Do the USDA's new rules protect or overregulate livestock and poultry producers?

Dive Brief:

  • The U.S. Department of Agriculture announced three new rules aimed at offering protection to livestock and poultry producers whose customers are larger companies, according to a news release.
  • One rule, effective immediately, enables farmers to more easily sue the companies they contract with over unfair or anti-competitive business practices. Under this rule, a farmer no longer has to prove that an unfair practice harms the entire industry to sue. 
  • Two other proposed rules would focus on safeguarding producers' legal rights by more clearly outlining what criteria the USDA considers to be clear violations of the law and by protecting farmers from retaliation if they speak out against deceptive terms or inadequate pay.

Dive Insight:

This will likely be one of the last major changes involving the food, beverage and agricultural industries that the Obama administration enacts before leaving office. However, it was not the first attempt to institute these rights for livestock and poultry producers.

The current administration first suggested similar rules in 2010, but lawmakers blocked funds to carry them out. Last year's spending bill lifted that ban, giving the USDA the funds it needed to implement and enforce these rules in the final hour.

In its news release, the USDA positioned the rules as the Obama administration's "efforts to level the playing field for all Americans." That statement calls to mind the sentiment that President-elect Donald Trump rode throughout his ultimately successful campaign. It's unclear whether the new administration will maintain these rules, change them or do away with them entirely once the new president and Cabinet take office.

These farmers' meat-packing customers have battled these types of rules, calling them "overregulation." Industry groups say that direct contracts formed between many farmers and meat or poultry processors could now be considered discriminatory under the new rules.

However, critics of the old way claim that it "ranks producers against each other, gives poultry companies too much control over the quality of the feed farmers use, the birds they produce and the pay they receive," according to The Wall Street Journal.

Filed Under: Policy Meat / Protein