NeFU Thanks Sec. Vilsack for Fourth Proposed Rule to Strengthen Packers and Stockyards Act Enforcement

June 25, 2024 Lincoln, NE –Nebraska Farmers Union (NeFU) thanks USDA Secretary of Agriculture Tom Vilsack for his leadership in pursuit of long overdue agricultural markets reforms and updates. Sec. Vilsack proposed his fourth rule in a series of efforts to strengthen the enforcement of the USDA Packers and Stockyards Act (P&S Act) by updating the definitions of prohibited unfair practices. 

Secretary Vilsack’s previous proposed rules have dealt with retaliation against producers, deceptive marketing practices by meatpackers, discrimination against ag producers, and poultry contracting. 

The P&S Act was originally passed 103 years ago in 1921 to enforce the Packers Consent Decree of the Sherman Anti-Trust Act. The 1918 Federal Trade Commission had previously found that 5 packers controlled 70% of the slaughter, and that conditions warranted prosecution under the Sherman Anti-Trust Act, which led to the creation of the Packers Consent Decree.

In addition to its Packers Consent Decree enforcement responsibilities, Congress gave the P&S Act and USDA broad based agricultural market oversight and regulatory responsibilities, which are still in force. In the past 100 years, in legal enforcement cases, the meatpackers lawyers have dulled the clear meaning of unfair practices which has undermined the effectiveness of P&S Act enforcement. When USDA enforcement actions are not successful in court, the case law results produce less aggressive enforcement.

As a result, for several decades, National Farmers Union, NeFU, and other Farmers Union states have been asking USDA to update and sharpen the P&S Act definitions in order to strengthen the effective enforcement of prohibited practices. At long last, the Biden Administration is positively responding.

NeFU President John Hansen said, “To his credit Secretary Vilsack has responded to the need to clarify and sharpen the definitions of prohibited actions by working closely with the anti-trust division of the Justice Department. Unfortunately, Congress is unwilling to address the need for agricultural market reforms or return competition to ag markets.  NeFU supports Secretary Vilsack’s proposed rules and hope they get finalized as soon as possible. Fortunately for agriculture, Secretary Vilsack and the Biden Administration are willing to step up and lead on ag market reform and competition issues.”

This proposal defines and updates the enforcement approach of “unfair practice”. This proposed rule “defines unfair practices as conduct that harms market participants and conduct that harms the market” according to the USDA Agricultural Marketing Service.