New rules to protect animal farmers expected soon

The Biden administration plans to issue a new rule to protect the rights of farmers who raise cows, chickens and hogs against the country's largest meat processors as part of a plan to encourage more competition in the agriculture sector.

The new rule that will make it easier for farmers to sue companies they contract with over unfair, discriminatory or deceptive practices is one of several steps that the White House plans to announce in the next few days.

The U.S. Department of Agriculture also is expected to tighten the definition of what it means for meat to be labeled a “product of USA” to exclude when animals are raised in other countries and simply processed in the United States.

Some farmer advocacy groups have pressed for these changes for several years but Congress and the meat processing industry have resisted them.

A USDA official familiar with the White House’s plan said an executive order is expected to be announced this week that will clear the way for the new rules.

The regulation will make it easier for farmers to bring complaints under the Packers and Stockyards Act and is similar to one the Trump administration killed four years ago.

That rule was first proposed in 2010.

Several court rulings have interpreted federal law as saying a farmer must prove a company’s actions harm competition in the entire industry before a lawsuit can move forward. The new rule would ease that high burden of proof.

Chicken and pork producers, for example, often must enter long-term contracts with companies such as Tyson Foods and Pilgrim’s Pride that farmers say lock them into deals that fix their compensation at unprofitably low levels and force them deep into debt.

Major meat companies have defended the system as fair. It calls for farmers to provide barns and labor to raise chickens while the companies provide chicks, feed and expertise.

The North American Meat Institute, which represents meat processors, said the proposed rule would likely encourage “costly, specious lawsuits.”

But Bill Bullard, who leads a trade group representing farmers and ranchers, said the change should better protect individuals in their dealings with the four major meat companies, which together control roughly 70 percent of U.S. beef production.

The Agriculture Department also plans to invest in new local and regional markets, so farmers will have more options for selling the animals and crops they raise.

Critics have said the major meat processing companies dominate the market for cattle, hogs and chickens, which makes it harder for small farmers to get a fair price.

A source familiar with the executive order said it also will encourage the Federal Trade Commission to limit the ability of agricultural equipment manufacturers to force farmers to have their equipment repaired at dealers instead of using independent repair shops or doing repairs themselves.

Some tractor makers use proprietary tools and software to force farmers to go to dealers for repairs.