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The last two years have been dominated by the Covid-19 pandemic and our government’s and society’s response to it. What has it meant for farming and food safety laws and policies?
There isn’t a simple answer. We’ve seen some new regulatory flexibility, as well as an increased focus on the problems stemming from corporate control of our food system. But many of the changes are still not directed at the real problems, and there are troubling signs on the horizon on animal ID.
Tester Amendment Impact of Covid-19 on Food Safety
Starting with a measure that is nothing but good: the Food & Drug Administration (FDA) chose to apply the Tester Amendment (the qualified exemption) in a surprisingly common-sense way. Under the Tester Amendment, farmers who sell less than half a million dollars of food a year and who sell more than half directly to consumers or local restaurants and retailers (“qualified end users”) are exempt from the substantive provisions of the Produce Safety Rule. The cutoff for total sales is adjusted for inflation and determined based on the average sales over the previous three years. For example, the threshold for 2021 is based on the three-year average of sales between 2018 and 2020, with a cut-off of $571,214.1 Thanks to this provision, thousands of small, direct-marketing farms have been saved from the expensive and potentially crushing burdens of the Produce Safety Rule.
With the pandemic restrictions, we’ve seen a significant growth in direct sales, but many farmers also lost their local restaurant buyers and had to start doing more indirect sales, which normally would have resulted in them losing their qualified exemption and potentially being driven out of business by regulatory burdens. But the FDA has provided that any farm that was qualified exempt based on its sales prior to the pandemic will remain exempt so long as its total sales remain under the threshold amount, regardless of who they sell to, for the duration of the “Covid-19 public health emergency.”2 For farms with less than three years of sales history, FDA is just looking at the total sales.3 Given the FDA’s historical ambivalence, if not outright opposition, to the Tester Amendment, this flexibility is a welcome surprise.
Addressing Meat Supply Problems Due to Covid-19
Once we move past the application of the Tester Amendment, the developments are less clearcut. In January, the administration announced several initiatives intended to address the problems in our meat supply. While people within the local food movement have been aware that the conventional system was fragile, it took the shortages during the pandemic to make the average American aware of the dangers of letting our food supply be controlled by a handful of large companies. After decades of “get big or get out” policies, the federal government is rethinking that approach—although the concepts, assumptions and biases are deeply entrenched and far from being abolished.
The January announcement contained multiple parts. The first part involves grants through the U.S. Department of Agriculture (USDA) for “independent processing plant projects that fill a demonstrated need for a more diversified processing capacity.” The agency will also work with lenders to provide advantageous loans for independently-owned food processing and distribution infrastructure. While the agency committed to funding only truly independent operations not connected with “the largest meat and poultry processors,” it did not do what many groups had asked—add a condition to the funding that prevents the independent processors who receive funding from later selling out to the big companies. In other words, while these new processors and distributors may provide a needed service, they can be co-opted by the large operations in the future.
The administration also announced efforts to “build a pipeline of well-trained workers and support safe workplaces with fair wages.”4 The need for this is two-fold. First, the exploitation of workers in the huge processing plants has been one of the elements helping the meatpackers to maintain their market dominance. Second, a skilled workforce has often been one of the major limiting factors for small processors that are located in rural areas. Unfortunately, the agency didn’t acknowledge that these communities have had their financial and intellectual prosperity drained away by decades of government policies designed to encourage people to move out of agriculture, nor did it commit to changing those policies.
The USDA is also investing tens of millions in technical assistance, research and development to help independent business owners, entrepreneurs, producers and other groups, such as cooperatives and worker associations, create new capacity or expand existing capacity. Finally, the agency has reduced the overtime inspection fees for small and very small processors.
The policy commitments go beyond the USDA as well. The January announcement included a joint effort by USDA and the Department of Justice (DOJ) to address the anti-competitive and unfair tactics used by the meatpackers to dominate the market.
Yet, with all this, the USDA is not doing any examination of how its own regulations put small and very small processors at a disadvantage. In effect, they are giving money and advice to processors to try to overcome the barriers that are in part created by the agency’s regulations. I raised this in two calls with senior USDA officials in December and January. The January call was notable because it was a White House stakeholder call that was focused on the new “whole agency” approach to addressing the meat supply. I pointed out that a “whole agency approach” should also include its regulatory arm, something that apparently had not occurred to them before.
Meatpacker Mergers
On another front, both the agencies and the members of Congress are paying more attention to the problems with corporate consolidation and the dominance of international meatpackers in general. In early February, thirteen members of Congress came out against the proposed merger of Sanderson Farms and Wayne Farms. Poultry is already one of the most heavily concentrated industries, with the dominant “Big Four” companies—JBS Foods, Tyson, Perdue, and Sanderson—holding a combined 54 percent of the market. First announced in August 2021, this latest merger would combine the third- and sixth-largest poultry processors in the United States. Sanderson would be sold to Cargill and Continental Grain for over four billion dollars, and then merged with the Continental-owned Wayne.
In a letter to the DOJ, the legislators wrote, “The proposed merger raises significant antitrust concerns in an industry already marked by price fixing, labor violations, and intense consolidation.”5 This letter follows an earlier one from Senator Elizabeth Warren that discussed how “American consumers were hit with disproportionately high prices on poultry while major poultry companies enjoyed record profits, massive stock buybacks, and CEO raises.”
The DOJ has issued what is known as a “second request for information,” which indicates that the agency is taking a closer look at whether the merger may violate antitrust laws. Past mergers have been met with disinterest by the regulators, so this scrutiny on the Sanderson/ Wayne merger is a very promising development.
COOL (Country of Origin Labeling)
In a parallel development, grassroots calls for greater transparency in the food system have gained significantly greater bipartisan support despite continued opposition by major meatpackers and their nonprofit mouthpieces. For those who have missed past discussions of Country of Origin Labeling (COOL), you may have noticed that the labels on many foods in the grocery store include what country the food comes from. You can choose to buy tomatoes from Texas or Mexico, and you know whether your apples come from the U.S. or Canada. But that’s not true for beef and pork. COOL has been missing from beef and pork since 2015, when the World Trade Organization claimed that it was a “trade barrier”—and Congress caved in to the international pressure, repealing mandatory COOL on pork and beef.
The lack of mandatory COOL (mCOOL) allows the massive meatpacking companies to import meat from less expensive countries, place a USDA label on it (since USDA supposedly inspects the meat coming in) and mislead consumers into thinking the meat is American-raised.
For people who buy their meat directly from local farmers, this may not seem like a big deal—after all, you know where your meat comes from far better than any label could ever tell you. But it’s still an important issue for everyone: farmers and consumers, conventional and holistic. Imports (grass-fed beef included) often create unfair price pressure and mislead consumers about the real costs of raising food in this country. While many American consumers are willing to pay more to support domestic food production, they simply don’t know what to buy at the stores in order to do so. And the more American ranchers get squeezed in the conventional system, the more we lose vital infrastructure that is critical to rebuilding local and regional food production.
The American Beef Labeling Act of 2021, S.2716, would reinstate mCOOL for beef, so that consumers would know where their beef was born, raised, slaughtered and processed. In an extremely rare show of bipartisan support, ten Senators—five Democrats and five Republicans—have signed on to this bill: Senators John Thune (SD), Jon Tester (MT), Mike Rounds (SD), Cory Booker (NJ), John Hoeven (ND), Ben Ray Luján (NM), Cynthia Lummis (WY), Martin Heinrich (NM), John Barrasso (WY), and Kirsten Gillibrand (NY).
Ban Mega Mergers Act
In addition, there is greater attention being paid to the broad issue of corporate consolidation. As this article goes to press, Senator Warren is poised to introduce a new bill, to be entitled The Break-Up and Ban Mega Mergers Act, that aims to rein in rampant corporate consolidation. It has three parts:
1. It makes all “mega mergers” illegal. These are deals between parties earning over twenty-five billion dollars annually, or that result in market share of over 33 percent for seller or 25 percent for employers.
2. It overhauls the merger-review process by empowering antitrust agencies to stop the most harmful mergers without court orders, which not only saves litigation costs, but also prevents the review from being limited to questions only about the impact on consumers (for example, it allows mergers to be stopped based on impacts to the producer base and/or workers).
3. It contains a lookback provision which requires the government to review all mega mergers from the past twenty years, which would include such unions as the Monsanto- Bayer merger and several others that have severely affected farmers and food producers of all types.
Even with all the caveats noted so far, these developments are generally positive. Yet even if all these efforts come to fruition, there is a long way to go before the federal government could truly be said to have changed its “get big or get out” policy approach in order to restore a competitive market in which local farmers face a fair playing field. The pro-big business attitudes permeate every aspect of government policy, resulting in innumerable policies that are driven by the interests of Big Ag even if they appear to be about other topics, such as animal health.
Mandatory Animal ID
One of the prime examples is mandatory animal ID. While the USDA withdrew plans for mandatory electronic ID back in 2010, the issue has never gone away completely because of the benefits it would create for Big Ag and their global markets. Most recently, the USDA has been addressing an outbreak of high-pathogenic avian influenza. Cases of high-path avian influenza have been reported in ten states in a mix of large-scale commercial flocks, “backyard” flocks and captive wild birds. Back in the mid-2000s, avian influenza cases were used (along with Mad Cow Disease and Foot & Mouth Disease) as one of the reasons that the U.S. supposedly needed to electronically ID and track every livestock and poultry animal in the country under the proposed National Animal Identification System (NAIS). Now, in the wake of Covid and its supposed roots as a virus that was transmitted from animals to humans, the USDA has even more cover to push overreactive measures to this virus. The agency hasn’t announced plans yet, but we are watching this issue very closely.
Next Year’s Farm Bill
Hovering over all these issue is next year’s Farm Bill, which is already the subject of committee hearings in Congress. Will it simply have some increased funding for the few programs that support local foods, or will it include reforms to the numerous provisions that have driven large-scale, consolidated, chemical-dependent, export-focused conventional agriculture? It’s vital that our community be involved in this work to push for the latter result, building a resilient food system now and into the future.
REFERENCES
1. https://www.fda.gov/food/food-safety-modernization-act-fsma/fsma-inflation-adjusted-cut-offs
4. Fact Sheet: The Biden-Harris Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain (Jan. 3, 2022), https://www.whitehouse.gov/briefing-room/statements-releases/2022/01/03/fact-sheet-the-biden-harris-action-plan-for-a-fairer-more-competitive-and-more-resilient-meat-and-poultry-supply-chain/
5. Press Release (Feb. 17, 2022), https://www.warren.senate.gov/ newsroom/press-releases/warren-jones-lead-colleagues-in-slamming-proposed-sanderson-wayne-poultry-merger-and-call-on-doj-to-take-action-as-americans-face-soaring-poultry-prices.
This article appeared in Wise Traditions in Food, Farming and the Healing Arts, the quarterly journal of the Weston A. Price Foundation, Spring 2022
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