Policy Update Summer 2021

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CONGRESS AND STATE LEGISLATURES TAKE A HARD LOOK AT MEAT PROCESSING

One of the major roadblocks to the pro­duction and sale of high-quality, locally raised meats is the lack of small-scale processors in our country. Part of the blame lies with the federal regulations for “inspected” processors, which include not only having an inspector on-site throughout slaughter and processing, but also large amounts of complicated paperwork for the Hazard Analysis and Critical Control Point (HACCP) plans and associated testing. And part of the blame lies in the complex web of regu­lations and the lack of anti-trust enforcement that allowed a handful of large corporations to overwhelmingly dominate the market, driving small competitors out of business.

The combined effects have led to a situa­tion where many farmers want to raise healthy, grass-fed animals and sell the meat to their local community, but they have no viable option for processing that animal. In many areas of the country, the nearest inspected slaughterhouse is several hours’ drive away, a trip that must be made twice (once to take the animal in and again to pick up the meat) at great expense and stress on the animals. In other areas, the small slaughterhouses are booked a year, or even two years, ahead, making it extremely difficult for farmers to get an appointment when they need it.

Local food communities have been discuss­ing this problem for many years, and a few bills have been filed in Congress to try to address aspects of the lack of accessible meat processors. But, frankly, none of the discussions or bills garnered much interest outside of the hard-core local food community.

And then came 2019. Wyoming led the way in the spring of 2019 with a herdshare bill, allowing farmers to use “custom-exempt slaugh­terhouses,” which do not require an inspector on-site or HACCP plans to process their animals if the consumers pre-purchased an ownership interest in the herd. The bill was positioned as part of the general “food freedom” movement, with only minor discussions about the funda­mental problems with our meat supply.

But just as the Wyoming bill was passing, Americans saw the grocery store shelves go empty as the Covid-19 shutdowns led to disrup­tions in our fragile, consolidated, “just-in-time” agriculture and food system. All of a sudden, the issue of meat processing became front-page news. The PRIME Act, which had languished for years, garnered attention and doubled the number of Congressional sponsors in a matter of months. (The PRIME Act would allow farm­ers to sell meat processed in a custom-exempt slaughterhouse to consumers, retailers and restaurants in-state. Previous issues of Wise Traditions contain extensive articles about the bill.) Other bills were filed, and numerous bipartisan letters were sent to the USDA and DOJ demanding investigations and action into the consolidated livestock and meatpacking industry.

Although people’s memories fade all too quickly, there continues to be significant interest in the issue of meat processing in 2021. Several states filed bills similar to Wyoming’s herdshare law this year, and activists in Nebraska and Colorado were successful in passing LB 324 and SB 21-079, respectively. Bills in Texas and Oregon, however, failed to make progress due to opposition from powerful industry groups.

Congress is also getting into the action. In February, Representatives Pingree (D-ME) and Fortenberry (R-NE) refiled their “Strengthen­ing Local Processing Act.” Importantly, the bill (HR 1258) tries to reduce the regulatory barriers for small-scale processors by directing USDA to publish model HACCP plans and to provide a free, searchable database of research that slaughterhouses can use to develop their own plans. HR 1258 also provides for grants to small and very small establishments, whether USDA-inspected, state-inspected, or custom-exempt facilities to expand their capacity. It authorizes twenty million dollars in new grant programs to support training butchers. Last, it increases the federal share of costs for state inspection and for the Cooperative Interstate Shipment program, to encourage more states to establish state inspection programs and to expand the options for selling meat interstate. And this time, unlike Pingree and Fortenberry’s previous effort, a companion bill in the Sen­ate was immediately filed by eight Senators, equally divided between Democrats and Republicans.

HR 1258 is a good bill that would help local meat producers, but it doesn’t address the fundamental problem that the USDA inspection requirements, which are imposed on state inspection programs as well, are fundamentally scale-prejudicial. The PRIME Act takes a different, and vital, approach, by creating the flexibility for states to break free from the USDA requirements for inspected facilities and allow the use of custom-exempt processors for in-state sales. Custom-exempt proces­sors would still be subject to basic sanitary requirements from USDA, as well as whatever regulations the state chose to add, but they would not have to deal with the HACCP requirements and associated “performance testing” that is both expensive and biased in favor of mass production.

As I write, the PRIME Act is being reintroduced in both the House and the Senate. So watch for action alerts!

USDA TAKING A NEW TURN ON FOOD SUPPLY RESILIENCE?

For decades, the USDA’s mantra has been “get big or get out.” Even as it added some programs to promote local agriculture, such as the “know your farmer” initiative under Obama, the agency treated them as specialty programs, not to interfere with the real work carried out by the big agribusinesses. The accepted terminology was that the large-scale, conventional ag was “production agriculture”—with the implication that the rest of us weren’t producing anything meaningful.

But on June 8th, the USDA announced that it would invest more than four billion dollars “to strengthen the food system, support food produc­tion, improved processing, investments in distribution and aggregation, and market opportunities.”

The statement from Agriculture Secretary Vilsack was surprisingly candid about the problems with our system: “The COVID-19 pandemic…exposed a food system that was rigid, consolidated, and fragile. Mean­while, those growing, processing and preparing our food are earning less each year in a system that rewards size over all else. The Build Back Better initiative will make meaningful investments to build a food system that is more resilient against shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds.” The agency’s announcement included a statement that it will “seek to increase transparency and competition with attention to how certain types of conduct in the livestock markets and the meat processing sector have resulted in thinly traded markets and unfair treatment of some farmers, ranchers and small processors. Among other investments in the food system and food supply chain, Build Back Better will specifically address the short­age of small meat processing facilities across the country as well as the necessary local and regional food system infrastructure needed to support them.”

This statement, directly connecting the fragility of the conventional food system with the need to support small-scale producers and processing, is a significant shift from the agency’s rhetoric about production agriculture and the benefits of large, supposedly efficient, operations.

But it’s all too easy for government spend­ing to be wasted to no effect (or even to the op­posite effect than announced). So now we need to work to ensure that these statements translate into real changes.

Earlier this year, the USDA began soliciting public comments on the issue of supply chains in agriculture and food. Based on a call I had with the senior staff on the project, it’s clear that they are aware of, and seeking comments about, how to address the problems with the consolidated meatpacking industry, and the lack of small-scale processors. In that call, though, I pointed out the broader issue: it makes no sense to provide grant funds and specialty programs to promote diversification if the agency simul­taneously adopts regulations and policies that unduly burden small-scale, diversified produc­ers or closes off markets to them. For example, electronic animal ID—a program that WAPF and other groups have fought against for almost two decades—is extremely scale-prejudicial, and the benefits flow to the large, consolidated industries. The only way to change the “get big or get out” system over the long term is to require that all new agency regulations, policies and programs be reviewed to identify whether they are scale-prejudicial and therefore promote consolidation. Supporting resilient, diversified agricultural and food systems has to become part of the core mission, not window dressing.

LEGISLATIVE ORGANIZING LEADS TO A REGULATORY WIN FOR RAW MILK IN TEXAS

Last, some good news, which carries with it a lesson on the value of organizing even in the face of repeated losses. After eleven years of fighting over raw milk, the Texas Department of State Health Services (DSHS) published new regulations in May that removed one of the key restrictions that hobbled raw milk producers for so long.

The background situation is that Texas regulations allow dairies to get a Grade A li­cense to sell raw milk directly to consumers, but then limits those sales to on-farm only. This limitation is not set in statute, but has been part of the agency’s regulations since the 1980s.

The current saga began in 2009, when DSHS proposed to make it even harder for con­sumers to get raw milk. The agency proposed language that would have explicitly barred any sort of drive-sharing or group arrangements, so that each and every individual consumer would have to drive to the farm every single week. The proposal would have also required farmers to provide lists of their customers to the agency! Raw milk advocates fought back, and the agency’s policy board put a halt to the proposed changes. But when we pressed to change the pre-existing regulatory limit on raw milk sales, they declined… so we turned to the legislature instead.

A bill to allow farmers to deliver raw milk and to sell at farmers’ markets gained a lot of support very quickly, but was repeatedly blocked by opposition from the large dairy industry combined with the Texas Medical Association. The bill even managed to pass both the House and the Senate, with very strong votes—but not in the same session. After five attempts to pass the bill (the Texas Legislature only meets every other year, so this effort spanned a full decade), we were still determined to keep fighting but, candidly, were growing rather tired.

Then, in 2020, DSHS released draft changes to the raw milk regulations. That first draft was extremely bad—bringing back the earlier pro­posal to require customer lists, adding random new problematic requirements (such as a ban on freezing raw milk) and not providing any real reform on the issues we had spent a decade fighting over.

But that decade of organizing for legislative reform made a differ­ence. There is a basic reality in negotiations—you need to be able to give the other side something they want in order to get something you want. Although our bill had failed to pass, the fights over it had taken up significant amounts of the agency’s time and, even more importantly, its political goodwill with legislators. Despite the past failures, we had made sufficient progress toward passing the bill such that it was realistic to believe that we would succeed given more time. Finally, although we have been at odds with the agency in those legislative fights, we had still developed a relationship of respect, by avoiding political rhetoric and negotiating in good faith based on actual data. Combined, this made it worthwhile to the agency to develop a negotiated solution.

The final new regulations were published in May of this year and make several important changes from the current regulations:

• Legalizes delivery of raw milk anywhere in the state that the consum­ers and farmers wish to arrange. Sales at farmers’ markets are not allowed, but a farmers’ market booth can serve as a delivery point for pre-purchased raw milk.

• Empowers farmers to take their own samples to any approved lab, so they can ensure proper handling and quick results. The lack of this option in the past caused several farmers to have their licenses suspended.

• Recognizes the legality of animal shares. Until now, cow/goat/herd­shares operated in a gray area of Texas law. Advocates contended that they were legal under normal principles of contract law, while the agency contended that they were illegal sales. So herdshare owners operated under a cloud of fear of government action. Now, as long as the herdshare operates with a bill of sale and divides milk propor­tionally (which a true herdshare should do), the agency’s new rules recognize that it is not a “sale” and is excluded from the regulations.

• Expands the category of raw milk products that can be sold by Grade A licensed producers to include cream, sour cream, yogurt, buttermilk, whey, eggnog and kefir.

These new regulations, while not everything we wanted, are a huge step forward.

Our current food system, with its extreme consolidation of market and political power and vast array of unhealthy foods, didn’t occur overnight. It will take many years of focused, strategic work to truly change it. It’s vital to keep our focus on building power in the movement, whatever the result of a specific bill or initiative. Persistence pays off!

This article appeared in Wise Traditions in Food, Farming and the Healing Arts, the quarterly journal of the Weston A. Price Foundation, Summer 2021

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