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USDA oversight of packers a decade-long sham
By Alan Guebert
Farm & Food File
For nearly a decade the Packers and Stockyards Administration, the USDA watchdog to ensure competitive, fair livestock markets, has been little more than a sleeping dog, according to a devastating, 36-page report released by USDA’s Office of Inspector General (OIG) on Jan. 18.

Indeed, notes the OIG in the undressing of the Grain Inspection, Packers and Stockyards Administration (www.usda.gov/oig/webdocs/30601-01-HY.pdf), P&S oversight of livestock markets and meatpackers has been so lax since 2000 that “no competition and complex investigations were being done.”

USDA’s own indictment of the one USDA agency American meat and poultry producers have daily contact with is repeatedly clear on that point: For years, Packers & Stockyards has not turned one stone to ensure U.S. livestock markets are fair nor has it found one meatpacker misstep in an industry that drips with both collusion and blood.

But the point is not new.

A similar 1997 OIG investigation recommended a wholesale overhaul of P&S structure and policies to better monitor and regulate the swiftly integrating, quickly consolidating meat industry.

Three years later, a September 2000 Government Accountability Office follow-up found a vastly restructured watchdog, but not a reinvigorated one. P&S “investigative methods,” said the GAO, still had not been “designed for addressing complex anti-competitive practice concerns” that had taken firm root in the livestock sector.

Now arrives the third P&S indictment in less than a decade. Its very first line could have been lifted from the previous two. “The Grain Inspection, Packers and Stockyards Administration has not established an adequate control structure and environment to oversee and manage its investigative activities.”

Facts contained in the OIG report make a chilling and infuriating case of P&S ignorance, incompetence and failure:

•Records on 1,799 of the 1,842 market investigations P&S said it was conducting as of June 30, 2005 were so incomplete that the OIG could “not identify the location of the work performed.”

•Most of the “investigations” were, in fact, fake, explained the OIG. “Our review of the complaints and investigations log... [reveals] all types of work performed (i.e., monitoring activities, sending routine correspondence, or performing on-site reviews) as investigations, which would inflate the number of investigations reported as completed in the agency’s annual performance report.”

•The bad records, the cooked numbers and P&S’s “weak management control” meant that “...no referrals were being made to the Office of General Counsel [USDA prosecutors] for administrative action.”

In short, this meatpacker watchdog and market regulator was nothing more than a flea-bitten shadow of what Congress envisioned when it passed the Packers and Stockyards Act of 1921. It did little but create paper, then shuffle it.

All of it led to nowhere. “OGC filed no administrative complaints against market participants for anti-competitive practices since 1999 due to lack of [P&S] referrals,” summarized the report.

And all of this as the American livestock-producing and meatpacking sectors were experiencing a tidal wave of consolidation and integration.

As revealing - and sickening - as this latest P&S report is, none of it is even mildly surprising to groups like the Organization for Competitive Markets and R-CALF. Both have screamed bloody murder about the catatonic P&S for years.

Likewise, just as predictable has been the silence of livestock groups like the National Cattlemen’s Beef Assoc. and the National Pork Producers Council since the report’s release. Neither of the packer-linked groups has even noted the existence of the OIG report. Golly, can’t one NPPC or NCBA producer-official at least acknowledge that part of their packer-partners’ success in squeezing poultry, pork and beef growers into near extinction is the result of the blind poodles at Packers & Stockyards?

Evidently not, and the silence, like the OIG report itself, is confirmation of the cronyism between USDA, agbiz, and producer groups who have linked up to all but give up the fight for fair markets, strict oversight, and a strong, independent agriculture.

Shame on P&S, who, again, has been caught red-handed snoring away.

Shame on USDA who, again, finds more time to tout agribusiness than regulate it.

And shame, shame on farm groups who let it happen.

This farm news was published in the February 1, 2006 issue of Farm World.

2/1/2006