More Work Ahead to Balance the Power in Food & Ag

Our food and farming system is at a breaking point. Decades of weak enforcement of laws designed to promote fairness, paired with public investments that skew markets toward large-scale industrial agriculture, have allowed a handful of companies to dominate the food chain—at the expense of health, economic resilience, fair markets, and environmental protection. President Biden has signaled a willingness to pursue reforms, including investments in regional food systems and new rules under the Packers and Stockyards Act that promote fairness in the meat sector. To bring about meaningful and lasting change, the administration must follow through on its promises with actions match that the magnitude of the problem.

Few Companies Shape Food and Agriculture Policy

A handful of companies dominate most of the food system, from farm inputs to grocery stores, and the meatpacking sector is among the most egregious. The top four companies in each meat sector control the vast majority of market share: 85% of beef, 71% of pork, and 53% of poultry.

This concentration exists, at least in part, because major food companies use their outsized economic and political power to dominate markets and shape public policy. Their financial and political power helps explain why small businesses and rural communities struggle to survive, why toxic substances and extreme pollution remain prevalent in our food supply, and why economic disparities continue to worsen. With minimal oversight and the ability to outspend opposition, the big continue to get bigger.

Biden-Harris Administration Promises Fair Meat

President Biden set the stage for change with a groundbreaking Executive Order calling for measures to promote competition, and he recently followed up with a promising agenda that could restore balance in the meat and poultry sectors, including stepped up enforcement, rulemakings under the Packers and Stockyards Act, and investments in smaller, regional-scale meat processing.

USDA also recently announced two grant opportunities that recognize food system stakeholders who have not received a fair share of public support—both during the COVID-19 crisis and more broadly in food and agriculture policy. The $700 million Farm and Food Workers Relief Grant Program  will provide up to $600 to essential farm, meatpacking, and grocery workers who endured significant risks to keep food on tables throughout the pandemic, often without adequate health protections and compensation. The $650 million Pandemic Response and Safety Grant Program will reimburse small food and farming businesses for various costs incurred during the pandemic.

While laudable, these programs are a drop in the bucket when compared with the duration and magnitude of inequities in the food and agriculture marketplace. For example, the top 1% of farms alone got more than 20% of the first round of USDA Coronavirus Food Assistance Program (CFAP) payments last year—totaling $1.2 billion; the top 10% of recipients received average payments of nearly $95,000 while the bottom 10% averaged only about $300. The racial inequities are also stark: by October 2020, white farmers had received nearly 97% of the $9.2 billion that had been distributed through CFAP. Throughout the pandemic, many farm and food system workers deemed “essential” continued to toil in unsafe conditions, with little recognition or fair compensation. It’s a snapshot of a pattern that has played on repeat for decades.

That’s why strong regulations and enforcement actions that decrease the economic power and influence of the largest players will also be critical to advancing fairness.

The Power of the Packers & Stockyards Act

The Packers and Stockyards Act (PSA), in particular, presents an opportunity for this administration to affirm that large, consolidated meat packers cannot profit by forcing producers and the public to shoulder the costs of harmful practices.

Lack of competition in the meat sector is not a new problem, and it’s one that leaders have attempted to solve before. Adopted in 1921 in response to extreme consolidation and exploitation in the meat industry, the PSA is intended to protect farmers, ranchers, and the public from large agricultural corporations. However, enforcement in recent decades has been inadequate, and the Trump administration gutted the key oversight agency.

With lax oversight, the dominant meat packers have used their outsized power to squeeze the incomes of producers and workers, keep smaller-scale organic and regenerative producers out of the market, and force communities and the public to shoulder the environmental costs of industrial meat production—including its hefty greenhouse gas footprint and climate vulnerabilities.

The law prohibits packers from using “unfair” practices, which leaves significant leeway for USDA to reign in harmful behavior. USDA’s PSA actions this fall should include a rule clarifying that it is unfair, and therefore illegal under the PSA, for a packer to profit by setting wholesale prices so low that suppliers must cut corners and externalize costs.  

The Obama administration promised—but did not ultimately deliver—significant action on consolidation in the food system. USDA, again under Secretary Vilsack’s leadership, now has a chance to follow through. At this pivotal moment in the fight for climate justice, it’s more important than ever to reign in companies that are harming workers, rural communities, and our environment. We look forward to working with this administration to implement a healthy, equitable, and climate-friendly vision for our food system.