By STAN MADDUX

Indiana Correspondent

WASHINGTON D.C. — The USDA is coming out with a rule livestock producers hope will offer them more protection against what they call unfair competition and pricing from processors of meat and poultry.

According to USDA, a 60-day public comment period will follow once the proposed rule providing criteria for deciding supplier complaints is released, sometime before the fall.

Joe Maxwell, executive director of Organization for Competitive Markets of Lincoln, Neb., said Congress will be asked to mandate that the rule contains specific language offering livestock producers real protections against exploitation. He said wanting Congress to intervene stems from past actions and statements on the matter by USDA Secretary Sonny Perdue that suggest he favors major processors whose profit safeguarding tactics come at the expense of farmers.

“The fate of America’s family farmers is now in the hands of Secretary Perdue. Whether he will side with large transnational corporate monopolies like JBS and Tyson or stand up for America’s independent family farmers is yet to be seen,” Maxwell said.

Livestock producers have long complained about having little recourse when pressured by processors into making substantial investments in their operations, without receiving enough in return financially. Many producers go along with the demands and don’t speak up for fear of losing out to other suppliers.

As a result, Maxwell said too many growers struggle to stay afloat or go out of business. He said it’s a major problem, made worse over the years from processors – becoming larger-scale and fewer in number – having a virtual monopoly on the supply market.

To win a complaint, he said growers now face the difficulty of proving the entire market was hurt by the retaliatory acts. “That’s too high of a hurdle,” he said.

Out of fairness, he said the rule should require that producers prove strictly harm to themselves and prohibit acts like “sweetheart deals” to suppliers to undercut or place at a disadvantage competing producers stepping out of line.

He said other market abuse often not challenged includes suppliers receiving less money for their product than what was promised or expected.

“If I’m making screws for a company and they short-pay me, I have a right under the law to sue them and get my money. There should be no difference simply because I’m a farmer or a rancher,” he said.

Maxwell is a fourth-generation hog farmer from Missouri, as well as a former state representative, state senator, and lieutenant governor.

According to the USDA, the rule will establish criteria for deciding complaints now decided on a “case-by-case basis.” The 2008 farm bill required the ag secretary to identify criteria to be used when determining whether an undue or unreasonable preference or advantage has occurred in violation of Section 202(b) of the 1921 Packers and Stockyards Act (PSA).

USDA proposed rules with possible criteria in 2010 and again in 2016, but neither produced sufficient results for a final rule, according to the agency. This time, according to USDA, the publication of a final rule is anticipated in May 2020.

Maxwell said the intent of the PSA was to protect growers from unfair competition, but it was weakened from court rulings over the years.

Anna Johnson with the Center for Rural Affairs out of Lyons, Neb., said protecting suppliers whose major investments reflect what they’re expected to produce under contract is also a major concern of her organization.

“We don’t know what’s going to be in the rule yet, but we’ll be watching for it,” she noted.