Northern Plains Resource Council
FOR IMMEDIATE RELEASE: August 1, 2000
CONTACT: Gilles Stockton, Chairman, NPRC Agriculture Task Force, 406 428-2183; Shane Kolb, WORC Agriculture Issue Team; 605 244-7145
USDA POSTPONES DECISION ON CAPTIVE SUPPLY PROPOSAL FAMILY FARMERS, RANCHERS DISAPPOINTED AFTER FOUR YEAR WAIT
BILLINGS - USDA's much awaited announcement of new regulations to promote fair competition in livestock markets fell short of expectations among the family farmers, ranchers and consumers that make up the Northern Plains Resource Council and the Western Organization of Resource Councils.
"What Secretary Glickman has proposed is a step in the right direction," said Gilles Stockton, a rancher from Grass Range, Montana who chairs NPRC's Ag Task Force. "But this proposal does nothing to stop the vertical integration that is threatening to eliminate independent cattlemen like myself, and that's what we're really concerned about."
On Friday, Secretary of Agriculture Dan Glickman announced that the USDA's Grain Inspection, Packers and Stockyards Administration (GISPA) will issue new rules in order to ensure fair competition in the livestock, poultry, and meatpacking industries. Specifically, the new regulations will require full disclosure of contract terms, clarify packers' record-keeping requirements, prohibit some conditional purchases, and require that packers specify the basis on which they pay different prices for like quality cattle.
Glickman postponed a decision on WORC's petition for rulemaking on captive supplies, which seeks to restrict the way packers use forward contracts and cattle they own and feed themselves. Glickman said that USDA still needs to gather more information, prompting pointed criticism from the two citizens' groups.
"The USDA has been studying the proposed rules for years, and I do not understand what further evidence is needed," said Stockton, pointing out that WORC's proposed rules are supported by extensive legal analysis, economic evidence, and have wide public support from agricultural and consumer groups representing hundreds of thousands of individuals. WORC's proposal has likewise been endorsed by a bi-partisan group of Mountain and Plains State Congressional delegations and state officials, including Montana Senators Baucus and Burns, Attorney General Mazurek, and Congressional candidates Brian Schweitzer and Nancy Keenan.
Shane Kolb, a rancher from Meadow, South Dakota who chairs WORC's Ag Issue Team, remarked that Glickman's decision to gather more evidence is well-meaning, but a classic case of too little, too late. "Glickman has side-stepped a decision on our proposal to end the secret deals undermining our livestock markets. With the small amount of time he has left to act, that big step sideways looks very disappointing from here in the country."
USDA statistics indicate that in the four years that have passed since WORC's petition for rulemaking was published in the Federal Register, the average level of captive supplies in the major cattle-feeding states has increased from 20% to 40% of total slaughter. Two subsequent USDA economic studies demonstrate that higher levels of captive supplies result in lower cattle prices, resulting in less money for cattle producers. This explains why cattle feeders have received less and less for their cattle while retail beef prices have steadily increased. Estimates based on USDA's own Texas Procurement Study show that at today's levels of captive supplies, cattle producers may be losing more than $1 billion a year to secret cattle deals.
Partly in response to WORC's concerns, Glickman appointed a Commission on Concentration in Agriculture in February of 1996, and in the following year formed the National Commission on Small Farms, each of which conducted hearings and gathered evidence. In June of 1996, the Committee on Agriculture Concentration reported to Glickman that he had the power and discretion to enact the market reforms proposed by WORC, and the minority report endorsed WORC's proposal. The National Commission on Small Farms endorsed WORC's reforms outright. Members of both NPRC and WORC expressed dismay at Glickman's refusal to follow the recommendations of the commissions he had appointed to examine the issue.
"That Secretary Glickman, at the end of his tenure in office chooses to not address the problem of market structure is indefensible," said Stockton. "The Packers and Stockyards Act clearly gives him the authority and obligation to stop anti-competitive practices. Since he has chosen not to meet this responsibility, we are left to try and understand why. We can only conclude that he is sacrificing independent cattle producers and the free market for big money and global corporations."
NPRC is a 28-year-old, grassroots Montana citizens' group dedicated to responsible stewardship of Montana's air, land and water, and to preserving a sustainable system of family agriculture.:
