USDA actions to address food supply chains, price challenges
Posted on Jun 02, 2022 at 20:00 PM
On May 26, the USDA announced a suite of new actions, including issuing a new Packers & Stockyards Act rulemaking, making available $200 Million to expand competition in meat processing, and investing $25 million in workforce training
Agriculture Secretary Tom Vilsack announced more support, resources, and new rules that the Biden administration says will strengthen the American food supply chain, promote fair and competitive agricultural markets, prevent abuse of farmers by poultry processors and make prices fairer for farmers and American consumers. These actions fulfill key components of the Meat and Poultry Supply Chain Action Plan launched in January. The moves also combat market dominance by a small number of major meat and poultry processors in key markets, where excessive concentration and control has led to lower prices paid to producers and higher prices paid by consumers.
The USDA announced a proposed rule under the Packers and Stockyards Act to protect poultry growers from abuse, the first of three rulemakings that USDA will issue under President Biden’s executive order aimed at stopping unfair, deceptive, discriminatory, and anticompetitive practices in the meat and poultry industry.
The new rulemaking will require poultry processors to provide key information to poultry growers at several critical steps—increasing transparency and accountability in the poultry growing system. For example, processors would be required to disclose details of the inputs they provided to each farmer and information about the input differences among farmers being ranked. Furthermore, disclosures would cover the level of control and discretion exercised by the poultry processor and what financial returns the farmer can expect from the relationship based on the range of real experiences of other growers. Contracts would also be required to contain guaranteed annual flock placements and density. Poultry processor CEOs would be required to sign off on the compliance process for disclosure accuracy.
The USDA is also opening an inquiry into whether some practices of processors in the tournament system are so unfair that they should be banned or otherwise regulated. USDA seeks input from stakeholders to determine whether the current tournament-style system in poultry growing could be restricted or modernized to create a fairer, more inclusive marketplace.
Vilsack announced that USDA is making available $200 million under the new Meat and Poultry Intermediary Lending Program (MPILP) to strengthen the food supply chain and create opportunities for small businesses and entrepreneurs in rural communities. These funds will provide much-needed financing to independent meat and poultry processors to start up and expand operations.
The MPILP will provide grants of up to $15 million to nonprofit lenders, including private nonprofits, cooperatives, public agencies and tribal entities. These intermediaries will use this funding to establish a revolving loan fund to finance a variety of activities related to meat and poultry processing. For example, businesses may use the loans to acquire land, build or expand facilities and modernize equipment.
For more information, please visit www.rd.usda.gov/mpilp and read USDA Rural Development’s program announcement.
Vilsack also announced $25 million in investments for workforce training programs for meat and poultry processing workers with American Rescue Plan Act Section 1001 funding. The targeted funding through new and existing National Institute of Food and Agriculture (NIFA) programs is designed to create and expand upon good-paying jobs that can strengthen the meatpacking industry by attracting and retaining employees.
NIFA is leading two funding opportunities:
• Extension Risk Management Education and Sustainable Agriculture Research Education Programs: An investment of $5 million will be split equally between Extension Risk Management Education and Sustainable Agriculture Research Education programs. Work in these programs will support development of meat and poultry processing training and educational materials for place-based needs, particularly relevant to small- or medium-sized farmers and ranchers. Additionally, training local and/or regional meat and poultry workers presents a unique opportunity to address the demand from niche markets, like mobile processing units fulfilling market demand from fresh markets, on-site processing, farm-to-fork (restauranteurs), boutique grocers and others.
• Community/Technical College Ag Workforce Training and Expanded Learning Opportunities: This Agricultural Workforce Training (AWT) investment makes available $20 million to qualified community colleges to support meat and poultry processing workforce development programs. The AWT program helps develop a workforce ready for the field as well as industry jobs in the food and agricultural sectors. By creating new workforce training programs, or expanding, improving, or renewing existing workforce training programs at community, junior, and technical colleges/institutes, this program will expand job-based, experiential learning opportunities, acquisition of industry-accepted credentials and occupational competencies for students to enable a workforce for the 21st century.
The USDA also released a new report on Promoting Competition in Agricultural Markets, as required by President Biden’s executive order on promoting competition in the American economy. The report details USDA’s strategy for promoting competition in agricultural markets—including not only actions and initiatives to promote competition in meat and poultry markets, but also other key agricultural sectors like fertilizer and seeds. The report also discusses the negative impacts concentration in shipping has on our food supply chain and describes USDA’s efforts to work across the Administration to use all available tools to promote competition.