OPINION President Joe Biden recently signed an executive order to strengthen protections for farmers, directing the U.S. Department of Agriculture to issue new rules aimed at ending the exploitation of livestock farmers by corporate giants. The department is also to increase opportunities for farmers to access markets at fair prices and reach consumers through farmers markets and other alternative retail channels. The order also directs the USDA to develop standards and labels that allow consumers to shop their values to support fair prices and working conditions for farmers and farmworkers.
Major corporations have grown and vertically integrated to control almost every part of the broiler-chicken supply chain. But raising broiler chickens to maturity is contracted to independent farmers, with more than 97 percent of broiler farmers operating though contracts with corporate integrators, according to recent data. Those farmers are paid through a tournament system in which their performance – and pay – is evaluated against other farmers who have contracts with the same integrator, pitting them against each other for the greatest pay.
Contract broiler farmers have called the tournament system unfair and exploitative, alleging that pricing practices by corporate integrators violate federal law under the Packers and Stockyards Act. For too long those practices have gone unregulated. To make matters worse, the Trump administration reversed Obama-era regulations intended to protect farmers by stripping the Grain Inspection, Packers and Stockyards Administration – the federal agency charged with providing oversight of the meat industry – of virtually all its authority. This new executive order and subsequent USDA rulemaking will provide important protections for livestock producers.
Competition is good for businesses and it’s good for consumers. Which is why the federal government has a critical role to play in ensuring our agricultural markets are competitive and fair for farmers, ranchers, workers and consumers. Prioritizing fair and competitive markets is government at its best. We encourage the USDA to act swiftly to develop the rules and policies called for in the executive order.
We’ve lost 40 percent of U.S. broiler farms during the past few decades, while major processing companies have consolidated and grown ever larger. In 2021 just four companies – Tyson Foods, Pilgrim’s Pride, Perdue Foods and Sanderson Farms – account for 61 percent of all chicken-processing revenues. The new rules will give livestock farmers and ranchers more bargaining power in markets with corporate giants, and protect them from retaliation for speaking out against abuse and exploitation.
Meanwhile the United States has lost half of its midsize farms during the same period to consolidation. Increasing midsize farmers’ access to local markets – and giving consumers the information they need to shop their values through clear standards and labeling – could create new opportunities for midsize farms.
Rebecca Boehm is an economist with the Union of Concerned Scientists, which puts rigorous and independent science to work to solve our planet’s most pressing problems. Visit secure.ucsusa.org for more information.