USDA proposes new criteria for fair play in livestock marketing
More than two years after killing an Obama-era proposal to make it easier for livestock producers to prove unfair treatment at the hands of meat processors, the Trump administration said it wants to use four criteria to determine whether packers give undue or unreasonable preference to one producer over another. The proposal was greeted by small-farm advocates as a small step forward while insisting that broader reform was needed.
The North American Meat Institute, an industry group, said court decisions require a strong level of proof — evidence of actual or likely harm to competition because of a processor’s actions — to prevent frivolous lawsuits. At present, producers must show proof of harm to the entire market in order to win a complaint of anticompetitive practices.
In its proposed rule, the USDA listed four criteria that it would use to determine whether a packer, swine contractor, or live poultry dealer was giving unreasonable preference to a producer (which means providing excessively favorable conditions for a producer or group of producers while reducing opportunities for others to secure optimal pricing and business success). The criteria include whether it’s possible to justify a preference on the basis of cash savings, meeting a competitor’s prices, meeting the terms offered to a competitor, or a reasonable business decision for the industry.
The National Sustainable Agriculture Coalition said the proposal was flawed because unfair competition “has unfortunately become customary for the industry,” so the success of the USDA proposal could hinge on how it is “interpreted and enforced.” The NSAC and the National Farmers Union each said the proposal was a small step forward.
“While Congress and the USDA have spun their wheels for more than a decade, farmers have continued to endure anticompetitive practices with few defense,” said NFU president Roger Johnson. “In order to provide farmers with the protections they need and deserve, we strongly urge USDA to strengthen its definition of “undue or unreasonable preference” as well as introduce additional rules to ensure fair treatment and competition in the livestock sector.”
The USDA set a 60-day comment period, through March 13, on the proposal.