Agriculture

The Packers and Stockyards Act passed in 1921 to maintain competition in the livestock industry.

The Act contains provisions banning price discrimination, the manipulation of prices, weight manipulation of livestock or carcasses, manipulation of carcass grades, commercial bribery, and misrepresentation of source, condition, or quality of livestock, in addition to other unfair and deceptive practices. The importance of the law has increased as concentration in the livestock industry continues to grow dramatically. More

The conversion of biomass into ethanol and biodiesel provides farmers an additional market for their crops. Over the years, many federal and state rules have been developed to promote biofuels production for use in industry and reformulated gasoline. While this page does not include an exhaustive list of ethanol incentives, the rules on this page are unique in that they encourage ethanol and biodiesel production on a small scale. A decentralized, rural biofuels industry tends to favor a greater number of farmers over a wider area. Production credits for smaller facilities also promotes the formation of farmer-owned cooperatives that further increase returns to farmers. More

As farmers experience ever declining incomes, many have turned to directly selling their products in local markets. Expanding local markets for agricultural products connects producers directly with consumers, increasing farmers' incomes by eliminating the middleperson. Food and dollars stay in town, transportation costs are minimized, and a connection between farmers and the community is fostered. Using farmers markets, community supported agriculture, and new state marketing and inspection programs, a new turn towards local markets has begun. As these markets expand, local food systems are being rebuilt to replace the centralized, corporate ones currently in place. Below are the rules and trends that are driving such a transition. More

Some communities have banned the use of pesticides whereas others have used taxes to reduce the use of fertilizers and pesticides.  While the level of taxation is in some cases not high enough to directly discourage pesticide and fertilizer use, indirect reductions occur as a result of channeling revenues towards sustainable farming practices which tend to use less pesticides and fertilizer inputs. More

In recent years livestock producers, particularly small ones, have been at a competitive disadvantage vis-a-vis large meatpackers because so many market transactions were unreported. Cash market transactions, which the USDA uses to establish market prices, have been drastically reduced in recent years, replaced by contracts and special arrangements. Without open reporting, fair market prices cannot be established and price discrimination (link) is difficult to prove. In 1998-99, states took matters into their own hands and passed legislation that would require packers to reveal the price they pay whenever they purchase livestock More

The use of production and marketing contracts in agriculture has dramatically increased the vertical integration and concentration of U.S. agriculture. Processors benefit from extraordinary bargaining power, and are able to offer "take it or leave it" contracts to farmers. As a result, most contracts contain obscure language, payment plans, and confidentiality provisions that make it difficult to negotiate a fair deal. Once farmers agree to a contract, there are no provisions barring early cancellation, which may leave farmers with huge loans on production equipment and no market. More

In 1996, the six states of New England (Maine, Vermont, New Hampshire, Connecticut, Rhode Island, and Massachusetts) were authorized by Congress to form the Northeast Dairy Compact. More

Country- and state-of-origin labeling laws allow consumers to choose food that originates within their state or country, thereby supporting local or national producers. Progress on national labeling laws has been slow. A country-of-origin labeling law for many food products was finally passed as part of the 2002 Farm Bill, but full implementation has been delayed until September 2006.

In the meantime, states have taken the initiative to put in place their own labeling laws. A 1979 Florida statute that requires country of origin labeling of fresh fruits, fresh vegetables, and honey was the first in the U.S. Many states require all meat retailers to clearly label imported meat with the country of origin, including Wyoming, Kansas, North Dakota, South Dakota, and Montana. More

Genetically Modified Organisms have raised questions of safety across the world.

Increasingly, a small handful of corporations control inputs, credit, elevators, processing facilities, and markets necessary to grow and distribute agricultural products. Since the last half of the 19th century, farmer owned cooperatives have provided farmers a stronger presence in the marketplace and greater bargaining power to control the costs of inputs and the value of outputs. These new forms of agricultural cooperatives are commonly referred to as "value-added coops" or "new generation coops." In 1994, 2,200 marketing coops sold 31 percent of all U.S. farm commodities and 29 percent of the nation's farm supplies. More

Corporate owned farms tend to be large-scale operations that produce food for consumers who are widely dispersed geographically. They are also operations whose profits are more likely to end up in corporate headquarters than back in the local economy. And when corporate farming expands, those who farm the land become tenants rather than independent producers. More

In the 1920's, the farm cooperative marketing movement sought to organize commodity cooperatives that could control the supply of goods in an attempt to stabilize markets. But without an ability to control production, they failed. The idea of supply management has resurfaced every few decades since, most notably in the 1960's and 1980's. More

Agribusiness mergers squeeze the food industry into an hourglass- with many producers and consumers but increasingly fewer processors and distributors. Food chain clusters of Monsanto/Cargill, ConAgra, and Novartis/ADM are vertically integrating to control production from "farm gate to dinner plate". As agribusiness concentrates, their power to buy low from farmers and sell high to consumers increases. For example, four meatpacking companies--ConAgra, IBP, Cargill and Farmland National--currently control 87 percent of the nation's cattle slaughter, up from only 36 percent in 1980, along with 54 percent of the hog slaughter and 70 percent of the sheep slaughter. More

As massive, concentrated feedlots spread across the U.S., states are using a variety of techniques to protect their rural economies and environment. States such as Mississippi, North Carolina, Oklahoma have enacted large scale feedlot moratoriums. Some counties have proposed or enacted rules that place various restrictions on feedlot facilities--required setbacks, public hearing process, manure management plans, lengthy permitting processes--to regulate size. In states such as Iowa where the state regulates a county's authority to zone land or buildings for agriculture, new ordinances have been adopted to limit the spread of feedlots. The following section details these efforts and lists the rules that limit scale. More

In recent years, the largest 7 percent of U.S. farms received approximately three quarters of the market value of all agriculture products sold. About 75 percent of U.S. farms now share a mere 7 percent of the market value. Yet when agricultural payments are distributed, they are blind to the scale of farms. Consequently a small number of concentrated farms receive the lion's share of subsidies.

Payments to farmers under federal farm programs have reached an historic high - over $20 billion in fiscal year 2000. Nearly one-half of U.S. farms are receiving payments for income or price support purposes and/or for engaging in activities such as land conservation. These payments, in total, made up almost one-half of net farm income in fiscal year 2000. More

In many states, higher prices are offered for large shipments of cattle or hogs, effectively discriminating against smaller producers providing identical products. In the absence of any federal initiatives, South Dakota, Nebraska, Minnesota, and Missouri have all passed price discrimination laws. Efforts in Kansas are currently underway. More