDA.
“[The Grain Inspection, Packers and Stockyards Administration] is now simply a program, and you can’t get much smaller than a program,” Maxwell said. “One of the lowest levels of government is taking on some of the world’s largest corporations.”
According to Maxwell, Farm Action and Open Markets Institute focused a large part of their midterm review on the USDA because they believe there is an urgent need to strengthen the department and build back the agencies that were lost in the restructuring that happened under the Trump-Pence administration.
USDA Deputy Press Secretary Allan Rodriguez told the Daily Yonder that the grade does not accurately reflect the impact of the actions the department has taken to promote competition in the meat and poultry processing sector.
“USDA’s recent announcement of a proposed rule to protect poultry growers from abuse and its upcoming rollout of two additional rulemakings under the Packers & Stockyards Act make clear the department’s commitment to stopping unfair, deceptive, discriminatory, and anticompetitive practices in the meat and poultry industry through vigorous and fair enforcement of the existing competition laws,” Rodriguez said.
Rodriguez also referenced the $1 billion in funding from the American Rescue Plan that the USDA has partially dedicated to expanding the capacity of independent meat processors, with the goal to combat consolidation in the meat processing sector and support job creation and economic opportunities in rural communities.
“USDA will continue to explore every option at its disposal to create a fairer, more competitive and more resilient meat and poultry processing sector and deliver on President Biden’s executive order to promote competition in the American economy,” Rodriguez said.
The report says the grades given to the FTC, DOJ, and USDA aren’t final, but serve as a check-in on the progress being made to promote competition in agriculture.
The Daily Yonder provides news, commentary, and analysis about and for rural America. You can see daily coverage at dailyyonder.com. This article is republished from Mongabay, is a nonprofit environmental science and conservation news platform that produces original reporting in English, Indonesian, Spanish, French, Hindi, and Brazilian Portuguese. The organization has more than 800 correspondents in some 70 countries and is dedicated to evidence-driven journalism.