OPINION To address corporate consolidation in nearly every sector, President Joe Biden recently signed a sweeping executive order aimed at promoting competition and fairness throughout the economy.
The order includes 72 directives that will be carried out by 12 federal agencies, many of which target the agricultural sector:
- It will offer farmers greater legal recourse when they are treated unfairly by corporations. In order to challenge a corporation when it violates the Packers and Stockyards Act, a farmer currently needs to prove the entire industry has been harmed by the practice, rather than just him or herself. The executive order directs the U.S. Department of Agriculture to change that so a farmer only needs to prove injury to her or himself in order to take legal action.
- It will prevent corporations from retaliating against farmers who speak out against unfair practices. In the livestock sector, corporations often have significant control concerning farmers – determining contracts, inputs and wages. As a result many farmers won’t say anything when they experience discrimination for fear the corporation will sabotage the farm operation in retribution. The order would put into place anti-retaliation protections so farmers can assert their rights without the threat of retaliation.
- It will offer fairer wages to contract poultry growers. Contract-poultry-grower wages are determined by a “tournament system,” in which growers are pitted against one another. The growers who perform the best earn a bonus per pound of chicken, while those who perform the worst suffer a wage deduction – even though most growers have little influence concerning their yields. The order would restructure the system so growers are paid more fairly.
- It will give farmers the right to repair their own equipment. Many farm-equipment manufacturers refuse to sell software-repair tools to farmers or independent mechanics. That all but forces farmers to take broken machinery to a licensed dealership, which can be expensive and inconvenient. The executive order encourages the Federal Trade Commission to address anticompetitive restrictions for the repair of items.
- It will limit “Product of USA” labels only to meat raised in the United States. Under current regulations the “Product of USA” label can be used on meat products that were born and raised in another country, as long as they were processed in the United States. The practice misleads consumers and puts American ranchers at a disadvantage. The order encourages the FTC to “ensure consumers have accurate, transparent labels that enable them to choose products made in the United States.”
- It will help prevent rural-hospital closures. Due to chronic underfunding and unchecked mergers, 139 rural hospitals have closed in the past decade. That’s left rural residents with fewer and more-expensive options when it comes to health care. In the order President Biden urges the FTC to review and revise merger guidelines to ensure patients are not harmed by such mergers.
- It will encourage more choices in banking and credit in rural communities. Between 2012 and 2017, 14 percent of rural bank branches closed – in part due to mergers and acquisitions. That left one in four nonmetropolitan counties without a single bank. The order encourages the Department of Justice to provide more-robust scrutiny of banking mergers and make it easier for customers to change banks.
During the past 50 years we’ve seen dramatic consolidation in the agricultural industry, with just a handful of corporations seizing control over each link in the food-supply chain. It’s no coincidence that has coincided with a slew of problems for farmers – depressed prices, little bargaining power, few choices, misleading labels and the inability to repair their own equipment among other headaches. If that weren’t enough, extreme concentration has also made our food system extremely vulnerable to disruptions and bottlenecks, as has become abundantly clear recently in the wake of extreme weather events, the pandemic and cyberattacks.
After suffering corporate abuse for so many years, it’s reassuring that farmers may finally have a level playing field. The executive order will offer them more autonomy in their relationships with corporations, protections from mistreatment, fairer and more-accurate labeling, the right to repair their machinery and more-robust local markets – which, taken together, will go a long way toward building the resilient and equitable food system that farmers and consumers deserve. We urge the administration to swiftly implement the changes and follow with strong antitrust enforcement.
Rob Larew is president of the National Farmers Union, which advocates on behalf of almost 200,000 American farm families and their communities. Visit NFU.org for more information.