President Biden today signed an executive order to shore up protections for farmers, directing the U.S. Department of Agriculture (USDA) to issue new rules aimed at ending the exploitation of livestock farmers by corporate giants such as Tyson Foods and to increase opportunities for farmers to access markets at fair prices and reach consumers through farmers markets and other alternative retail channels. The order also directs the USDA to develop standards and labels that allow consumers to shop their values to support fair prices and working conditions for farmers and farmworkers.
Tyson Foods and other major corporations have grown and vertically integrated to control almost every part of the broiler chicken supply chain. But raising broiler chickens to maturity is contracted to independent farmers, with more than 97% of broiler farmers operating though contracts with corporate integrators, according to recent data. These farmers are paid through a tournament system in which their performance – and pay – is evaluated against other farmers who have contracts with the same integrator, pitting them against each other for the highest pay.
Contract broiler farmers have called the tournament system unfair and exploitative, alleging that pricing practices by corporate integrators such as Tyson violate federal law under the Packers and Stockyards Act. For too long these practices have gone unregulated. To make matters worse, the Trump administration reversed Obama-era regulations intended to protect farmers by stripping the Grain Inspection, Packers and Stockyards Administration, the federal agency charged with providing oversight of the meat industry, of virtually all its authority. This executive order and subsequent USDA rulemaking will provide important protections for livestock producers.
Below is a statement by Rebecca Boehm, Union of Concerned Scientists’ Food and Environment program economist.
“Competition is good for businesses and it’s good for consumers. Which is why the federal government has a critical role to play in ensuring our agricultural markets are competitive and fair for farmers, ranchers, workers and consumers. Prioritizing fair, competitive markets is government at its best. We encourage USDA to act swiftly to develop the rules and policies called for in the executive order.
“We’ve lost 40 percent of U.S. broiler farms over the last few decades, while Tyson and other major processing companies have consolidated and grown ever larger. In 2021, just four companies – Tyson Foods, Pilgrim’s Pride, Perdue Foods and Sanderson Farms – account for 61% of all chicken processing revenues. These new rules will give livestock farmers and ranchers more bargaining power in markets with corporate giants and protect them from retaliation for speaking out against abuse and exploitation.
“Meanwhile, the U.S. has lost half of its midsize farms over the same period to consolidation. Increasing midsize farmers’ access to local markets – and giving consumers the information they need to shop their values through clear standards and labeling – could create new opportunities for midsize farms.”