By David Dayen | October 18, 2019
Even some Republicans are upset over this corporate handout.
Back in August I profiled Family Farm Action, a new economic-justice organization formed to take on Big Ag monopolies and fight for independent farmers. One of its biggest priorities was to pressure the Trump administration to complete rules proposed by Obama’s Department of Agriculture a month before Inauguration Day, under the Grain Inspection, Packards, and Stockyards Act (GIPSA). One of the regulations would have clearly defined the scope of certain predatory and retaliatory practices, and allowed farmers to charge producers with violations of the rules without a specific finding of harm to the entire market for their produce or livestock.
On Tuesday, the USDA withdrew the rule, a betrayal of exactly the kind of voters who turned out for Trump in large numbers in last year’s election. The decision further immiserates family farmers who have no choice but to submit to the machinations of Big Ag processors. And even some Republicans in Congress are irate.
Under GIPSA, it’s already illegal for companies that contract with farmers for their produce or livestock to engage in unfair or deceptive practices. But farmers needed to establish definitive proof of competitive injury across the entire market before USDA would step in. This created an uneven playing field; farmers would be burdened with suffering for perhaps years before any action would be taken. They might not be in business by the time USDA got around to helping. Also, it created a loophole where producers could single out individual farmers for harm, leaving them with no recourse as long as they didn’t treat the entire market the same way.
That restriction locked in a perilous reality, particularly for livestock operations in America. Most hogs and chickens are raised by farmers but owned by big corporations like Tyson or Smithfield. The farmers’ contracts force them deeply into debt to keep up with dictated standards from the companies, and pit them against other farmers in the community vying to generate the fattest animals. This “tournament system,” a Darwin-style survival of the fittest, has devastated farm communities with cutthroat practices that squeeze earnings for their labor. Shocking numbers of poultry farmers live in poverty, while corporations prosper from their efforts. And if farmers speak up about this injustice, they get less pay or lower-quality chickens, a direct form of retaliation to shut them up. In other words, corporations have all the control, and the rules would at least give farmers a chance to battle back.
The rules themselves, originally called for in the 2008 Farm Bill, took way too long to get finalized. President Obama dragged his feet for a couple years, after promising farm communities he would protect them. After Republicans won Congress in 2011, they instituted a block on the rules in successive appropriations bills. A public shaming from John Oliver led the GOP to finally lift the restriction, but this virtually ran out the string on Obama’s tenure, giving Trump’s USDA the chance to roll them back quickly. Because the rules were never implemented, the new regime could delay the effective date from February to October, and then withdraw the rule entirely.
In public comments, industry groups largely whined about increased litigation as a result of the rule. They warned of billions of dollars in unanticipated costs that they would have to pass on to consumers. Hilariously, the industry added that it would just have to consolidate even more by buying out suppliers, threatening to solve a problem of concentration with more concentration. Of course, we have actual antitrust laws designed to prevent such dominance, but at this point they’re more of a theory than reality. Finally, they said that the rules would stifle “innovation,” and by innovation they mean the desperation that comes from having to raise bigger chickens on less feed than your neighbor in a war for the tiny pile of money Big Ag doesn’t keep for themselves.
Randall Jones, the acting administrator of GIPSA, bought the industry arguments. The public justification for withdrawal talked mainly of problems with legal analysis and administrative procedure. But, amazingly, GIPSA recognized that the rule would provide “broader protection and fair treatment” for meat and poultry farmers, “which may lead to more equitable contracts.” Still, after a cost-benefit analysis, Jones wrote that the savings to the agency from not having to enforce the rule outweighed any benefit for farmers.
Supporters of the rule immediately pounced. Public Citizen described the action as “fully centered on handouts to big business” and the result of lobbying muscle in Washington. Mike Weaver, a chicken farmer and leader of the Organization for Competitive Markets, a group affiliated with Family Farm Action, called it “a slap in the face to rural America and America’s farmers and ranchers.”
Weaver demanded that Trump pass an executive order to reinstate the rule, which is unlikely, since he hired the people who withdrew it. Indeed, Trump’s agriculture secretary, Sonny Perdue, was governor of Georgia, one of the biggest poultry-producing states, and is tied deeply to Big Ag interests.
Interestingly, Weaver is actually a Trump-supporting Republican. The degree to which conservative rural interests have been stung by this is striking. Senator Chuck Grassley (R-IA), upon learning of the withdrawal, expressed “violent opposition” to GIPSA on the issue. “They’re just pandering to big corporations,” Grassley said. “They aren’t interested in the family farmer…. Everybody thinks draining the swamp is firing a whole bunch of congressmen and a whole bunch of bureaucrats; this is a perfect example of a swamp that’s being refilled by withdrawing these rules.”
Will this backlash result in a rural-state turn away from Trump? Only if there’s an actual alternative in these regions. Farm-state residents over the past decade have seen the Democratic Party ignore their calls for help and the Republican Party side with their tormentors. No wonder they feel so powerless, and angry.