The Biden administration plans to issue a new rule to protect the rights of farmers who raise cows, chickens and hogs against the country’s largest meat processors as part of a plan to encourage more competition in the agriculture sector.
The new rule that will make it easier for farmers to sue companies they contract with over unfair, discriminatory or deceptive practices is one of several steps that the White House plans to announce in the next few days. The U.S. Department of Agriculture is also expected to tighten the definition of what it means for meat to be labeled a “Product of USA” to exclude when animals are raised in other countries and simply processed in the United States.
Some farmer advocacy groups have pressed for these changes for several years but Congress and the meat processing industry have resisted the changes in the past. A USDA official familiar with the White House’s plan said an executive order is expected to be announced later this week that will clear the way for the new rules.
The regulation that will make it easier for farmers to bring complaints under the Packers and Stockyards Act is similar to one the Trump administration killed four years ago. That rule was first proposed in 2010.
Currently, several court rulings have interpreted federal law as saying a farmer must prove a company’s actions harm competition in the entire industry before a lawsuit can move forward. The new rule would ease that high burden of proof.
Chicken and pork producers, for example, must often enter long-term contracts with companies like Tyson Foods and Pilgrim’s Pride that farmers allege lock them into deals that fix their compensation at unprofitably low levels and forces them deeply into debt.
Previously, the major meat companies have defended the contract system as fair that calls for farmers to provide the barns and labor to raise chickens while the companies provide chicks, feed and expertise to help raise the birds. When the previous rule was killed in 2017, the National Chicken Council trade group said it would have opened up the industry to a flood of “frivolous and costly litigation.”
The USDA also plans to review the definition of what it means for meat to be labeled a “Product of USA” under its rules. Currently, companies are allowed to use that label anytime meat is processed in the United States even if the animals were born and raised in another country. USDA officials say that today most grass-fed beef labeled as made in the country actually comes from imported cattle. Agriculture Secretary Tom Vilsack has said he wants that label to accurately reflect what consumers expect when they read it.
The Agriculture Department also plans to invest in new local and regional markets, so farmers will have more options of where to sell the animals and crops they raise. Critics have said the major meat processing companies dominate the market for cattle, hogs and chickens, which makes it harder for farmers to get a fair price for the animals they raise.
This week’s expected executive order follows an announcement earlier this spring that the USDA was planning to strengthen protections for farmers under the law and encourage more competition in livestock markets.
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