May 19, 2022
In the face of consolidation among meat processors and rising food prices across the country, the House Agriculture Committee advanced a bill out of committee, the Meat Packing Special Investigator Act, which would establish a new “Office of the Special Investigator for Competition Matters” within USDA’s Packers and Stockyards Division. However, the bill does not have unanimous support from House Agriculture Committee members or industry stakeholders.
This new USDA Special Investigator would focus on preventing shortages, enforcing America’s anti-trust laws, and holding bad actors in the meat and poultry industry accountable, according to a release from sponsor Rep. Abigail Spanberger, D-Va. The Senate has also introduced, but not advanced, a companion bill in the chamber.
Specifically, the act establishes an Office of the Special Investigator within USDA to investigate and prosecute Packers and Stockyards Act claims. The office also would have the authority to bring civil actions, a responsibility currently under the Department of Justice’s authority. The bill now goes to the full House for consideration.
During the House Agriculture Committee markup on Tuesday afternoon, Republicans and Democrats discussed in depth the need for additional regulatory oversight of the Packers and Stockyards Act as well as whether the DOJ could bring civil charges rather than the current criminal charges it now focuses on.
Ahead of the Committee’s votes, Spanberger spoke in favor of the Meat Packing Special Investigator Act and urged her colleagues to move it forward.
“Colleagues from both parties, from all regions of the country, have consistently expressed skepticism of current enforcement of the Packers and Stockyards Act,” Spanberger notes ahead of the vote. “We have also discussed frustration with the speed and capacity of the current investigation at the Department of Justice into the big four meat packers. We are coming up on the two-year anniversary of [Department of Justice] launching an investigation, but we have not gotten any substantive updates or answers."
“Meanwhile, America is losing a staggering 40 family cattle farms a day. We cannot continue to accept the status quo, and America’s consumers cannot continue to accept higher prices and less-secure food supply chains due to concentration,” Spanberger says.
The National Cattlemen’s Beef Association says the special investigator bill would create a new position within USDA with immense prosecutorial and subpoena power. To comply with this legislation, USDA would be forced to divert resources from other mission-critical areas of the Agricultural Marketing Service, stealing resources from the essential programs cattle producers rely on every day.
“Cattle producers strongly support effective oversight of the meatpacking sector, but the special investigator bill does nothing to accomplish that goal. Rather than focusing on adequate staffing and funding for the woefully under-resourced Packers and Stockyards Division at USDA, this hasty proposal was rushed through the legislative process without consideration of the confusing bureaucratic mess it would create. Arming USDA with unchecked subpoena and prosecutorial power while significantly undercutting the Department of Justice’s role in the process is poor practice,” says NCBA Vice President of Government Affairs Ethan Lane.
During the hearing, Republicans argued the additional oversight would create additional costs to those in the industry that would eventually be passed on to consumers. Meanwhile, Spanberger defended the program and states if processors were following the rules in the first place it would not require any additional costs. Republicans say the bill is duplicative, saying USDA and DOJ already have the authorities this bill would grant.
“Of particular concern is the creation of a special investigator empowered to enforce the new changes to the Packers and Stockyards Act regulations soon to be announced by the Biden administration. These rules – like those previously proposed by USDA under then-Secretary Tom Vilsack in 2010 – are likely to have far-reaching, unintended adverse consequences,” explains Julia Anna Potts, president and CEO of the North American Meat Institute. “The special investigator (and staff) would feel emboldened and obligated to bring as many cases as possible, warranted or not, to test and expand the legal limits of the new rules. The resulting legal uncertainty and market chaos will accelerate unpredictable changes in livestock and poultry marketing that will add costs to both producers and consumers at a time of high inflation.”
The administration’s fiscal year 2023 budget request specifically ties increased funding for the Packers and Stockyards program to the forthcoming proposed rules: “Increased funding is requested to fund new statutory requirements, to strengthen oversight of livestock and poultry markets and minimalize IT security vulnerabilities.”
National Farmers Union President Rob Larew says passage of the bill is a priority for NFU. "Laws intended to protect markets from monopolies and anti-competitive practices in agriculture are not being adequately enforced. Greater enforcement of competition laws by USDA will better ensure America’s independent family farmers and ranchers have a chance to succeed in today's marketplace, now dominated by monopolies," states Larew.
House members did debate an amendment by Rep. Jim Costa, D-Calif., that would ensure the one in charge of the oversight is a career official and not a political appointment.
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