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Thomas Asserts Need To Better Audit Packers
Recalls efforts of Wyoming Senator John Kendrick (1921) on Stockyards Act |
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March 9th, 2006 - WASHINGTON – During a hearing today to provide oversight of the Packers and Stockyards Act, U.S. Senator Craig Thomas asserted to witnesses that it’s time to take responsibility in better auditing conduct of the packers.
“It’s your responsibility to ensure that these audits are carried out. Why has it taken 10 years to cause things to change?” Thomas said at the Agriculture hearing today.
Thomas requested today’s hearing on the Packers and Stockyards Act to provide oversight of the auditing process.
“A handful of large packers are asserting control over the market causing a serious disadvantage to our family-run ranches. The fact that the meatpackers could be controlling prices makes me wonder if they’re getting too big for their britches,” U.S. Senator Craig Thomas said in advance of the hearing.
One of the early drafters and advocates for the Packers and Stockyards Act was Wyoming Senator John Kendrick. Senator Thomas recalled in his written statement to the Agriculture Committee that during the debate on the Senate floor in 1921, Kendrick 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,” Kendrick said.
Although much has changed since then, many of the concerns about ensuring fair competition and market transparency remain today.
“We need fair competition in livestock markets,” Thomas said. “There needs to be transparency in how the packers are conducting business. What is most concerning is that the packers have become too concentrated. If our local ranchers can only market to huge meatpackers who appear to be coordinating prices with each other, there’s definitely something wrong.”
“This anti-competitive behavior is just another way for packers to strong-arm their suppliers. USDA should be rebuffing this kind of behavior, but it’s obvious to me it’s not getting done,” Thomas said.
“I’m supportive of an effort to re-establish the intent of the Packers and Stockyards Act. We need to protect livestock producers from the packers and provide USDA with the tools to better enforce the standards.”
The failures by the Grain Inspection, Packers and Stockyards Administration (GIPSA) to enforce the Packers and Stockyards Act was the subject of today’s hearing in the Senate Agriculture Committee.
Thomas is supportive of the following changes to improve producer protections and competition:
· Establish an Office of Special Counsel at USDA to investigate and prosecute violations on competition matters.
· Prohibit unfair or deceptive practices by a person that affects the marketing, receiving, purchasing, sale or contracting of any agricultural commodity.
· Make it unlawful for a processor to not act in good faith with producers regarding agricultural contracts. Give producers contract protections against confidentiality clauses, premature termination, unfair capital investments and arbitration provisions.
· Strengthen the Packers and Stockyards Act of 1921 by clarifying the definition of unfair practices committed by packers.
· Remove a disclaimer clause in the Agricultural Fair Practices Act that currently allows processors the ability to not bargain in good faith with producers who belong to a cooperative marketing association.
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