June 30, 2022

Biden Administration proposes changes to the Packers and Stockyards Act

Biden Administration proposes changes to the Packers and Stockyards Act

By: Sydney Sheffield 

The United States Department of Agriculture’s (USDA) Secretary Tom Vilsack announced additional support, resources, and rulings to strengthen the American food supply chain, promote fair and competitive agricultural markets, prevent abuse of farmers by poultry processors, and make prices fairer for farmers and American consumers. These actions build upon the Meat and Poultry Supply Chain Action Plan, announced by the administration earlier this year. 

“For too long, farmers and ranchers have seen the value and the opportunities they work so hard to create move away from the rural communities where they live and operate,” Vilsack said in a press release. “Under the leadership of President Biden and Vice President Harris, USDA is committed to making investments that promote competition—helping support economic systems where the wealth created in rural areas stays in rural areas—and strengthening rules and enforcement against anti-competitive practices.”

A new proposed rule was announced under the Packers and Stockyards Act to protect poultry growers from abuse. This is the first of three rulemakings to come under the Act. The new rulemaking will require poultry processors to provide key information to poultry growers at several critical steps to increase transparency and accountability in the poultry growing system. Additionally, contracts would also be required to contain guaranteed annual flock placements and density. Poultry processor CEOs would be required to sign off on the compliance process for disclosure accuracy.

In addition, USDA has opened an inquiry into whether some practices of poultry processors in the tournament system are so unfair that they should be banned or otherwise regulated. USDA seeks input from stakeholders to determine whether the current tournament-style system in poultry growing could be restricted or modernized to create a fairer, more inclusive marketplace.

Vilsack also announced that USDA is making available $200 million under the new Meat and Poultry Intermediary Lending Program (MPILP) to strengthen the food supply chain and create opportunities for small businesses and entrepreneurs in rural communities. These funds will provide financing to independent meat and poultry processors to start and expand operations. The MPILP will provide grants of up to $15 million to nonprofit lenders, including private nonprofits, cooperatives, public agencies, and tribal entities.

Twenty-five million dollars in investments for workforce training programs for meat and poultry processing workers with American Rescue Plan Act Section 1001 funding was announced. The targeted funding through new and existing National Institute of Food and Agriculture (NIFA) programs is designed to create and expand upon financially beneficial jobs that can strengthen the meatpacking industry by attracting and retaining employees.

“The funding and new rule we’re announcing today ultimately will help us give farmers and ranchers a fair shake, strengthen supply chains, and make food prices fairer,” said Vilsack.