Open Markets: Agriculture Department Should Use Packers and Stockyards Act to Protect Farmers From Meatpacker Abuse
March 13, 2020
Washington, DC — The Open Markets Institute urges the U.S. Department of Agriculture (USDA) to curtail meatpackers’ abusive tactics and to stand up to judicial overreach by reviving the Packers and Stockyards Act (PSA), in a comment filed with the USDA today.
Last month, the USDA proposed a new rule regarding undue and unreasonable preferences and advantages under the Packers and Stockyards Act. In its comment, Open Markets argues that the PSA is an essential statute that protects farmers and ranchers from abuse by monopolistic processors, while establishing fair terms of trade in livestock and poultry markets. Unfortunately, federal courts have corrupted the text of the statute and undermined farmers’ ability to challenge mistreatment by meatpackers. Open Markets argues that the USDA’s proposed rule “threatens to weaken the PSA even further by accepting poor legal precedent, particularly the need to prove a harm to industry-wide competition to pursue a violation under the PSA.”
The USDA has clear authority to issue rules reaffirming Congress’ intent in creating the PSA. To not wield this power would make it difficult to undo the court precedents that have gutted farmers’ protections and allowed for meatpackers to intimidate and abuse farmers with impunity. Open Markets urges the USDA to uphold its long-standing position that harm to industry-wide competition is not necessary to violate the PSA, and Open Markets asks the USDA to issue new rules that clearly lay out examples of unfair, abusive, and discriminatory conduct, as well as examples of unfair and undue preferences.
“Decades of pro-corporate court decisions have gutted farmers’ ability to seek justice under the PSA, which is farmers’ main line of defense against unfair treatment by meatpackers,” said Claire Kelloway, Reporter & Researcher at Open Markets. “These decisions were based on gross misinterpretations and run contrary to the plain text and congressional intent of the statute. However, the USDA has broad authority to rectify decades of poor precedent, and the courts must give it deference to do so. To do anything less would be to roll over to judicial rewriting and to abdicate the agency’s authority, setting a dangerous precedent for future rule-making. The USDA has a moral obligation to protect farmers and ranchers who suffer intimidation, mistreatment, discrimination, and retaliation by dominant corporate meatpackers.”
Read related work by Open Markets here:
Food & Power: Trump’s USDA Sides With Corporate Meatpackers Over Farmers, in Latest GIPSA Proposal
Food & Power: Farmers Speak Out About Meatpacker Mistreatment, Call on USDA for Stronger Protections
Food & Power: Trump Administration Guts Office Designed to Protect Farmers from Ag Monopolies
Policy Report: Addressing Monopolization in America’s Food System
Washington Monthly: Obama’s Game of Chicken
Most of the judicial decisions claimed there had to be “harm to competition”. They were ignoring the fact that there is competition to sell to the meat packers by producers and on the other side of the transaction there is possible collusive activity by meat packers to that harms consumers. Almost all of the court cases by producers totally ignores the fact that the PSA was written primarily to limit abuses of market power on the producer side and also collusive market behavior on the consumer side. Our courts are totally ignoring the first part of the law by claiming that the second part of the law allows meat packers to break the first part. Our judges need remedial courses on little words like “or” and “and”. If that is the case, how can they be qualified to be judges at all?