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Minnesota livestock producers send message

Small-time farmers request level playing field, fair price for their product

September 2, 2010
By Jenny Kirk

After years of watching rural farmers around the area struggle to receive a fair price for their products in the livestock industry, Boyd hog and crop farmer Darwyn Bach finally got the opportunity to voice his opinion in a big way.

For the past 10 years, Bach has been a member of the Land Stewardship Project - a grassroots organization that promotes sustainable agriculture in communities. But in light of newly proposed federal rules that would level the playing field for small-time farmers up against the four meat packing giants controlling the majority of the nation's agricultural livestock market, Bach wanted to show his support, sparking a journey to Fort Collins, Colo., where he spoke at the Department of Justice/U.S. Department of Agriculture Workshop.

"There's a lot going on right now," Bach said. "The LSP is a bunch of us farmers that want to focus on livestock issues. Just in the hog market alone, I'm seeing a big decline in the area. That's the main point behind all of this."

According to federal farm census data, in the past 30 years, the number of hog farms in the U.S. dropped a 89 percent, from 660,000 to 71,000. For cattle, the number of ranching operations dwindled by 40 percent, from 1.6 million to just 950,000.

"The smaller producers, of grains, hogs, cattle and so on, they all help the communities out," Bach said. "The rural population doesn't have as many opportunities for families and we're seeing a decline in everything, like schools, churches and main street."

Congress in 1921 passed the Packers and Stockyards Act in an attempt to regulate the meat packing industry. But over the years, people argued that the rule was too ambiguous and that a meat monopoly was still in existence.

"The original act was written so vague and it has never been enforced," Bach said. "But right now, four packers are pretty much in charge and the open market is no longer competitive. There's a manipulation by the packers, and the most pertinent one is the packer-to-packer sales focusing on the spot market and open market.

"Both cattle and hogs are declining, with 3.6 percent of the hogs on the open market setting the price for all hogs. The packers buy more hogs from other packers than from producers and they can send price signals to one another."

In 2008, Congress initiated the federal Farm Bill that directed the USDA to step in and clarify the rules set by the PSA. So the Grain Inspection, Packers and Stockyards Administration (GIPSA) came up with a proposal that would implement more effective and efficient tactics as it helped "clarify conditions for industry compliance with the P&S Act and provide a fairer market place."

"Ever since GIPSA came out with this proposal, people have sure been fired up on both sides," Bach said. "The meat packers are putting on a strong push against the implement of the rule because they don't want to give anything up."

According to the USDA, four meat packing companies - JBS (a Brazilian company that purchased Swift, the third largest US meat packer in 2007), Tyson, Cargill and National Beef - control more than 80 percent of the U.S.-produced beef and pork.

Led by USDA Secretary Tom Vilsack and U.S. Attorney General Eric Holder, nearly 2,000 farmers and others took part in the Colorado workshop. While only a small percentage of attendees received the opportunity to speak at one of the panels, Bach was able to address his concerns about the unfair market along with Tim Henning of Adrian.

"There was a limited amount of time for speakers, but we were fortunate enough to draw two numbers from our group," Bach said. "I believe that the politicians do actually listen to us. I'm not as jaded as I was before. I think we'll see implemented change, but we have to make our voice heard. "This proposal is the first thing that has even been a concrete step taken to balance the power. Until now, there haven't been any attempts to change."

Despite being optimistic about the possible changes, Bach believes that this attempt could be the last chance for small-time farmers like himself.

Said Vilsack at the workshop: "I can't tell you today that I know what the solution is, but I know we can't continue this trend because if we do, we will end up with a handful of farmers, a handful of packers, a handful of processors and a handful of grocery stores."

With multiple extensions requested from opposing parties in the livestock industry, a ruling on the proposal has been delayed, but Bach hopes the USDA will enact the rule soon after the public comment period concludes Nov. 22.

"Other groups are pushing for further extensions and are trying to water it down," Bach said. "One side will push harder. How long it takes, I don't know. But the rule proposed now would be good for independent livestock producers."

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