Columns
Thursday, March 8, 2007
livestock producers deserve fair markets
Independent agricultural producers are finding it harder than ever to survive in a market system that too often seems stacked against them. The agribusiness sector has consolidated dramatically, to the point where there are too few buyers for farmers to market their livestock in many parts of the country. These structural changes limit producer options and increase the potential for unfair practices to occur in the marketplace.
These changes concern me greatly. That is why I have recently introduced the Competitive and Fair Agricultural Markets Act of 2007. This bill would improve enforcement of the Packers and Stockyards Act, and it would strengthen the Agricultural Fair Practices Act. As Chairman of the Senate Agriculture, Nutrition and Forestry Committee, I intend to use this legislation as a basis for developing a strong competition title in the new farm bill we are crafting this year.
In a marketplace that is so consolidated and vertically integrated, USDA must have strong oversight to ensure proper enforcement of the Packers and Stockyards Act, which was passed in 1921 to keep markets fair. Last year, a report by USDA's Inspector General, which I commissioned, found widespread non-enforcement; efforts to block investigations of unfair and anti-competitive conduct; and even efforts to cook the books to give the appearance of enforcement by the Grain Inspection, Packers and Stockyards Administration (GIPSA) at the Department of Agriculture, even though this enforcement was not actually happening.
My legislation would create a special counsel on competition matters whose sole responsibility would be to investigate and prosecute unfair, anti-competitive behavior in the marketplace. This special counsel would also cut through the bureaucracy and eliminate the possibility of GIPSA and the USDA General Counsel's office ping-ponging investigations involving anti-competitive practices back and forth, wasting time, and never actually doing anything.
My bill would also clear away legal obstacles caused by recent court decisions that make it difficult for producers to bring cases directly against packers to recover damages for unfair, manipulative or discriminatory market conduct.
Finally, this bill requires plain contract language so producers know what a company requires, and it also gives producers three days to cancel a contract after signing it. It prohibits contract confidentiality clauses so that producers may consult with family members or a lawyer, and it ensures that producers who have made a sizeable capital investment do not get their contract prematurely terminated without reason.
Independent producers need this bill because the status quo threatens their existence. With so few buyers left, a handful of companies can require take-it-or-leave-it contracts forcing the producer to make a fundamental decision: sign the contract and go along with unfair terms, or just simply walk away from their family farm and find another occupation. That is not right.
This legislation does nothing to block contractual relationships between truly independent producers and packers; it simply requires fairness in those relationships. If we are serious about getting young people into agriculture, then ensuring a fair marketplace is a critical place to start.
