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Republicans Question Proposed Meatpacking Reforms

posted on February 17, 2011

Sky-high grain and oilseed prices are not exactly a welcome development for the livestock sector either. But earlier this month the world's largest meat processor, Tyson Foods, reported its net income climbed 86 percent in the first quarter of the company's fiscal year.

The improvement is a welcome reprieve from an industry downturn brought on by slumping demand due to the recession and sharply higher grain prices.

America's farmers and ranchers are also enjoying higher producer prices these days, but some say too few companies control too much of the meat production process, if you'll pardon the expression, from semen to cellophane.

The Obama Administration has proposed sweeping reforms to address potential antitrust issues in the livestock sector, but the plans ran into opposition this week in the House Agriculture Committee.

Republicans Question Proposed Meatpacking Reforms

Over the past year, USDA has been working with the Justice Department on an investigation of potential antitrust issues in the livestock sector. Agriculture Secretary Tom Vilsack has said the reforms could help stimulate rural economies where just a few companies dominate livestock production.

But, the Obama administration's effort to overhaul antitrust rules for the meatpacking industry –called the toughest regulations since the 90-year-old Packers and Stockyards Act --has run into strong opposition from Republicans in Congress.

House Agriculture Committee Chairman Frank Lucas expressed concerns about the rules proposed by USDA. The Oklahoma Republican added that the agency will have to work hard to change the minds of skeptical members on the panel and others interested in the issue. In a statement, he said, "The primary concern, and this is reflected in the conversations I have with both my colleagues and constituents, is about the potential adverse impact on producers."

The reforms, which would redraw the balance of power between meat companies and the farmers and ranchers who raise animals for them, have been one of the administration's signature efforts in addressing the growing concentration of corporate power in agriculture.

Many farmers and ranchers long have complained about their lack of power. The proposed changes would, among other things, make it easier for farmers and ranchers to sue companies on antitrust grounds.

The American Meat Institute, which represents meatpackers, said the new rules will upend decades of evolution in the industry. In a statement, a representative for AMI said, "Instead of buying animals in an open bidding process, meatpackers now sign deals with ranchers to produce just the kind of beef that consumers want. The new rules would limit the terms of those contracts and make meatpackers the target of litigation by unhappy ranchers."


Tags: agriculture Congress government industry livestock meat news Republicans USDA