Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to johnc@cfra.org.

Friday, February 17, 2006

Competitive Agricultural Markets Act of 2006

The Competitive and Fair Agricultural Markets Act of 2006

Introduced by Senator Harkin (D-IA), Senator Enzi (R-WY) and Senator Thomas (R-WY)

Includes the following provisions:

§ Reorganize USDA to establish an Office of Special Counsel whose sole responsibility will be to investigate and prosecute violations on competition matters. Currently, the Deputy Administrator at GIPSA oversees the Packers and Stockyards program and has the responsibility of enforcing the Packers and Stockyards Act. The Special Counsel would be appointed by the President and confirmed by the Senate.

Make the following amendments to the Packers and Stockyards Act:

§ Strengthen USDA’s authority in enforcing the Packers and Stockyards Act by requiring USDA to promulgate rules that define “undue price preferences” that are prohibited under the Packers and Stockyards Act. Meatpackers routinely provide undue price preferences to large volume producers that far exceed any differential costs in procuring livestock, and discriminate against small and mid sized producers who can provide the same or better quality and meet similar procurement standards.
§ Strengthen Producer Protections by making it easier for them to prove unfair actions by packers without additional burdens of having to prove adverse affects on competition. For example, recent court decisions such as London vs. Fieldale Farms have ruled that in order for producers to succeed in cases involving unfair actions they must prove how it adversely affects competition for their region. These rulings will now complicate USDA’s ability to enforce the Packers and Stockyards Act.
§ Strengthen USDA’s authority in enforcing the Packers and Stockyards Act over the poultry industry and make it more in line with livestock. Currently, it is illegal for poultry integrators to engage in unfair or anti-competitive practices, but the enforcement section of the law to prosecute violations was left out many years ago.

Make the following changes to the Agricultural Fair Practices Act:

§ Prohibits unfair or deceptive practices by a person that affects the marketing, receiving, purchasing, sale or contracting of agricultural commodities.
§ Provides needed contract protections to ensure that the contract clearly spells out what is required of the producer. Harkin’s bill would require giving the producer at least 3 days to review or cancel the contract. Harkin’s bill would prevent confidentiality clauses so that producers are free to share the contract with family members or a lawyer to help them decide whether or not they should sign it. The legislation would also protect producers from having their contracts prematurely terminated if they have made a sizable capital investment. The bill also prevents mandatory arbitration so that producers are not prevented from going to the courts to speak out against unfair actions by companies.
§ Prevent discrimination against producers belonging to an organization or cooperative.

For more information on competition issues see – http://www.cfra.org/pdf/CommStaffConcentrationPaper.pdf

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

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