National Campaign for Sustainable Agriculture

Calls Needed to the Senate to Restore Healthy
Competition, Markets and Rural Communities!

An alert from the National Campaign's Competition Committee

The Senate Agriculture Committee is expected to take up its version of the 2008 Farm Bill on October 23, 2007. Senator Harkin, Chairman of the Senate Agriculture Committee has proposed to include in the Farm Bill a Livestock Title with provisions intended to restore a measure of competition and contract fairness to livestock and poultry markets. Harkin’s Livestock Title includes contract fairness provisions to ensure a producer's collective bargaining rights; a prohibition on mandatory arbitration provisions; and a good cause requirement for premature cancellation of a contract. There are also some reforms to the Packers and Stockyards Act around undue pricing preferences, coverage of poultry and standards of proof for anti-competitive injury. CALLS ARE NEEDED TODAY TO URGE YOUR SENATORS TO SUPPORT THE HARKIN LIVESTOCK TITLE.

Two other bills aimed at prohibiting packers from using "captive supplies" to manipulate cash market prices are equally essential to ensuring open and competitive livestock markets. S 1017, the Captive Supply Reform Act introduced by Senators Enzi and Dorgan would require all forward contracts to include a firm base price established on the day the contract is entered into. S 305 is a bill to amend the Packers and Stockyards Act of 1921 to make it unlawful for a packer to own, feed, or control livestock intended for slaughter. S 305 also called the “Packer Ban” was introduced by Senators Grassley, Dorgan, Enzi and Harkin.

These two bills may be introduced as amendments in the Senate Agriculture Committee or on the Senate floor. PLEASE URGE YOUR SENATORS TO SUPPORT THE CAPTIVE SUPPLY REFORM ACT AND THE PACKER BAN.

The Farm Bill passed out of the House Agriculture Committee does nothing to restore open and competitive livestock markets. The Senate is our best hope. PLEASE CALL TODAY

The message is simple: “I am a constituent and I am calling to ask Senator ______ to support Chairman Harkin’s Livestock Title. We need to provide contract fairness and competitive and open markets for our livestock producers. I also want to urge the Senator to support the Captive Supply Reform Act and the Packer Ban. Thank you. ”

This is easy! Just call (202) 224-3121 and ask for your Senator’s office. Once transferred ask to speak the Senator’s agricultural legislative aide. If the legislative aide is unavailable leave a brief message on their voice mail or with the receptionist making the above points. Be sure to leave your name and phone number

Background:

Competition Provisions

INCREASE FAIRNESS IN AGRICULTURAL CONTRACTS AND MARKETS – Below are provisions in Senator Harkin’s Proposed Livestock Title. Current abuses contained in processor-drafted agricultural contracts allow for manipulation of the producer.

1. Fairness Standards for Agricultural Contracts:

Minimum standards must be set for contract fairness in agriculture including - prohibition of binding arbitration in contracts of adhesion, protections for producers from having their contracts prematurely terminated if they have made a sizable capital investment, a 3 day right to review a contract before final decision, and prohibition of requiring additional investments unless they are offset by additional considerations by the company.

2. Closing Poultry Loopholes in P&SA:

Poultry loopholes in the P&SA should be closed to provide the Packers and Stockyards Administration with the necessary enforcement authority over all poultry cases. This is necessary to bring poultry in line with other livestock within the P&SA. Despite evidence of the contract being used as a tool to intimidate, retaliate, and reduce growers profits to poverty levels, the Grain Inspection Packers and Stockyards Administration does not currently have the authority to take administrative action and protect growers by halting unfair practices or penalizing poultry companies that violate the law.

3. Bargaining Rights for Farmers:

Amend Agricultural Fair Practices Act of 1967 to require companies to bargain in good faith with bargaining associations, and allow farmers to join associations without fear of retaliation by processors.

LIMIT PACKER CONTROL/MANIPULATION OF LIVESTOCK MARKETS - These provisions would address a significant problem of captive supply—which packers use to manipulate markets.

4. Captive Supply Reform Act (S. 1017):

Currently, formula contracts and marketing agreements are negotiated in secret. These formula contracts and agreements depress prices and shut small and independent producers out of markets when packers base the price they pay for contracted cattle on a cash market they can manipulate. The Captive Supply Reform Act would require that packers offer contracts with a .rm base price and offer them in an open public manner.

5. Prohibition on Packer-Owned Livestock (S. 305):

Meat packers use packer-owned livestock as a tool for exerting unfair market power over farmers and ranchers. This practice fosters industrial livestock production and freezes independent farmers out of the markets, lowering farm gate prices to farmers and ranchers while consumer food prices continue to rise.