President Biden Issues Executive Order Targeting Anti-Competitive Practices
On July 9, 2021, President Biden issued an Executive Order on Promoting Competition in the American Economy. The order targets consolidation across many different industries and contains several provisions specifically concerning agricultural markets.
In this order, Biden first establishes a “White House Competition Council” to “coordinate promote, and advance Federal Government efforts to address overconcentration, monopolization, and unfair competition in or directly affecting the American economy.” Council membership will include the heads of nine named federal agencies chaired by the Assistant to the President for Economic Policy and Director of the National Economic Council.
Biden then directs the United States Department of Agriculture (USDA) to consider new rules under the Packers and Stockyards Act to address unfair or deceptive practices in the livestock, meat, and poultry industry. This rules would be intended to make it easier for farmers to bring lawsuits without fear of retaliation. The order goes on to urge the USDA to initiate rulemaking to develop a voluntary “Product of the USA” labeling program and develop a plan to promote market access opportunities for farmers. In 2015, Congress repealed the mandatory Country of Origin Labeling law after the World Trade Organization found it violated trade agreements with Canada and Mexico.
Additionally, the order encourages the Federal Trade Commission (FTC) to limit “unfair anticompetitive restrictions on third-party repair or self-repair of items, such as the restrictions imposed by powerful manufacturers that prevent farmers from repairing their own equipment.” Currently, some farm equipment manufacturers prohibit self-repairs through their terms of service agreements. Representative Morelle introduced the Fair Repair Act in the U.S. House of Representatives last month. H.R. 4006.
In response to the order, the USDA announced it would undertake several initiatives to increase competition in the agricultural sector. The USDA intends to commit $500 million of funds from the American Rescue Plan Act to support the establishment of new processing facilities; $55.2 million for the Meat and Poultry Readiness Grant program; and $100 million to offset unexpected costs that small processing plants have incurred due to COVID-19.
The USDA also intends to three action related to rulemaking in the months ahead. The first rulemaking will address what conduct qualifies as unfair, deceptive, or unjustly discriminatory under the Packers and Stockyards Act. See 7 U.S.C. § 192(a). Secondly, the USDA will withdraw the current inactive proposal involving poultry grower ranking systems and propose a new rule to address oppressive practices in the poultry industry. See 81 FR 92723. In the third rulemaking, USDA will re-propose its position that harm to competition is not required in all cases under the Packers and Stockyards Act.
The USDA also intends to develop a plan to help producers obtain access to new markets including value-added markets and local food systems. Additionally, the USDA will conduct a top-to-bottom review of the “Product of USA” label to promote transparency.
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