The untold story of how the administration tried to stand up to big agricultural companies on behalf of independent farmers, and lost.
During the course of the hearings, the USDA also began to address Congress’s 2008 Farm Bill instruction that the department revise and update elements of the Packers and Stockyards Act. By midsummer, the USDA had rolled out a series of far-reaching revisions, addressing many of the farmers’ concerns. One of the proposed changes would have specifically banned company retaliation against farmers who tried to negotiate the terms of a contract. Another would have required any company that forced farmers to make capital investments to offer contracts long enough for the farmers to recoup some minimum amount of that investment. This series of proposed updates and revisions to the Packers and Stockyards Act later came to be known collectively as the “GIPSA rules.”
While updating an old law might not sound like a big deal, farmers widely regarded the proposed GIPSA rules as serious game changers. “Before, they would throw us a little bone once in a while,” Watts said. “But with these rules we knew they meant business.”
Because the USDA has the legal authority to revise the rules under the Packers and Stockyards Act, Congress didn’t actually have to formally vote on the new rules. Congress has the right to discuss them and request additional information, but it has no direct authority over them. In the Senate, Tom Harkin, Chuck Grassley, and Tim Johnson, longtime advocates of reform in the agriculture industry, voiced their support for the proposed updates. Many House members, however, began to attack the rules, especially once the processing companies came out strongly against them.
In July 2010, less than a month after the USDA published its proposed rules, the House Agriculture Committee, which was led by
Michigan Minnesota Democrat Collin Peterson, called a hearing to question USDA officials on the revisions. At the hearing a group of mostly Republican lawmakers, joined by Jim Costa of California and a few other Democrats, assailed the proposed rules for their wide-reaching impact. They accused the USDA of ignoring the concerns of industry groups like the National Cattlemen’s Beef Association and the National Chicken Council, which represent processing companies like Cargill and Tyson. After the House hearing, the USDA agreed to extend the period for public comments on the proposed rules from the regular sixty days to a total of 150.
Then, in October, House members—led by Peterson, Agriculture Committee Ranking Member Frank Lucas (Republican from Oklahoma) and Livestock, Dairy, and Poultry Subcommittee Chairman David Scott (Democrat from Georgia) and Ranking Member Randy Neugebauer (Republican from Texas)—delivered a letter to Vilsack. The letter argued that the USDA, despite nationwide hearings and dozens of investigations, interviews, and fact-finding missions, had not sufficiently justified the need for some of the new farmer protections, and urged the agency to subject the rules to more thorough economic analysis. The letter was signed by sixty-eight
Republicans and forty-seven Democrats.
In the November 2010 midterm elections, a surge of successful Tea Party candidates handed Republicans control of the House. In the aftermath of the election, the administration continued its reform efforts. If anything, by the last of the five hearings in December the tone of the reformers had become more radical, centering on the political and moral nature of what many American farmers now suffer. “We’ve got to be looking at power,” explained Bert Foer, head of the American Antitrust Institute, at the hearing. “We’ve got to be looking at the negotiating realities that occur in the marketplace and not simply what the effect on the consumer price is going to be.”
But in the new year, a new political reality set in. In January 2011, Obama appointed Bill Daley, former commerce secretary and top executive at JPMorgan Chase, as his chief of staff. Part of a wider post-election shake-up at the White House, Daley’s appointment signaled that the administration was now intent on compromising with Republicans, especially on economic issues. Many Republicans, though, viewed the election as a mandate for even more radical obstruction.
In February 2011, the House Agriculture Committee again pushed Vilsack on the economic analysis of the proposed Packers and Stockyards rules, and over the next few months various subcommittees orchestrated hearings for trade groups to voice their objections. According to one industry report, paid for by the National Meat Association, the proposed USDA rules would levy a $1.64, billion blow to the meat industry and lead to 22,800 job losses. The report also claimed that the rules would, over time, decrease beef, pork, and poultry production across the board.
In May 2011, Costa, the Californian Democrat, Reid Ribble, a House Republican from Wisconsin, and Lucas, now the chairman of the Agriculture Committee, circulated a letter asking Vilsack to withdraw all proposed rule changes entirely. “[W]e are confident that any such rule will not be looked upon favorably by Congress,” the congressmen wrote. Though their letter was signed by 147 members—more than a third of the House, including twenty-five Democrats and thirty Tea Party Republicans—the USDA didn’t accede to the request. But officials did begin to water down the proposed rules.
The next month, in June 2011, the House Appropriations Committee included a crucial rider in its funding bill. The rider was designed to strip the USDA of the funds it needed to finalize and implement the strongest of the proposed rules. Farmers and activists tried to fight the rider, which was backed by corporate livestock and poultry lobbies. Advocacy groups flew in farmers from around the country to meet with members of Congress, and 6,000 people called in to the White House to express their support. During a debate over the rider, Ohio Democrat Marcy Kaptur, the only representative to come out strongly in favor of the rules, slammed the House for “standing with the few big meatpackers and against the many thousands and thousands of producers.” Even the American Farm Bureau, a group that often champions policies favorable to agribusiness, wrote an open letter to Congress opposing the rider.
But the farmers and activists found that they were now largely alone. By late 2011, the administration was in full retreat. “The White House and USDA became very timid and really didn’t do much to disabuse the critics spreading untruths about the reforms,” said Patrick Woodall, research director with Food & Water Watch, which organized some of the efforts in support of the proposed rules. “They all fell silent.”
The Senate supported the Packers and Stockyards revisions in its appropriations bill in September 2011. But the House, as Woodall put it, “went on a full-out offensive,” holding hostage everything from food stamps to food-safety measures. “Nobody wants to have to defend a policy position where the victims are low-income kids, and that’s where the balance ultimately was,” Woodall said. Even Senators Harkin and Johnson, who only a month earlier had strongly voiced their support for the GIPSA rules, backed down.
By November 2011, it was clear that the reformers had lost. The rider had passed. The rules as they had been intended were dead. The most ambitious, far-reaching campaign to reform the agricultural industry in forty years was over, less than two years after it had begun.
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