Washington
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307 Dirksen Senate
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Phone: 202-224-6441
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Wyoming Office
P.O. Box 22201
Casper, WY 82602
307-261-6413
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| Competitive and Fair Agricultural Markets Act of 2006 |
Date Introduced: 02/16/06 |
| Bill Number: S.2307 |
Description: I was very disappointed by the U.S. Department of Agriculture Inspector General’s report released in January 2006. The report detailed the failure on the part of the Grain Inspection, Packers and Stockyards Administration (GIPSA) to enforce the Packers and Stockyards Act. The report described widespread inaction on the part of the agency, actions by management to block and prevent employees from conducting investigations into complaints of anti-competitive market behavior, and efforts to cover up the lack of enforcement by inflating the reported number of investigations conducted. These findings are very disconcerting, and raise serious concerns about how the law is enforced and what needs to be done to ensure fair competition and transparency in our livestock markets.
The issue of fair competition in livestock markets has been a problem for a long time. The Packers and Stockyards Act was originally put in place to protect livestock producers from unfair and anti-competitive market behavior of a small number of meat packers controlling the livestock markets in the 1920’s. Among other things, the act bans price discrimination and manipulation, and other unfair and deceptive practices. One of the early drafters and advocates for the Packers and Stockyards Act was Wyoming Senator John Kendrick. During debate on the Senate floor in 1921, he made the following comments in support of the Act:
“It has been brought to such a high degree of concentration that it is dominated by few men. The big packers, so called, stand between hundreds of thousands of producers on one hand and millions of consumers on the other. They have their fingers on the pulse of both the producing and consuming markets and are in such a position of strategic advantage they have unrestrained power to manipulate both markets to their own advantage and to the disadvantage of over 99 percent of the people of the country. Such power is too great, Mr. President, to repose in the hands of any men.”
Although much has changed since then, many of the concerns about ensuring fair competition and market transparency remain today. Over the last two decades, the number of meat packers has decreased in nearly every sector of animal agriculture. As the number of packers shrinks, the market share of the remaining hand-full of large packers becomes even greater – as does their ability to control the markets and the prices they pay for livestock. With increased concentration in the industry comes a greater need to investigate reports of anti-competitive behavior and enforce all of the terms of the Packers and Stockyards Act.
I often hear from Wyoming constituents who, to an individual, are concerned that the big meat packers have too much control of the livestock markets. Livestock producers often feel they are at the mercy of the large packers. Although there are thousands of ranchers and farmers who raise livestock, there are only a few packers who control the markets. Reports that USDA is not properly or thoroughly enforcing the law to ensure transparency and fair competition demonstrate that livestock producers are concerned for a good reason.
I have joined with Senator Harkin to introduce the Competitive and Fair Agricultural Markets Act, which would strengthen the Packers and Stockyards Act and provide greater accountability for the USDA to ensure fair competition. I believe the bill would help solve many of these problems. Until the bill is enacted, I strongly recommend that the USDA aggressively enforce the laws. The current inaction by the Department is not acceptable.
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