Sen. Chuck Grassley today said the federal government should foster a more competitive market for independent livestock producers by prohibiting meat packers from owning, feeding or keeping livestock for slaughter.
Four farm state lawmakers, including Grassley, introduced legislation that would strengthen the Packers and Stockyards Act of 1921. Under their new proposal, packers would no longer be able to own and control livestock prior to purchase for slaughter. The bipartisan measure provides exceptions for farmers and ranchers who own and process livestock in producer-owned and producer-controlled cooperatives.
"The independent livestock producer doesn't have a chance of getting a decent price when a meat packer controls so much of the process," Grassley said. "The bill we've introduced today would help create more competition in the marketplace and remove the taint of monopoly from the meat packing industry."
Grassley said the Packers and Stockyards Act should ensure fair access to the slaughter house gate whether a farmers markets 50 hogs or 5,000 hogs. He said prohibiting packer ownership would decrease the likelihood of price manipulation.
The bill introduced today by Sens. Tim Johnson of South Dakota, Grassley, Bob Kerrey of Nebraska, and Craig Thomas of Wyoming would:
prohibit meat packers and individuals who directly or indirectly control, or who are controlled by, or under common control with the packer, from owning, feeding or keeping livestock for slaughter. The bill would allow packers to obtain livestock within 14 days of slaughter to maintain a reasonable supply to operate plants;
exempt cooperatives that own, feed or keep livestock for slaughter if a majority of the ownership interests in the cooperative are held by active cooperative members that raise, control, hold title to, and provide livestock to that cooperative;
exempt meat packers owned and controlled by livestock producers if the packer slaughters less than two percent of the national annual slaughter; and,
require divestiture of swine ownership interests within 18 months, and of beef and sheep within one year.
Grassley said that the federal government "needs to do its job to protect fair competition. This bill is part of an effort to level the playing field so the family farmer can defeat unfair advantages and enjoy prosperity on the farm in the next century," he said.
Earlier this week, the U.S. Senate gave final approval to an agriculture spending bill that contained legislation first promoted by Grassley and Sen. Tom Daschle of South Dakota to require meat packers to disclose the prices they pay for beef and pork. The new condition would make the information public through the USDA Agriculture Marketing Service. Grassley said this information "is critical for independent operators to stay competitive." President Clinton is expected to sign the bill that contains this legislation.