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.

Monday, February 19, 2007

Harkin Bill Calls for Competition in Ag Markets

Senator Tom Harkin (D-IA) this week introduced legislation to correct deficiencies in USDA’s enforcement over agricultural markets and provide needed protections for producers involved in production contracts for agricultural commodities. The Competitive and Fair Agricultural Markets Act will be the basis for the development of a proposed competition title in the upcoming farm bill. Harkin is Chairman of the Senate Committee on Agriculture, Nutrition and Forestry.

“Producers need to have a fighting chance in an industry that is becoming far too consolidated and vertically integrated,” Harkin said. “I will propose and seek to include this legislation as part of a competition title in the farm bill.”

Last year, USDA’s Inspector General released a report commissioned by Harkin that detailed widespread inaction, the blocking of anti-competitive investigations, and efforts to cover up the lack of action by the Grain Inspection, Packers and Stockyards Administration (GIPSA). A hearing Harkin called to evaluate GIPSA’s enforcement dysfunctions also uncovered the lack of commitment towards preventing anti-competitive practices by USDA’s Office of General Counsel.

“If you take these facts together, it represents a complete lack of enforcement of the Packers and Stockyards Act passed by Congress in 1921, to protect producers from unfair, deceptive and anti-competitive practices in the marketplace,” Harkin said. “If we want to get serious about getting young people into agriculture, creating a fair and evenhanded marketplace is an obvious place to start.”

The Competitive and Fair Agricultural Markets Act would:

Reorganize USDA to streamline and improve enforcement of the Packers and Stockyards Act and Agricultural Fair Practices Act by establishing an Office of Special Counsel whose sole responsibility will be to investigate and prosecute violations on competition matters. The Special Counsel would be appointed by the President and confirmed by the Senate. This position will also serve as a liaison between the Department of Justice and Federal Trade Commission.

The legislation also amends the Packers and Stockyards Act:

Strengthens producer protections by making it easier for them to prove unfair actions by firms without additional burdens of having to prove adverse effects on competition across a region or sector and requires USDA to define the term "undue preference" - disallowing price premiums that are based solely on volume, or number of head, thereby discriminating agains smaller producers.

The bill also makes changes to the Agricultural Fair Practices Act...
...prohibiting unfair, unjustly discriminatory, anti-competitive or deceptive practices by a person that affects the marketing, receiving, purchasing, sale or contracting of crops... and provides needed contract protections to ensure that the production contract clearly spells out what is required of the producer... and prevents discrimination against producers belonging to an organization or cooperative...

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