USDA’s Agricultural Marketing Service (AMS) has released a proposed rule for the Packers and Stockyards Act.
The proposal suggests four specific criteria for the secretary of agriculture to consider when determining if an unfair preference or advantage occurred in violation of the Act.
The suggested criteria the secretary could consider are:
• Whether the preference or advantage under consideration could not be justified on the basis of a cost savings related to dealing with different producers, sellers or growers;
• If the advantage could not be justified on the basis of meeting a competitor’s prices;
• Whether the preference or advantage could not be justified on the basis of meeting other terms offered by a competitor; and
• If the advantage could not be justified as a reasonable business decision that would be customary in the industry.
AMS is proposing this list of criteria, but also proposes the secretary have the flexibility to consider other criteria that may be relevant on a case-by-case basis in order to “strike a balance between the interests of all segments of the industry.
“AMS recognizes that among the numerous complaints examined in the past, many preferences and advantages made or given to individuals or groups in the industry have been determined to be lawful, and relatively few have been determined to be undue or unreasonable,” according to the posted rule.
Industry reactions
North American Meat Institute President and CEO Julia Anna Potts said the organization will review the proposed rule and “work to ensure livestock producers have a variety of tools available to market their animals and to ensure meat and poultry markets remain competitive.”
Potts continued, “Eight federal appellate courts have concluded that the Packers and Stockyards Act requires a plaintiff to show actual or likely harm to competition. Without such a requirement, frivolous lawsuits could flood the courts and hurt the producer-processor relationship, ultimately harming those the law is intended to protect.”
The Organization for Competitive Markets was less than thrilled with the proposed ruling.
“Unlike the previous iteration of this rule, it fails to set out which actions are unfair, unjustly discriminatory, or deceptive by meat packers and processors,” an official statement read. “USDA leaves farmers, ranchers, and poultry contract growers under the threat of retaliation for speaking out against any wrongdoing of the packer or processor.”
National Farmers Union President Roger Johnson also expressed his apprehension about the rule.
“After so many years of inaction, it is encouraging to see this administration take some small steps to level the playing field,” Johnson said. “However, this rule does not go far enough to safeguard farmers from unfair treatment, nor does it address many of the other difficulties farmers have been suffering at the hands of powerful corporations.” — Anna Miller, WLJ editor
