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White House increases focus on ag competition

Holly Spangler Biden at AFBF Holly Spangler.jpg
PARTNER AT WHITE HOUSE: "I want you to know that every day, I mean this every day, that you'll have a partner in the White House," shares President Joe Biden in an address to the American Farm Bureau Federation on January 10, 2022.
Will the President Biden's actions do more harm than good on trying to fix the problems of today?

“Capitalism without competition isn't capitalism. It's exploitation.”

The phrase was shared by President Joe Biden in a video address with farmers at the American Farm Bureau Federation on January 10, and with five farmers the week prior during a roundtable discussion on meat and supply chains. It's becoming his battling cry in discussions with farmers. 

In July, Biden signed an executive order to promote competition, which he says he hopes will help level the playing field for family farmers and ranchers. In his message at AFBF, he outlines what farmers deserve:

  1. Affordable seed and other inputs.
  2. Markets that allow you to get a fair price for your livestock and other products.
  3. Agricultural export services and timely services to get goods to market around the world.
  4. Right to repair the equipment you own yourself or at an independent shop.

That list seems reasonable. But the question is whether actions from the executive branch offer the right way to tackle competition. It will be important to watch how impacts trickle down to other segments of the food supply chain and into rural Main Streets.

A push to increase local processing capacity seems good at first glance, but if the initial loan support offers local investment, what happens when the initial government funding dries up and the big guys come in to scoop up the facilities? What if mandated negotiated cash trade requirements actually eliminates efficiencies and costs producers and packers an additional $25/head?

While speaking at the AFBF meeting, Stephen Koontz, livestock extension economist at Colorado State University, notes so much attention is on packers, but oversupply of cattle and strong demand is driving prices. During the low of the pandemic, packers could have allowed prices to go even lower. But they didn’t. Why? Because they need producers to stay in business for them to stay in business.

Some cattle producers may not think they’re getting a fair share. “Economics is not about fair share. It’s about cost efficiency,” Koontz says. “Everybody I know who went to college with jobs not in ag doesn’t expect fair.”

Related: White House focuses on meat supply chain challenges

During the White House roundtable, Brent Johnson, president of the Iowa Farm Bureau Federation, delivered a message to the president about the need to ensure farmers share in some of the profitability moving forward. If packers or retailers are passing high prices onto consumers, that also needs to find its way back into the returns for farmers.

Sometimes regulation and oversight are needed to make sure others are not colluding or taking advantage of those in the system. USDA will do that with the anticipated attempt to again tweak the Packers and Stockyards Act in early 2022.   

Announced at the roundtable meeting at the White House, the Justice Department and USDA also expressed a shared commitment to protect farmers from anticompetitive practices and are “prioritizing matters impacting competition in agriculture,” a joint statement explains.

The agencies will jointly develop, within 30 days, a centralized, accessible process for farmers, ranchers and other producers and growers to submit complaints about potential violations of the antitrust laws and the Packers and Stockyards Act.

As appropriate, USDA will make reports or refer potential violations of the Packers and Stockyards Act to the Justice Department to better enable its antitrust division to pursue meritorious competition-related cases and to allow the agencies to collaborate on issues of mutual interest.

Additionally, the Justice Department and USDA will work together to identify and highlight areas where Congress can help modernize these toolkits.

Vilsack feels good about the different ways this administration is attempting to tackle the growing problem.

“So, I think it's a comprehensive holistic effort here, and it's designed to send a message to producers and consumers. We're on their side. We're going to try to get a better shake for producers and a better price for consumers,” Vilsack says.

TAGS: Farm Policy
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