A Midwestern farmer explains the need for change in a sector with a big footprint in North Carolina
President Joe Biden recently signed an executive order aimed at increasing competition across all sectors of the economy. This is a long time coming and a good first step in addressing a number of long term problems.
One important point of interest for agriculture is the change to the Grain Inspection Packers and Stockyards Act (GIPSA). The executive order addresses the current rule that a farmer who has been wronged had to show harm to competition in an entire sector or the entire industry to bring a claim under GIPSA. This is a virtual impossibility. The revised rule would protect individual farmers from corporate abuses that they have had to deal with for far too long.
This is especially important for poultry producers who are forced into a tournament system by the integrators, which determine contract grower payments. The growers are supplied birds by the corporation, who can predetermine the outcome by supplying certain growers with inferior animals. This practice is fundamentally unfair and needs to be changed.
Another very important issue addressed in the executive order is “Product of the USA” labeling. As it currently stands, anything can be labeled as a “Product of the USA” if it is processed or packaged in the USA despite the fact that it was bred, raised and/or slaughtered in a foreign country.
The new label requirement would only allow animals born, raised and harvested in the U.S. to bear the label “Product of the USA.” A good first step, but restoring mandatory country of origin labeling would better educate consumers about where their beef originates and allow U.S. farmers to better promote U.S. beef products.
The executive order also aims to strengthen antitrust enforcement. Agriculture is one of the most concentrated industries in the U.S. The trend towards greater consolidation of our farm and food system is alarming and has resulted in a fragile food system that has repeatedly demonstrated that it is ill-equipped to adequately respond to a real crisis. The COVID pandemic clearly showed these weaknesses.
Another side of this problem is that all of the major agriculture/food sectors have an alarming amount of foreign corporate ownership. For example, control of corn seed by the top four companies is around 85%; soybean seed is 70%, with two foreign companies, Germany’s Bayer/Monsanto and China owned Syngenta, now are making up most of the control over the soybean seed market.
In the poultry industry, the top four companies controlled 54% with Brazil’s JBS being a major player. Four corporations control over 70% of the pork industry, with China’s Smithfield and Brazil’s JBS controlling 50% of the pork produced in the United States. The top four beef suppliers’ control 85% of the market, and two of these corporations are foreign owned, Brazil’s JBS and Marfrig.
When questioned before Congress about anti-competitive control, the corporate mouthpieces like the North America Meat Institute stated that “market fundamentals” drive the market. The problem is that multi-national meatpackers control the “fundamentals” and name the price paid to cattlemen, while they overcharge consumer’s big time. These are issues farmers have had for some time.
Corporate consolidation has removed any semblance of competition and producers are left with a “take it or leave it” scenario on both ends of the buying and selling process.
Looking forward, this executive order should lay a foundation for the 2022-2023 Farm Bill, but it will be up to all of us to engage our elected representatives to ensure that these priorities become policy.
Missouri Independent is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Missouri Independent maintains editorial independence. Contact Editor Jason Hancock for questions: [email protected] Follow Missouri Independent on Facebook and Twitter.
Darvin Bentlage is a fourth-generation cattle and grain farmer and a member of Missouri Rural Crisis Center. This essay was first published in the Missouri Independent.