Co-authored with Tori Oto, Summer Legal Fellow
Over decades, lax antitrust enforcement has exacerbated consolidation, which has left control of the vast majority of our food system in the hands of very few, increasingly powerful companies. The environment, local economies, and public health all suffer as a result.
Two very recent actions signal that the tides may be turning. Finally, our nation's leaders seem ready to deliver meaningful protections for small- and mid-sized- farmers, farmers of color, and food system workers―especially those in the meat and poultry sectors.
First, President Biden issued a sweeping Executive Order (EO) to promote competition throughout the U.S. economy. Among the issues tackled, the EO directs the U.S. Department of Agriculture (USDA) to consider new rules under the Packers and Stockyards Act (PSA) to promote fair competition in the meat sector and make it “easier for farmers to bring and win claims.” A meaningful PSA update could help U.S. poultry and livestock producers shift away from harmful concentrated animal feeding operations (CAFOs) and towards smaller-scale, more diversified and pasture-based modes of farming. It also directs the USDA to explore unfair competition in other parts of the food system that squeezes farmers and farm workers alike, namely consolidation in the seed and input (pesticide, fertilizer) industries, as well as in the retail sector.
Senator Cory Booker and Representative Rho Khanna have also reintroduced the Farm System Reform Act, which would strengthen pro-competition measures in the PSA. It includes several other measures as well that support a transition away from harmful, industrial animal agriculture, such as a moratorium on new CAFOs as well as resources for CAFO operators who want to transition to new professions.
These measures―and more―are urgently needed, as meatpacking companies are decreasing in number and increasing in size: the four largest meatpackers control more than 80% of the U.S. beef market, the top four pork processors control two-thirds of pork production, and the four largest poultry companies control more than half of poultry processing.
The COVID-19 crisis highlighted how consolidation has added to the vulnerability of our food system, particularly in the meat sector, and exacerbated its racial and economic inequities. As meat plant shutdowns temporarily emptied grocery store shelves, retail meat prices soared. Meanwhile, major meatpacking corporations profited from price hikes, benefitted from a surge in meat exports, and dodged responsibility for keeping vulnerable slaughterhouse workers safe.
At this point, the dominance of the major meatpacking corporations is largely self-perpetuating. The prices that integrators pay to ranchers for their cattle is stagnant, even as retail beef prices paid by consumers have risen and stayed high. Producers often feel trapped in the existing industrial or CAFO model, controlled by these same companies. That model forces producers, workers, and neighboring communities to shoulder the health and environmental fallout from cost-cutting measures, such as low wages, unsafe working conditions, cleanup of polluted air and waterways, and the sickness to which this pollution contributes. The low payments promised to these producers leave them with little choice. Meanwhile, the dominant corporations continue to enjoy the lion's share of the profits, using their outsized market control and power both to protect their unfair profit margins and to shut out small- and mid-sized producers, making it harder for the latter to survive.
Action to break this downward spiral of exploitation in the meat sector, and level the playing field, is long overdue. Over a decade ago, the Obama administration held listening sessions across the country. Taking on significant personal risks, meat producers opened up then about the ongoing injustice they experience. However, the administration’s failure to follow through left these producers vulnerable and their complaints unaddressed. The Trump administration subsequently made matters worse.
The Biden administration now appears ready to follow through with needed reforms, as does bipartisan leadership in Congress―in fact, numerous members of Congress now champion small-scale, diversified agriculture. With strong new USDA leadership and Lina Khan leading the Federal Trade Commission, there’s good reason to be optimistic.
NRDC will continue to stand with organizations calling for a fair, equitable, and climate-friendly food system, and hold the Biden administration accountable to its commitments.