On July 9, President Biden signed an executive order to strengthen protections for farmers, ordering the USDA to enact new rules aimed at ending the exploitation of ranchers by corporate giants and increasing opportunities for farmers to access markets at fair prices and to reach consumers through farmers. markets and other alternative distribution channels.
The order also directs the USDA to develop standards and labels that allow consumers to shop to support fair prices and working conditions for farmers and farm workers.
Large companies have grown and integrated vertically to control almost every part of the broiler chicken supply chain. But rearing broilers to maturity is outsourced to independent breeders, with over 97% of broiler breeders operating through contracts with corporate integrators. These farmers are paid through a system of tournaments in which their performance – and their remuneration – is evaluated against other farmers who have contracts with the same integrator, pitting them against each other.
Contract broiler farmers called the tournament system unfair and exploitative, alleging that the pricing practices of company integrators violate federal law under the Packers and Stockyards Act . For too long, these practices have not been regulated.
This decree and subsequent USDA rules will provide important protections to livestock producers.
Competition is good for businesses and for consumers, which is why the federal government has a vital role to play in ensuring that our agricultural markets are competitive and fair for farmers, ranchers, workers and consumers.
Prioritizing fair and competitive markets is the best of government. We encourage the USDA to act quickly to develop the rules and policies called for in the executive order.
We have lost 40% of the broiler chicken farms in the United States over the past few decades as large processing companies have consolidated and grown more and more.
In 2021, just four companies – Tyson Foods, Pilgrim’s Pride, Perdue Foods and Sanderson Farms – accounted for 61% of all chicken processing revenue.
New rules will give ranchers and ranchers more bargaining power in markets with giant companies and protect them from retaliation for exposing abuse and exploitation.
Meanwhile, the United States has lost half of its mid-size farms over the same period due to consolidation. Increasing midsize farmers’ access to local markets – and giving consumers the information they need to buy their values through clear standards and labeling – could create new opportunities for midsize farms.
Rebecca Boehm is an economist at the Union of Concerned Scientists.