On July 9, President Joe Biden signed an executive order that could potentially help farmers and ranchers level the playing field with packers and processors.
Following the signing of the order U.S. Secretary of Agriculture, Tom Vilsack announced what an important day it was during a press conference at Rustic Cuts Butcher Shop in Council Bluffs, Iowa. Iowa Congresswoman Cindy Axne joined Vilsack for the announcement.
Specifically, the U.S. Department of Agriculture announced its intent to invest $500 million in American Rescue Plan funds to expand meat and poultry processing capacity so that farmers, ranchers and consumers have more choices in the marketplace. USDA also announced more than $150 million for existing small and very small processing facilities to help them weather COVID, compete in the marketplace and get the support they need to reach more customers. USDA is also holding meatpackers accountable by revitalizing the Packers and Stockyards Act, issuing new rules on “Product of USA” labels, and developing plans to expand farmers’ access to new markets.
“This is designed to provide an opportunity to maintain resiliency we have in facilities like this one,” Vilsack said. “We’ve got to expand the amount of capacity and processing capacity in this country. We can no longer rely on a handful of processing companies to do the job to make the market competitive, to do right by farmers to ensure, as well, that we have a resilient food system.”
The assistance will be made available in grants, loans, guaranteed loans and assistance for planning and organizing that goes into figuring out how to build processing facilities, capacities and assets. Vilsack hopes over the next few months to be able to listen to folks in the business to gather necessary information on how to structure the assistance funds.
“We’re focused on beef, pork and poultry,” he said. “Our belief is that there’s a great demand for the grant money, loan money, guarantee loan and any assistance we can provide.”
He hopes this will allow Axne to convince her colleagues to provide a more permanent structure for funding this kind of activity.
Vilsack hopes these moves will create a more competitive market, allowing there to be greater price discovery.
“We’ll get a true sense of what the market is,” he said. “It’ll shorten the distance that food has to travel from the farm to my table, thereby reducing the greenhouse gas emissions connected to the food supply, which is incredible.
This should create a much more resilient, locally driven food system that would be able to withstand future disruptions, like the one that happened with the pandemic.
“It’s been something that I brought up in the Agriculture Committee. It’s been something that I’ve talked to our caucus about, especially as it came to light with the big packing plants in the supply chain disruption,” Axne said.
Many producers are at a crossroads, a “make or break” point according to Axne, and when it comes to supporting rural communities across the country, this executive order and bill helps address the needs of cattle producers.
“What this does is lay some stability for a lot of markets, certainly our feed market,” she said. “This gives us a little bit more stability and know what’s happening right here in Iowa, it certainly helps our rural communities.”
Order specifics
The signing of the executive order is expected to promote competition in the American economy, which could lower prices for families, potentially increase wages for workers, and promote innovation and even faster economic growth.
For many years consolidation at the corporate level has been increasing and in the majority of U.S. industries, larger companies now control more of the business than it did 20 years ago. Industries include health care, financial services, agriculture and more. This lack of competition drives up consumer prices, and families end up paying more for things like prescription drugs, hearing aids and internet services. According to the White House, in total, higher prices and lower wages caused by lack of competition are now estimated to cost the median American household $5,000 per year.
The order includes 72 initiatives by more than a dozen federal agencies to promptly tackle some of the most pressing competition problems across our economy. Once implemented, these initiatives will result in concrete improvements to people’s lives.
The White House believes it will do the following:
• Make it easier to change jobs and help raise wages by banning or limiting non-compete agreements and unnecessary, cumbersome occupational licensing requirements that impede economic mobility.
• Lower prescription drug prices by supporting state and tribal programs that will import safe and cheaper drugs from Canada.
• Save Americans with hearing loss thousands of dollars by allowing hearing aids to be sold over the counter at drug stores.
• Save Americans money on their internet bills by banning excessive early termination fees, requiring clear disclosure of plan costs to facilitate comparison shopping, and ending landlord exclusivity arrangements that stick tenants with only a single internet option.
• Make it easier for people to get refunds from airlines and to comparison shop for flights by requiring clear upfront disclosure of add-on fees.
• Make it easier and cheaper to repair items you own by limiting manufacturers from barring self-repairs or third-party repairs of their products.
• Make it easier and cheaper to switch banks by requiring banks to allow customers to take their financial transaction data with them to a competitor.
• Empower family farmers and increase their incomes by strengthening the Department of Agriculture’s tools to stop the abusive practices of some meat processors.
• Increase opportunities for small businesses by directing all federal agencies to promote greater competition through their procurement and spending decisions.
The order also encourages the leading antitrust agencies to focus enforcement efforts on problems in key markets and coordinates other agencies’ ongoing response to corporate consolidation. Additionally, the order includes the following:
• Calls on the leading antitrust agencies, the Department of Justice and Federal Trade Commission, to enforce the antitrust laws vigorously and recognizes that the law allows them to challenge prior bad mergers that past Administrations did not previously challenge.
• Announces a policy that enforcement should focus in particular on labor markets, agricultural markets, healthcare markets (which includes prescription drugs, hospital consolidation, and insurance), and the tech sector.
• Establishes a White House Competition Council, led by the director of the National Economic Council, to monitor progress on finalizing the initiatives in the order and to coordinate the federal government’s response to the rising power of large corporations in the economy.
Kylene Scott can be reached at 620-227-1804 or [email protected].
