Regulations with teeth opposed in Congress, then withdrawn
During the 2008 presidential campaign, Barack Obama promised to "strengthen anti-monopoly laws and strengthen producer protections to ensure independent farmers have fair access to markets, control over their production decisions, and fair prices for their goods."
The effort to back up this pledge has proceeded -- zigzaggingly -- along two tracks.
One track was a series of five workshops on "exploring competition in the agricultural sector” held by the Antitrust Division of the Department of Justice and the Agriculture Department. The final report said the workshops offered "a wealth of discussion and information on the state of competition in the agricultural sector,” based on discussions that included "farmers, ranchers, processors, retailers, workers, academics, law enforcers, regulators, and other federal, state, and local government officials.” The sessions covered "row crops, dairy products, hogs, cattle, and poultry.”
The report concluded that "a clear lesson of the workshops” was that "antitrust enforcement has a crucial role to play in fostering a healthy and competitive agriculture sector.”
The second, and more tangible, track involved the process of writing regulations to update regulations enforced by the Agriculture Department's Grain Inspection, Packers and Stockyards Administration (known as the GIPSA rules for short).
"One of the proposed changes would have specifically banned company retaliation against farmers who tried to negotiate the terms of a contract,” according to a lengthy story on the regulatory battle in the Washington Monthly. "Another would have required any company that forced farmers to make capital investments to offer contracts long enough for the farmers to recoup some minimum amount of that investment.”
Craig Watts, a poultry farmer from Fairmont, N.C., told the magazine, "Before, they would throw us a little bone once in awhile. But with these rules we knew they meant business.”
However, a range of agribusiness interests came out against the proposed rules, and as they were working their way toward being finalized, members of Congress joined in opposition. Though the opponents included both Democrats and Republicans, efforts to derail the rules accelerated after the GOP took control of the House in the 2010 elections.
Congress had no official role in the rulemaking process, but lawmakers are able to insert amendments known as "riders” onto other pieces of legislation in order to block implementation of a rule, usually by cutting off funding. During the congressional back-and-forth over spending bills between June 2011 and November 2011, opponents of the rule won the battle to include a key rider.
At that point, the Agriculture Department -- which hadn't made the rules final yet -- pulled back the most controversial portions of the proposed rule and sent the White House a far more limited proposal. Limited regulations were eventually issued, but even these pared-back rules are still being targeted by lawmakers. Riders that would eliminate the enacted rules are pending in both an appropriations bill and a farm bill reauthorization.
Despite a significant outreach effort and an initial set of proposed rules with teeth, the administration ultimately ceded to pressure on the majority of what it had initially sought. This rates as a Promise Broken.
Justice Department, "Competition and Agriculture: Voices from the Workshops on Agriculture and Antitrust Enforcement in our 21st Century Economy and Thoughts on the Way Forward," May 2012
Justice Department, "USDA/DOJ Public Workshops on Competition in Agriculture," accessed Nov. 28, 2012
Agriculture Department, "Grain Inspection, Packers and Stockyards Administration -- Proposed Rule Outline”
Food and Water Watch, "Fair Farm Rules: Enact the GIPSA Rules,” updated November 2011
National Sustainable Agriculture Coalition, "House Appropriations Committee Passes FY13 Ag Funding Bill,” June 19, 2012
Washington Monthly, "Obama"s Game of Chicken,” November-December 2012
Email interview with Ferd Hoefner, policy director for the National Sustainable Agriculture Coalition, Nov. 26, 2012
Obama's looking out for the little guy
On the campaign trail, Barack Obama said he'd be looking out for family farms.
Indeed, smaller farming operations are increasingly having trouble competing with large-scale farming operations. Part of the problem is that the big farms can offer lower prices for their goods -- take corn for example -- nudging out family farms that have higher production costs and can't afford to sell their crops at deep discounts.
To solve this problem, the U.S. Department of Agriculture and the Department of Justice recently announced a series of workshops to explore issues of competition in the agriculture industry.
Additionally, Agriculture Secretary Tom Vilsack announced in early December 2009 that the USDA's Grain Inspection, Packers and Stockyards Administration has published a final rule to increase fairness and equity in the poultry industry. Poultry processors frequently contract with poultry farmers to raise chickens, but the farmers have long complained that these contracts are unfair because they often require mandatory arbitration to settle disputes, which can be costly to family farms.
So far, the Obama administration is off to a good start in keeping this promise, but we're going to wait and see where this one goes. For now, we'll rate it In the Works.
U.S. Department of Agriculture,
USDA and Justice Department to Hold Public Workshops to Explore Competition Issues in the Agriculture Industry
, Aug. 5, 2009
USDA, Final Rule: Poultry Contracts; Initiation, Performance, and Termination , Dec 2, 2009