In a multi-faceted executive order released on Friday, President Joe Biden announced changes to law and an increased effort to promote competition in the American market. The order specifically addressed issues with anticompetitive activity within the meatpacking and agricultural industries.
“The American promise of a broad and sustained prosperity depends on an open and competitive economy. For workers, a competitive marketplace creates more high-quality jobs and the economic freedom to switch jobs or negotiate a higher wage. For small businesses and farmers, it creates more choices among suppliers and major buyers, leading to more take-home income, which they can reinvest in their enterprises,” the order said.
It explained that recently markets have become more consolidated, and that specifically in agriculture the consolidation has led to issues keeping small family farms alive. The Biden administration explained that action to fix the economy needs to be taken quickly, and that it intends to enforce antitrust laws and combat the concentration in multiple industries through supporting legislative reforms.
“Farmers are squeezed between concentrated market power in the agricultural input industries — seed, fertilizer, feed, and equipment suppliers — and concentrated market power in the channels for selling agricultural products. As a result, farmers’ share of the value of their agricultural products has decreased, and poultry farmers, hog farmers, cattle ranchers, and other agricultural workers struggle to retain autonomy and to make sustainable returns,” the order said.
The order asked the Secretary of Agriculture to initiate rulemaking under the Packers and Stockyards Act to strengthen related regulations, including providing clear rules, updating definitions, adopting anti-retaliation protections, and ensuring accurate and transparent labels for items produced in the US, which the USDA addressed in a press release on July 1.
In an accompanying fact sheet, the Biden administration explained that agricultural markets are becoming more concentrated, and that there is less competition. It noted that only a few large companies dominate the market for equipment, seeds, and fertilizer, specifically only four companies control most of the seeds in the world which has been a factor in the price of corn seeds rising 30% in one year. It also explained that four large meatpacking companies control 80% of the market and the price paid to farmers for beef has dropped more than a quarter despite the price consumers pay for beef rising. It accused the Trump administration of “systematically weaken(ing)” the Packers and Stockyards Act which was designed to prevent anticompetitive activities.
The USDA also announced on Friday that it is spending $500 million to address some of the same issues and help smaller farms and ranches recover from the COVID-19 pandemic. This step helps to fulfil the directions given to the agency in the executive order.
The Biden Administration also announced new regulatory changes to the pharmaceutical industry which parallel these agricultural industry changes.