Reuters – The Biden administration proposed a rule May 26 requiring U.S. meat packers to be more transparent in their dealings with contract farmers, in an effort to enhance competition in the highly consolidated industry.
Farmers and consumer groups have argued for decades that consolidation in the beef, pork and chicken sectors, where four companies control between 55 per cent and 85 per cent of the market, suppresses farmer pay and results in higher prices for shoppers.
In January 2022, the administration pledged to address these concerns with proposed rules to enhance enforcement of the Packers and Stockyards Act, a century-old law meant to protect farmers from unfair market practices.
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The rule announced May 26 would require poultry companies to provide more information and set promises with contract chicken growers, who receive their chicks, feed and other inputs from the companies and are paid per pound of chicken they raise for slaughter.
Contracts would have to guarantee a certain number of chickens per year and require that companies make several disclosures to farmers, including details of inputs they provide to each farmer and what farmers can expect to get paid.
The U.S. Department of Agriculture (USDA) is also opening an inquiry into whether aspects of chicken farmer contracting “are so unfair that they should be banned or otherwise regulated,” the agency said in a press release.
Two additional rules will come this summer and fall, according to a USDA official.
An Obama administration effort to implement similar rules was unwound by the Trump administration in 2017, angering farmers who had pushed for such rules.
The agency is also putting another $200 million — on top of $500 million pledged in July 2021 — toward financing independent meat-processing plants.
“The funding and new rule we’re announcing today ultimately will help us give farmers and ranchers a fair shake, strengthen supply chains, and make food prices fairer,” U.S. Secretary of Agriculture Tom Vilsack said in a statement.
