118 S2670 IS: Fairness for Small-Scale Farmers and Ranchers Act U.S. Senate 2023-07-27 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

II118th CONGRESS1st SessionS. 2670IN THE SENATE OF THE UNITED STATESJuly 27, 2023Mr. Welch (for himself, Mr. Booker, and Ms. Warren) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and ForestryA BILLTo regulate market concentration and competition in the food and agriculture industry, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Fairness for Small-Scale Farmers and Ranchers Act. (b)

Table of contents

The table of contents for this Act is as follows:Sec. 1. Short title; table of contents.Sec. 2. Findings.Sec. 3. Definitions.Title I—Moratorium on and review of large agribusiness, food and beverage manufacturing, and grocery retail mergersSec. 101. Moratorium on large agribusiness, food and beverage manufacturing, and grocery retail mergers.Sec. 102. Retroactive review of large agribusiness, food and beverage manufacturing, and grocery retail mergers.Title II—Farm system reformsSec. 201. Local agriculture market program.Sec. 202. Restoration of mandatory country of origin labeling for beef and pork; inclusion of dairy products.Sec. 203. Definitions in Packers and Stockyards Act, 1921.Sec. 204. Unlawful practices.Sec. 205. Spot market purchases of livestock by packers.Sec. 206. Investigation of live poultry dealers.Sec. 207. Ensuring fair practices in agriculture.Sec. 208. Award of attorney fees.Sec. 209. Review and report on fragility and national security in the food system.Sec. 210. Technical amendments.Title III—Providing resources for beginning, retiring, and socially disadvantaged farmers and ranchersSec. 301. Reauthorization and increased funding for beginning, retiring, and socially disadvantaged farmers and ranchers.Title IV—Livestock, dairy, and poultry supply chain infrastructureSec. 401. Livestock, dairy, and poultry supply chain infrastructure grants and loans.Sec. 402. Pilot program for increased accessibility to inspection and technical assistance for eligible processing facilities.

2.

Findings

Congress finds the following:(1)Concentration in the food and agricultural economy, including mergers, acquisitions, and other combinations and alliances among suppliers, packers, integrators, other food processors, distributors, and retailers has been accelerating at a rapid pace since the 1980s, and particularly since the 2007 through 2009 recession.(2)The trend toward greater concentration in food and agriculture has important and far reaching implications not only for family farmers, but also for food chain workers, the food we eat, the communities we live in, the integrity of the natural environment upon which we all depend, and for our collective public health.(3)The infant formula industry, for example, has reached an alarming level of corporate concentration with 4 companies now controlling nearly 90 percent of the infant formula market. A disruption in the supply of just 1 infant formula producer now presents a grave risk to infant health in the United States.(4)In the past 4 decades, the top 4 largest pork packers have seized control of 70 percent of the market, up from 36 percent. Over the same period, the top 4 beef packers have expanded their market share from 32 percent to 85 percent. The top 4 flour millers have increased their market share from 40 percent to 64 percent. The market share of the top 4 soybean crushers has jumped from 54 percent to 79 percent, and the top 4 wet corn processors control of the market has increased from 63 percent to 86 percent.(5)Today the top 4 sheep, poultry, and fluid milk processors now control 62 percent, 54 percent, and 50 percent of the market, respectively.(6)The top 4 grain companies today control as much as 90 percent of the global grain trade.(7)During the past 5 years there has been a wave of consolidation among global seed and crop-chemical firms, 3 companies now control nearly 2⁄3 of the world’s commodity crop seeds. Those same 3 companies now also control nearly 70 percent of all agricultural chemicals and pesticides.(8)In the United States, the 4 largest corn seed sellers accounted for 85 percent of the market in 2015, up from 60 percent in 2000. Over the past 20 years, the cost for an acre’s worth of seeds for an average corn farmer has nearly quadrupled, and the cost of fertilizer has more than doubled. Yet corn yields increased only 36 percent over that time, and the price received for the sale of a bushel of corn increased only 31 percent.(9)A handful of firms dominate the processing of every major commodity. Many of them are vertically integrated, which means that they control successive stages of the food chain, from inputs to production to distribution. The growing number and scale of cross-border agribusiness and food mergers have put foreign firms, often with considerable government backing, into prominent and even dominant positions in the United States beef, hog, poultry, seed, fertilizer, and agrichemical sectors.(10)Growing concentration of the agricultural sector has restricted choices for farmers trying to sell their products. As the bargaining power of agribusiness firms over farmers increases, concentrated agricultural commodity markets are stacked against the farmer, with buyers of agricultural commodities often possessing regional dominance in the form of oligopsony or monopsony relative to sellers of such commodities.(11)The high concentration and consolidation of buyers in agricultural markets has resulted in the thinning of both cash and future markets, thereby allowing dominant buyers to leverage their market shares to move those markets to the detriment of family farmers and ranchers.(12)Buyers with oligopsonistic or monopsonistic power have incentives to engage in unfair and discriminatory acts that cause farmers to receive less than a competitive price for their goods. At the same time, some Federal courts have incorrectly required a plaintiff to show harm to competition generally, in addition to harm to the individual farmer, when making a determination that an unfair, unjustly discriminatory, deceptive, or preferential act exists under the Packers and Stockyards Act of 1921.(13)The farmer’s share of every retail dollar has plummeted from 41 percent in 1950, to less than 15 percent today, while the profit share for farm input, marketing, and processing companies has risen.(14)While agribusiness conglomerates are posting record earnings, farmers are facing desperate times. Since 2013, net farm income for United States farmers has fallen by more than half and median on farm income was negative in 2020.(15)The benefits of low commodity prices are not being passed on to American consumers. The gap between what shoppers pay for food and what farmers are paid is growing wider.(16)The steadily rising price of food has outpaced growth in incomes for typical workers. Since the Great Recession, the annual growth of real prices for food at the supermarket have risen nearly 3 times faster than typical earnings.(17)There is a growing consensus that economic consolidation contributes to the widening gap in economic opportunity in the United States and bigger, more dominant firms are more likely to deliver profits to investors than to raise wages or benefits. Mega-mergers in the food and agribusiness industries can lead to growing monopsony power abuse resulting in wage suppression, along with massive layoffs as companies shutter factories and facilities, harming working families and communities.(18)Concentration, low prices, anticompetitive practices, and other manipulations and abuses of the agricultural economy are driving small family farmers out of business. Farmers are going bankrupt or giving up, and few are taking their places; more farm families are having to rely on other jobs to stay afloat. Seventy-nine percent of farm household income came from off farm work in 2020, up from 53 percent in 1960.(19)Eighty-one percent of America’s farmed cropland is now controlled by 15 percent of farms, and the number of farmers leaving the land will continue to increase unless and until these trends are reversed.(20)The decline of small family farms undermines the economies of rural communities across America; it has pushed Main Street businesses, from equipment suppliers to small banks, out of business or to the brink of insolvency.(21)Increased concentration in the agribusiness sector has a harmful effect on the environment; corporate hog farming, for example, threatens the integrity of local water supplies and creates noxious odors in neighboring communities. Concentration also can increase the risks to food safety and limit the biodiversity of plants and animals.(22)The decline of family farming poses a direct threat to American families and family values, by subjecting farm families to turmoil and stress. Farm advocates across the country are reporting an increase in farmer suicides over the past several years.(23)The decline of family farming causes the demise of rural communities, as stores lose customers, churches lose congregations, schools and clinics become under-used, career opportunities for young people dry up, and local inequalities of wealth and income grow wider.(24)These developments are not the result of inevitable market forces. Its problems arise rather from policies made in Washington, including farm, antitrust, and trade policies.(25)Past congressional action to remediate market failure, such as enacting country-of-origin labeling to provide transparency for domestic farmers, ranchers, and consumers regarding agricultural commodity origins, have been overturned for key commodities by oligopolistic conglomerates that use undifferentiated imports to reduce domestic farm prices.(26)To restore competition in the agricultural economy, and to increase the bargaining power and enhance economic prospects for family farmers, the trend toward concentration must be reversed.

3.

Definitions

In this Act:(1)

Agricultural input supplier

The term agricultural input supplier means any person (excluding agricultural cooperatives) engaged in the business of selling, in interstate or foreign commerce, any product to be used as an input (including seed, germ plasm, hormones, antibiotics, fertilizer, and chemicals, but excluding farm machinery) for the production of any agricultural commodity, except that no person shall be considered an agricultural input supplier if sales of such products are for a value less than $10,000,000 per year.(2)

Broker

The term broker means any person engaged in the business of negotiating sales and purchases of any agricultural commodity in interstate or foreign commerce for or on behalf of the vendor or the purchaser, except that no person shall be considered a broker if the only sales of such commodities are for a value less than $10,000,000 per year.(3)

Commission merchant

The term commission merchant means any person engaged in the business of receiving in interstate or foreign commerce any agricultural commodity for sale, on commission, or for or on behalf of another, except that no person shall be considered a commission merchant if the only sales of such commodities are for a value less than $10,000,000 per year.(4)

Dealer

The term dealer means any person (excluding agricultural cooperatives) engaged in the business of buying, selling, or marketing agricultural commodities in interstate or foreign commerce, except that—(A)no person shall be considered a dealer with respect to sales or marketing of any agricultural commodity of that person’s own raising; and(B)no person shall be considered a dealer if the only sales of such commodities are for a value less than $10,000,000 per year.(5)

Distributor

The term distributor means any entity engaged in the business of distributing agricultural products from producers or manufacturers to consumers, restaurants, or retailers.(6)

Integrator

The term integrator means an entity that contracts with farmers for grower services to raise chickens or hogs to slaughter size and weight. The integrator owns the chickens or hogs, supplies the feed, slaughters, and further processes the poultry or pork.(7)

Processor

The term processor means any person (excluding agricultural cooperatives) engaged in the business of handling, preparing, or manufacturing (including slaughtering and food and beverage manufacturing) of an agricultural commodity, or the products of such agricultural commodity, for sale or marketing for human consumption, except that no person shall be considered a processor if the only sales of such products are for a value less than $10,000,000 per year.(8)

Retailer

The term retailer means any person (excluding agricultural cooperatives, cooperative retailers, and cooperative distributers) licensed as a retailer under the Perishable Agriculture Commodities Act of 1930 (7 U.S.C. 499a(b)), except that no person shall be considered a retailer if the only sales of such products are for a value less than $10,000,000 per year.