Among the 72 wide-ranging initiatives in the executive order, Promoting Competition in the American Economy, are orders to the US Department of Agriculture to alleviate unfair practices that Biden said are holding back small and first-time farmers and entrepreneurs, and which the White House said will address food system weaknesses exposed during the pandemic.
“What we’ve seen over the past few decades is less competition and more concentration that holds our economy back. We see it in big agriculture, in big tech, in big pharma,” Biden said.
For example, in agriculture, the White House explained in the past few decades the “markets for seeds, equipment, feed and fertilizer are now dominated by just a few large companies, meaning family farmers and ranchers now have to pay more for these inputs.”
It added consolidation “also limits farmers’ and ranchers’ options for selling their products,” which means “they get less when they sell their produce and meat – even as prices rise at the grocery store.”
Biden said these actions are “putting a squeeze on farmers. Small and family farms, first-time farmers – like veterans coming home and Black and Latino and Indigenous farmers – they’re seeing price hikes for seed, lopsided contracts, shrinking profits and growing debt.”
With an eye towards leveling the playing field for farmers, ranchers and “helping entrepreneurs and small businesses get in the game,” as well as “helping families save money every month,” Biden called on USDA to revitalize the Packers and Stockyards Act to help combat non-competitive abuses, refine “Produce of USA” labeling rules for meat, empower farmers to repair their own equipment, and support alternative food distribution systems.
Strengthening the Packers and Stockyards Act
Complaining that the Packers and Stockyards Act “was systematically weakened by the Trump Administration Depart of Agriculture,” the White House explains in a fact sheet about the executive order that USDA is tasked with making it easier for farmers to bring and win claims, stopping chicken processors from “exploiting and underpaying chicken farmers,” and empowering farmers to speak out about bad practices without fear of retaliation.
USDA will undertake this through three rulemakings, the first of which it says will clarify violations of the act. The second will address oppressive practices in chicken processing, and the third will “reinforce the longstanding USDA position that it is not necessary to demonstrate harm or likely harm to competition in order to establish a violation of the Act,” the agency said in a same day announcement.
Increasing competition and capacity in the meat and poultry processing markets
The executive order also directs USDA to enhance competition in the meat processing industry by amending when meat can be labeled as “Product of USA” so that consumers can more easily support American ranchers if they choose.
USDA will further cultivate competition in the meat and poultry industries by committing $500m of the agency’s Build Back Better Initiative funding from the American Rescue Plan to encourage new competitive entrants in the meat and poultry processing industry with grants, loans and technical assistance.
The agency also will direct more than $150m to existing small and very small processing facilities to help them stay in the market and expand capacity even in the face of pandemic-related challenges. For example, USDA will dedicate $100m to alleviate inspection fees for small and very small poultry, meat and egg process plants, which in turn will give farmers more local alternatives and greater processing capacity.
These changes also should alleviate some of the bottlenecking and supply chain constraints experienced during the pandemic from happening again should another crisis strike.
“One of the lessons from the COVID-19 pandemic is that this system is too rigid and too fragile. When COVID slowed or shuttered meat processing, many farmers had no place to go. Farmers were forced to depopulate their animals, while grocery store shelves went bare and demand for food assistance spiked,” USAD said.
While these challenges are not new, the agency appears optimistic that supporting alternative food distribution systems will alleviate them going forward.
Building on this idea, the executive order also directs USDA to increase farmers’ access to markets and develop standards and labels that empower consumers to choose products that treat farmers fairly.