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Today a handful of global corporations dominate
each sector of our food supply. The market control of the top U.S.
food retailing and processing firms is at an all time high. The
concentration power of these firms increases their ability to manipulate
markets—eliminating free market competition to the detriment
of family farmers and consumers.
Congress should pass a farm bill that addresses
its legislative responsibilities for the Packers and Stockyards
Act and Agricultural Fair Practices Act to support competitive agriculture
markets.
More than 200 organizations have endorsed a simple,
yet comprehensive solution. The Competition Title is a proposed
section of the 2007 Farm Bill that would return free market competition
and fairness to markets and improve economic opportunity for farmers,
ranchers and rural communities. Read
the sign on letter to Congress.
These provisions would address a significant problem of Captive
Supply—which packers use to manipulate markets.
1. Captive Supply Reform Act
Currently, formula contracts and marketing agreements are
negotiated in secret. These formula contracts and agreements depress
prices and shut small and independent producers out of markets when
packers base the price they pay for contracted cattle on a cash
market they can manipulate. The
Captive Supply Reform Act (S 1017) would require packers offer
contracts with a firm base price and offer them in an open public
manner. More
on Captive Supplies.
2. Prohibition on Packer-Owned Livestock
Meat packers use packer-owned livestock as a tool for exerting unfair
market power over farmers and ranchers. This practice fosters industrial
livestock production and freezes independent farmers out of the
market, lowering farm gate prices to farmers and rancher while consumer
food prices continue to rise. S.
305 would amend the Packers and Stockyards Act of 1921
to make it unlawful for packers to own, feed, or control livestock
intended for slaughter. More
on Packer Ban.
Current abuses contained in processor-drafted agricultural contracts
allow for manipulation of the producer. These provisions are found
in S.
622, the Competitive and Fair Agricultural Markets Act
of 2007. Read
a summary of S. 622.
3. Fairness Standards for Agricultural
Contracts
Minimum standards must be set for contract fairness in agriculture
including clear disclosure of risks, prohibition of all confidentiality
clauses, prohibition of binding arbitration in contracts of adhesion,
recapture of capital investment and a ban on unfair trade practices.
Sen. Grassley R-IA) has sponsored additional legislation on this
issue as S.
221.
Read
more.
4. Clarification of “Undue Preferences”
in the Packers and Stockyards (P&SA) Act
Additional legislative language is needed in the P&SA to strengthen
the law and clarify that preferential pricing structures are justified
only for real differences in product value, acquisition and transaction
costs should be clarified and strengthened. Read
more.
5. Closing Poultry Loopholes in P&SA
Poultry loopholes in the P&SA should be closed to provide the
packers and Stockyards Administration with the necessary enforcement
authority over all poultry cases. This is necessary to bring poultry
in line with other livestock within the P&SA. Despite evidence
of the contract being used as a tool to intimidate, retaliate, and
reduce growers profits to poverty levels, the Grain Inspection Packers
and Stockyards Administration does not currently have the authority
to take administrative action and protect growers by halting unfair
practices or penalizing poultry companies that violate the law.
Read
more.
6. Bargaining Rights for Contract Farmers
Amend the Agricultural Fair Practices Act of 1967 to require companies
to bargain in good faith with bargaining associations, and allow
farmers to join associations without fear of retaliation by producers.
Read
more.
7. Livestock Mandatory Price Reporting
The Livestock Mandatory Price Reporting Act of 1999 requires packers,
processors, and importers to provide price, contracting, supply
and demand information to USDA. Bureaucratic inertia has blocked
effective enforcement and prevented the Act from benefiting independent
livestock producers. Congress should amend the Livestock Mandatory
Price Reporting Act in 2007 by incorporating legislative directives
to USDA from the 2005 Government Accountability Office Report.
8. Mandatory Country-of-Origin labeling
(COOL)
The 2002 Farm Bill provided for Country-of-Origin labeling for beef,
lamb, fresh fruits, fish and shellfish. Mandatory COOL for fish
was implemented in April 2005, but implementation for all other
commodities has been stymied by meatpackers and retailers. Congress
should reauthorize COOL to reaffirm its benefits and fully fund
the program.
More on COOL.
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