Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. GRASSLEY (for himself, Mr. Johnson, Mr. Enzi, and Mr. Harkin):

S. 27 A bill to amend the Packers and Stockyards Act, 1921, to make it unlawful for packet to own, feed, or control livestock intended for slaughter; to the Committee on Agriculture, Nutrition, and Forestry.

Mr. GRASSLEY. Mr. President, the goal of the farm bill was to improve the economic condition of America's farmers over the next few years. However one of the many shortcomings of the new law is that it fails to protect family farmers and independent livestock producers from vertical integration in the livestock industry.

In recent years, family farmers from across Iowa have contacted me to express their fears about the threat they fell from concentration in the livestock industry. They fear that if the trend toward increased concentration continues, they may be unable to compete effectively and will not be able to get a fair price for their livestock in the marketplace.

The bill I am introducing would prevent meat packers from assuming complete control of the meat supply by preventing packers from owning livestock.

This bill would make it unlawful for a packer to own or feed livestock intended for slaughter. Single pack entities and packs too small to participate in the Mandatory Price Reporting program would be excluded from the limitation. In addition, farmer cooperatives in which the members own, feed, or control the livestock themselves would be exempt under this new bill.

We have tightened down the limitations in this new version of the packer ban. The last version provided an exemption to plants that killed less than 2 percent of the Nation's livestock, per commodity. That meant plants that killed less than 1.9 million pigs or approximately 725,000 cattle were excluded under the old version. We have changed the standard to be consistent with the Mandatory Price Reporting law and other legislation I've introduced. That means the new limit will be 125,000 for cattle and 100,000 for swine.

It's also important to realize that this is not the original version I co-sponsored with Senator Johnson. Instead, this is the version I successfully offered on the floor during the debate on the farm bill that removed the word "control" so that the packers couldn't attack us with a red-herring argument.

It's important for our colleagues to remember that family farmers ultimately derive their income from the agricultural marketplace, not the farm bill. Family farmers have unfortunately been in a position of weakness in selling their product to large processors and in buying their inputs from large suppliers.

Today, the position of the family has become weaker as consolidation in agribusiness has reached all time highs. Farmers have fewer buyers and suppliers than ever before. The result is an increasing loss of family farms and the smallest farm share of the consumer dollar in history.

One hundred years ago, this Nation reacted appropriately to citizen concerns about large, powerful companies by establishing rules constraining such businesses when they achieved a level of market power that harmed, or risked harming, the public interest, trade and commerce. The United State Congress enacted the first competition laws in the world to make commerce more free and fair. These competition laws include the Sherman Act, Clayton Act, Federal Trade Commission
Act and Packers & Stockyards Act.

Since that time, many countries in the world have followed this U.S. example to constrain undue market power in their domestic economies.

Unfortunately, competition policy has been severely weakened in this country, especially in agriculture, due to Federal case law, underfunded enforcement, and unfounded reliance on efficiency claims. The result has been a significant degradation of the domestic agricultural market infrastructure. The current situation reflects a tremendous mis-allocation of resources across the food chain. Congress must strengthen competition policy within the farm sector to reclaim a properly operating marketplace.

While this legislation does not accomplish all that we need to do in this area, it's an important first step toward remedying the biggest problem facing farmers today, the problem of concentration.