Senate Retains Packer Amendment

February 13, 2002

The Senate voted Tuesday to retain a part of the farm bill that prohibits packers from owning livestock 14 days before slaughter. Sen. Charles Grassley (R-IA), a major supporter, called it a significant victory for independent livestock producers. Sen. Larry Craig (R-ID) had offered an amendment to retract the amendment passed in December.

Grassley then offered a second-degree amendment to counter Craig's claim that the provision was too broad and would affect forward contracts or marketing agreements. Grassley's second-degree amendment clarified the language that forward contracts and forward marketing agreements would be allowed under the ban.

"The big meatpackers were trying to use this issue as a red herring to strip the ban on packer ownership out of the farm bill. Family farmers can rest assured that the argument has been settled," Grassley said.

One of the agriculture organizations opposing removal was the American Meat Institute. AMI said it is disappointed in the Senate's adoption today of a revised version of the packer ownership ban it passed in December. "This revised version does nothing to clarify whether packers could contract with producers for hogs, cattle and sheep," AMI saqid.

If adopted in the final farm bill, AMI continued, "this amendment would force massive asset divestitures by hundreds of companies, flooding the livestock market and driving down livestock prices. It would jeopardize thousands of contractual arrangements between livestock farmers large and small and their meatpacking customers. And it would halt the flow of specialized meat products to domestic and international supermarket and restaurant customers." The amendment "is a classic case of 'ready, fire, aim.' "

National Farmers Union (NFU), however, "acclaimed" senators for the action. "This is a significant win for ranchers whose ability to compete in agricultural markets is threatened by growing levels of concentration," said NFU President Leland Swenson. "Packers that already control up to 80% of the processing, also have been able to undercut market competition by owning cattle and staying out of the cash market for extended periods of time."

In other action, the Senate adopted an amendment that would provide production loss assistance to farmers and ranchers who suffered crop and livestock feed loss during the past year. The amendment, offered by Sen. Max Baucus (D-MT), gives emergency assistance to producers who suffered from adverse weather conditions.

The emergency assistance amendment was first proposed by Baucus as part of an economic stimulus bill that was pulled from consideration by Majority Leader Tom Daschle (D-SD).