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29 Apr, 2020 15:41

Big Ag break-up? Senators target America’s meat monopolies, as virus threatens shortages

Big Ag break-up? Senators target America’s meat monopolies, as virus threatens shortages

Two US senators have asked the Federal Trade Commission to launch an antitrust probe into the US meatpacking industry. As these firms struggle to maintain supply chains, calls are growing for a return to small-scale farming.

In the last couple of decades, the American meatpacking industry went through a rapid consolidation. Four companies now handle 85 percent of all beef production in the US, and three of these firms control 63 percent of the country’s pork production. The companies – Tyson Foods, Cargill, the Brazilian-owned JBS S.A., and the Chinese-owned Smithfield – have been criticized extensively before for underpaying farmers and workers, and for horrific animal abuse at their plants.

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The coronavirus pandemic, however, has revealed a gaping vulnerability in such a consolidated system. If any of these mega-processors are forced to shut down, the entire nation’s food supply is threatened.

In a letter to the Federal Trade Commission (FTC) on Wednesday, Senators Josh Hawley (R-Missouri) and Tammy Baldwin (D-Wisconsin) urged the department to open an antitrust investigation into these meat monopolies. 

“This physical plant concentration… has undermined the stability of America’s meat supply and become an issue of national security,” the senators wrote. “These harms might have been mitigated if the meatpacking industry was less concentrated… [and] America’s food supplies are not in the hands of a few, mostly foreign-based firms.”

In calling for an antitrust investigation, the senators are asking the FTC to use the same legislation the Justice Department used a century ago to break up Standard Oil, which at that time controlled 88 percent of the US oil industry. Lawmakers from both sides of the aisle – including Hawley and former presidential candidate Elizabeth Warren – have also called for antitrust investigations into Amazon, Google, and other Silicon Valley tech giants.

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While the FTC has been asked to investigate these firms, the Department of Agriculture’s own regulations make it difficult for a small-scale farmer to turn a profit. At present, meat can only be slaughtered commercially at a facility with a USDA inspector present, thanks to a 1967 Act. Smaller facilities that can’t afford the cost of compliance are muscled out of business, with farmers left to accept whatever price the megacorporations pay them. One farmers’ advocacy organization estimated in 2016 that the 1967 legislation was responsible for the closure of more than 7,000 slaughterhouses since its passage. 

The PRIME Act, a piece of legislation languishing in Congress for several years, would give states the power to set their own regulations, allowing consumers to purchase directly from local producers without the USDA’s involvement. Its sponsors, Rep. Thomas Massie (R-Kentucky) and Rep. Chellie Pingree (D-Maine), are now using the coronavirus pandemic to make another push for its passage.

The FTC has not signaled that it will heed Hawley’s call for an antitrust probe, and Massie’s bill has sat idle on Capitol Hill since 2017. In the near term, the Trump administration has opted to press the meatpacking industry to keep working, even as more workers fall ill from Covid-19.

President Donald Trump announced an executive order on Tuesday to keep the plants open, citing them as “critical infrastructure.” The move was swiftly condemned by labor unions for failing to care “as much about the lives of working people as it does about meat, pork and poultry products.”

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