WASHINGTON, May 4, 2023 – Fair and competitive markets have long been the cornerstone of the American economy. Competition ensures that American farmers, ranchers, and those who grow our nation’s food to have the freedom to choose among different suppliers, employers, and retailers to buy and sell their product and the products they need. It spurs innovation, improves opportunities for producers and workers, and increases resiliency in the nation’s food supply. For far too long, however, agriculture policy has been focused on ‘get big or get out’, resulting in the acceleration of corporate consolidation. This consolidation undermines economic resiliency and robust price competition. It lowers farmers’ and ranchers’ earnings, hamstrings their ability to compete, and limits the ability for rural economies to secure robust, self-sustaining prosperity. In addition, the COVID-19 pandemic brought home to farmers, workers, and consumers the harms caused by bottlenecks in the center of America’s agricultural and food systems. The pandemic exposed the risks and dangers created by many of today’s production systems, which value hyper-efficiency over competition and resiliency.
Since President Biden issued the historic Executive Order on Promoting Competition in America’s Economy, USDA has taken a range of actions to tackle competition issues in agricultural markets. To address these large and complex problems and as set out in our competition report, USDA is using all tools available, including working in concert with the rest of the Administration.
Highlights of USDA’s efforts include:
Launching an unprecedented multibillion dollar investment plan to directly incentivize competition in food processing and fertilizer, creating more market opportunities and input options for producers.
USDA is investing $1 billion to expand independent meat and poultry processing capacity across the country as part of the Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain.
Already, USDA has awarded:
- $171 million to help 31 small businesses offer more processing capacity for farmers in 23 states, through the Meat and Poultry Processing Expansion Program (MPPEP).
- $54.6 million through 278 grants in 45 states through the Meat and Poultry Inspection Readiness Grant Program (MPIRG), which helps processors expand operations or achieve a federal grant of inspection.
- USDA has also made investments in research. In March, the University of Arkansas was awarded a $5 million grant from the AFRI Center of Excellence for Meat and Poultry Processing and Food Safety Research and Innovation (MPPFSRI). In addition, $13.9 million in grants from the Meat and Poultry Processing Research and Innovation – Small Business Innovation Research Phase III – program were awarded to 14 small and mid-sized meat and poultry processors who will trial food safety and quality assurance technologies. These grants are administered by USDA’s National Institute of Food and Agriculture.
In addition, USDA is investing up to $25 million through the Meat and Poultry Processing Capacity- Technical Assistance Program (MPPTA). AMS identified six organizations to serve as technical assistance providers, which have already responded to more than 500 separate requests for technical assistance. This month, USDA also announced the availability of up to $125 million through two new grant programs - the Indigenous Animals Harvesting and Meat Processing Grant Program and the Local Meat Capacity Grant Program – that will improve tribal nations’ food and agricultural supply chain resiliency by developing and expanding value-added infrastructure related to meat from indigenous animals like bison, reindeer or salmon and fund innovative projects designed to build resilience in the meat and poultry supply chain by providing producers with more local processing options and strengthening their market potential.
USDA has also stood up and dedicated $500 million for the Fertilizer Production Expansion Program, which supports fertilizer production that is independent, made-in-America, innovative, sustainable and farmer-focused. At Commodity Classic in March, USDA announced $29 million for the first round of the grant program. Examples of recipients include a business in Washington State that uses patented technology to manufacture and process raw manure and fish waste into fertilizer, and another in Alabama that uses slow-release technology to improve nutrient efficiency.
Reinvigorating USDA’s century-old fair and competitive market laws with new rules and enforcement to counter unfair, deceptive, and anti-competitive practices and empower producers and growers.
USDA has proposed rules under the Packers and Stockyards Act to promote transparency in poultry contracting and tournaments and prohibit discrimination, retaliation, and deception in a range of circumstances. These new rules, if adopted, would enhance transparency and enhance market access in a range of circumstances.
Under the proposed rule “Transparency in Poultry Contracting and Tournaments,” growers would gain better insight into the actual marketplace and its risks before making key financial decisions, such as entering a poultry growing arrangement or making an additional capital investment. And to help growers be better growers and to protect growers against potential deceptive practices, the proposed rule would require integrators to give growers key information about the inputs they receive under tournament-specific input disclosures.
The “Inclusive Competition and Market Integrity” proposed rule aims to: protect people at higher risk of unjust treatment in the marketplace, based on their race, gender, sexual orientation, and religious affiliation; ban retaliatory practices to protect activities such as communicating with government agencies, joining producer or grower associations, being a witness in a proceeding against a packer or live poultry dealer, and asserting legal and contractual rights; and offer protection against deceptive contracts that are false, misleading, and result in harm to producers.
AMS is also working on additional rules and regulations to address unfair practices, undue preferences, and requirements to show harm to competition, as well as poultry fairness issues.
In March, USDA announced a proposed rule that allows the voluntary “Product of USA” or “Made in the USA” claim to be applied only to those FSIS-regulated products that are derived from animals born, raised, slaughtered and processed in the United States, which better aligns with consumer understanding of what the label means.
Transparency is also important for producers. USDA has launched its pilot Cattle Contracts Library, which will provide new disclosure to the industry and public regarding the key terms, conditions, and volumes under which cattle are contracted, bringing sunshine to practices in what is now the largest part of the cattle market. USDA will continue to work with Congress to enable this pilot program to deliver meaningful and lasting value to producers. The pilot is funded through resources allocated by the Congressionally-passed Consolidated Appropriations Act of 2022, and will run through September 30. USDA will continue to work with Congress to enable this pilot library to deliver meaningful and lasting value to producers.
Other federal agencies are also supporting these efforts. USDA and the Department of Justice (DOJ) are committed to effectively enforcing federal fair trade and competition laws that protect farmers, ranchers, and other agricultural producers and growers from unfair and anticompetitive practices, and the two agencies have already achieved important enforcement successes. In addition, USDA and DOJ developed the Farmer Fairness portal where you can file a complaint or tip if you suspect a violation of the Packers and Stockyards Act or any other Federal law governing fair and competitive marketing and contract growing of livestock and poultry.
USDA has also announced a partnership with the State Attorneys General to share resources and enhance enforcement of unfair and anticompetitive practices in food and agriculture.
Creating a fairer market for seeds, other agricultural inputs
In March, USDA released a report, titled “More and Better Choices for Farmers: Promoting Fair Competition and Innovation in Seeds and Other Agricultural Inputs,” that includes recommendations for improving market fairness. USDA took immediate action on three of these recommendations:
- USDA’s Agricultural Marketing Service (AMS) is standing up a new Farmer Seed Liaison, which will deliver on report recommendations. Specifically, the Seed Liaison will boost transparency and reduce confusion in a complex seed system by helping facilitate communication between farmers and plant breeders and the patent system.
- AMS released a Notice to Trade regarding compliance with disclosing the kind and variety of seeds under the Federal Seed Act. USDA will also expand its FarmerFairness.gov portal to enable farmers and seed businesses to report tips and complaints related to competition and consumer protection in the seed markets.
USDA and the U.S. Patent and Trademark Office (USPTO) formed a Working Group on IP & Competition in Seeds and Other Agricultural Inputs, where USDA and USPTO, together with DOJ and FTC, will work to promote fair competition in the seed market.
Enhancing value-added market access.
As part of its work to transform the nation’s food system, USDA is investing in more and better markets across the food system. These efforts are designed to strengthen our local and regional food systems, create new market opportunities, add value for agricultural producers and consumers, and spur economic activity locally — helping communities that have been left behind by the current agricultural models and supporting good-paying jobs throughout the supply chain. Programs through which USDA is accomplishing these goals include the Organic Transition Initiative, Healthy Meals Incentives, Regional Food Business Centers, Local Agricultural Marketing Program (LAMP), Dairy Business Innovation (DBI) Initiatives, and Specialty Crop Block Grant Program (SCBGP).
Promoting competition in transportation networks that producers depend on.
As part of Secretary Vilsack’s work as co-chair of the Biden-Harris Administration’s Supply Chain Disruptions Task Force, USDA has been supporting whole-of-government efforts to address supply chain disruptions related to ports, availability of truck drivers, and poor or inadequate service being provided to U.S. companies exporting agricultural commodities by ocean carriers. Some of these actions include:
- USDA has been actively developing options to alleviate market disruptions for agricultural producers and companies using $500 million in Commodity Credit Corporation (CCC) resources set-aside last fall, with a special focus on transportation challenges such as ports and trucking. The efforts being funded by these resources, such as setting up “pop up” sites at the Ports of Oakland and Seattle to help improve service for shippers of U.S. grown agricultural commodities, are helping to provide relief from agricultural market disruption and other near-term obstacles related to the marketing and distribution of certain commodities.
- In December 2021, Secretary Vilsack and Transportation Secretary Buttigieg sent a letter to the main ocean carriers that have been providing poor service or refusing to serve US exporters of agricultural commodities as the ocean carriers ignore their responsibilities to support reciprocal trade in order to chase profits that have reportedly topped $100 billion.
- In March 2022, Secretary Vilsack sent a letter to the Surface Transportation Board (STB) requesting urgent action to improve rail service for agricultural commodities. Former Deputy Secretary Jewel Bronaugh also appeared before the STB in April 2022 to underscore the need for action on this issue.
- In January 2023, Secretary Vilsack sent a letter to the Federal Maritime Commission (FTC) providing feedback to strengthen the FTC’s proposed rule that would define an unreasonable refusal to deal or negotiate with respect to vessel space accommodations provided by an ocean common carrier, in response to ocean carriers’ systematic neglect of exports in favor of higher value import cargo.
- On January 31, 2022, USDA announced a partnership with the Port of Oakland to ease port congestion and encourage restored service for exporters of US-grown agricultural commodities. Under this effort, USDA supports new “pop-up” site to make it easier for agricultural companies to fill empty shipping containers with commodities. A similar effort with the Northwest Seaport Alliance in Seattle was announced on March 18, 2022.
- AMS regularly conducts and sponsors research and engagement on the impact of competition in transportation on agricultural markets. As a result, it has identified several priorities for advancing competition in agricultural transportation, including relating to railroads’ common carrier obligations, shipper chassis rules, rate dispute process reforms for smaller shippers, competitive switching, first-mile/last-mile data collection, and detention and demurrage interpretations.
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