President Joe Biden signed an all-encompassing executive order (EO) Friday, July 9, which addressed how to increase competition in all aspects of the economy. Agriculture was included in the order, which industry groups applauded. Of most significance was Biden’s promise to address antitrust concerns in the entire economy.
“What we’ve seen over the past few decades is less competition and more concentration that holds our economy back,” Biden said in a speech shortly before signing the order. “We see it in big agriculture, in big tech, in big pharma. The list goes on.”
For agriculture, the following actions are to be taken under the EO:
• Issue new rules under the Packers and Stockyards Act;
• Reevaluate the “Product of USA” label;
• Increase opportunities for farmers to access markets; and
• Limit equipment manufacturers from restricting the use of independent shops or self-repair.
“Consolidation in the agricultural industry is making it too hard for small family farms to survive,” the EO read. “Farmers’ share of the value of their agricultural products has decreased, and poultry farmers, hog farmers, cattle ranchers, and other agricultural workers struggle to retain autonomy and to make sustainable returns.”
The EO noted that consolidation limits producers’ options for selling their products and called attention to the fact that four meatpackers dominate over 80 percent of the beef market. Over the last five years, the order explained, farmers’ share of the price of beef has dropped by more than a quarter—from 51.5 percent to 37.3 percent—while the price of beef has risen.
“In short, family farmers and ranchers are getting less, consumers are paying more, and the big conglomerates in the middle are taking the difference.”
The order also stressed how the current “Product of the USA” label can be misleading to consumers.
Ag details
The USDA secretary is directed to consider rulemakings under the Packers and Stockyards Act, which should make it easier for farmers to bring claims, and win, against packers. The secretary will provide clear rules that identify unfair, discriminatory, or deceptive practices. The definition and criteria for undue or unreasonable preferences, advantages, prejudices, or disadvantages will be updated.
In addition, industry-wide harm will not need to be shown in order for there to be a violation of the act. Anti-retaliation protections will be put into place for producers to speak out about bad practices.
The order also directs the secretary to initiate a rulemaking regarding the use of voluntary labels claiming U.S. origin, such as the “Product of USA” label.
No more than 180 days after the order was signed, the secretary must prepare a report with a plan to promote competition in the agricultural industries and to support value-added agriculture and alternative food distribution systems.
This could include creating or expanding model contracts; improving transparency and standards so consumers can choose products that support fair treatment of workers and sustainable practices; enhancing price discovery and transparency in cattle and other livestock markets; protections for whistleblowers; and other investments to bolster competition in concentrated markets.
The secretary will also be required to submit a report no more than 300 days after the order was signed on the effect of retail concentration and retailers’ practices on competition in the food industries. In addition, the secretary will create a report about any concerns across intellectual property, antitrust or other laws.
The EO also calls on the Department of Justice and the Federal Trade Commission to enforce the antitrust laws “vigorously” and challenge “prior bad mergers.” The order emphasizes that enforcement should focus in particular on labor markets, agricultural markets, healthcare markets and the technology sector.
Finally, the EO creates a White House Competition Council, which will tackle overconcentration, monopolization and unfair competition. The council will be led by the assistant to the president for economic policy and the director of the National Economic Council. The council will consist of notable department secretaries, including the secretary of Agriculture, as well as heads of other agencies and offices.
The same day the EO was signed, Agriculture Secretary Tom Vilsack announced $500 million in American Rescue Plan funds would be directed to expand meat and poultry processing capacity. Grants, loans and technical assistance will be provided through USDA. USDA will be soliciting public input for how funds should be invested.
In addition, more than $150 million will be given to small and very small facilities to help with COVID-19 impacts and make plants more competitive in the marketplace.
To submit comments, visit regulations.gov and search for Docket ID AMS-TM-21-0058. Or, mail comments to: Sarah J. Helming, Whitten Building–Suite 312-E, 1400 Independence Avenue, SW, Washington, DC 20250. In your comments, specify Docket ID AMS-TM-21-0058.
Industry reactions
Most industry groups applauded the measures included in the EO.
“We thank President Biden and Secretary Vilsack for the leadership and swift action they’ve shown on some of the top issues impacting our producers, including ‘Product of the USA’ labeling and grants to expand regional, independent processing capacity,” said National Cattlemen’s Beef Association (NCBA) Vice President of Government Affairs Ethan Lane.
Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA) echoed NCBA’s sentiments. “If these rules are brought to fruition, they will go a long way toward rebalancing the disparate market power between the highly concentrated beef packers and the widely disaggregated independent cattle feeders, backgrounders, stockers and cow/calf producers,” Bill Bullard, R-CALF USA CEO, said.
However, North American Meat Institute (NAMI) released a statement opposing the EO, saying it will have “unintended consequences for consumers and producers.”
“These proposed changes will open the floodgates for litigation that will ultimately limit livestock producers’ ability to market their livestock as they choose,” said NAMI President and CEO Julie Anna Potts. “These proposals have been considered and rejected before and they are counter to the precedent set in eight federal appellate circuits.” — Anna Miller, WLJ managing editor
