One-Fifth of President's Recent Executive Order Impacts Agriculture, Draws Mixed Reaction from Farm Groups

The Biden Administration announced last week they are tackling what the White House views as anti-competitive issues in the U.S. with a new Executive Order. Signed July 9 by President Biden, the Order could have a sweeping impact on agriculture and corporate business, covering competition in everything from meat processors to equipment manufacturers. 

“Of the 72 provisions in President Biden's executive order, one-fifth were agriculture related,” says Jim Wiesemeyer, Farm Journal Washington Correspondent.

The order includes changes to fight anti-competitive practices in agriculture, including the controversial "Right to Repair" topic. Overall, the White House says the executive order will include 72 initiatives by more than one dozen agencies to "tackle some of the most pressing competition problems across our economy."

Addressing Agriculture

While the sweeping Executive Order covers a wide-range of industries, the one-fifth of the Order that applies specifically to agriculture, also includes a number of topics and issues. The White House says the Order directs USDA to:

  • consider issuing new rules under the Packers and Stockyards Act making it easier for farmers to bring and win claims
  • consider issuing new rules defining when meat can bear “Product of USA” labels, so that consumers have transparent labels that enable them to choose products made in the U.S.
  • develop a plan to increase opportunities for farmers to access markets and receive a fair return, including supporting alternative food distribution systems like farmers markets and developing standards and labels so that consumers can choose to buy products that treat farmers fairly

The White House’s Executive Order also called attention to farmers “Right to Repair,” by encouraging the FTC to limit equipment manufacturers from restricting people’s ability to make repairs on their own or use independent repair shops or do DIY repairs.

Tackling Concentration in Meat/Poultry Production

On the heels of Biden's signature officially inking the executive order late last week, USDA said the President’s actions will also level the playing field for family farmers and ranchers, rolling out another effort to combat what the administration sees as anti-competitive actions in the meat marketplace.

During a trip to Council Bluffs, Iowa, Friday, Agriculture Secretary Tom Vilsack announced USDA is making significant investment to expand processing capacity and increase competition within meat and poultry processing. USDA says the efforts, which come in the form of $500 million in new funding, will also make agricultural markets more accessible and fair.

“The COVID-19 pandemic led to massive disruption for growers, food workers, and consumers alike,” Vilsack said during the announcement Friday. “It 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. To shift the balance of power back to the people, USDA will invest in building more, better, and fairer markets for producers and consumers alike.”

Mixed Reactions within Agriculture

Wiesemeyer says the biggest takeaway from Friday's announcement is where Biden will continue to prioritize his efforts, with the Executive Order reinforcing the Biden Administration's focus. 

"When Vilsack was Secretary under the Obama administration, he concentrated on the 80% of producers who produced only 20% of the production and agriculture," says Wiesemeyer. "Then, he got a lot of flack and went in reverse. He then he focused on the 20% of the very efficient producers who produced 80% of the production. This tells me he and the Biden administration are focusing back again, on the 80% of producers who produce only 20% of their production. There's no right or wrong answer on this one. This is just their focus. Big is bad right now. That's what the Order tells me."

Immediately after the Order was signed, many livestock groups, including National Cattlemen's Beef Association (NCBA), praised the President's focus on meat and poultry.

"NCBA’s top priority in Washington is pushing for policies that strengthen the business climate for our producers,” said vice president of government affairs Ethan Lane. “We thank President Biden and Secretary Vilsack for the leadership and swift action they've shown on some of the top issues impacting our producers, including ‘Product of the USA’ labeling and grants to expand regional, independent processing capacity. Today’s executive order is a vital next step toward securing a steady beef supply chain, and increasing opportunities for profitability for our producers. We have actively engaged the administration on these issues thus far, and we will continue to advocate for the needs of American cattle producers as the rulemaking processes begin.”

The American Farm Bureau Federation (AFBF) released a statement, saying AFBF would examine the details of the order, and work with the administration "to ensure changes are consistent with our grassroots policy, and farmers and ranchers are provided greater flexibility to remain competitive in our growing economy." 

The North American Meat Institute, which represents meat and poultry producers, says it remained opposed to changes in the act the Biden Administration was seeking to amend, saying "Government intervention in the market will increase the cost of food for consumers at a time when many are still suffering from the economic consequences of the pandemic."

National Chicken Council President Mike Brown said his industry is "one of the least consolidated" in U.S. agriculture, and he called the order "surprising," given Biden's "long history of support for the chicken industry."

Senator Chuck Grassley (R-IA)  also issued a statement saying he was quote "glad the Biden administration is particularly beefing up enforcement and expanding transparency in the livestock markets."

Mixed Reactions Outside of Agriculture

Outside the meat sector, groups also applauded the President's plan to combat "big business and big ag;" however, not everyone was in favor of the sweeping Executive Order.

"The Executive Order is built on the flawed belief that our economy is over concentrated, stagnant, and fails to generate private investment needed to spur innovation," said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce.  

The National Association of Manufacturers said today’s executive order threatens to "undo our progress by undermining free markets."

Equipment Industry Pushes Back

Association of Equipment Manufacturers (AEM) told Farm Journal that while the “Right to Repair” topic was addressed in the Order, the title is misleading, as equipment owners can already perform most repairs on their equipment.

“Equipment manufacturers have always supported farmers’ right to repair their own equipment and remain committed to providing them with tools and information needed to reduce downtime and maximize productivity. President Biden’s Executive Order does not change that," says Stephanie See, director of state government relations, Association of Equipment Manufacturers. "Farmers can already perform most repairs on their equipment. In some rare cases, where access to proprietary source code is necessary, a certified service technician may need to perform the repairs. Equipment manufacturers do not, however, condone illegal tampering, including modifications that are illegal, unsafe, and harmful to the public and the environment. We look forward to working with the Federal Trade Commission as they consider next steps and look forward to sharing our perspective with them in the coming weeks.“

Most equipment manufacturers shied away from responding to Biden’s Order, as Wiesemeyer says, “sometimes no PR is good PR,” but Wiesemeyer says the “right to repair” issue is one that’s not over, as it’s possible the issue will be challenged in court.

"The opponents of this your ‘right to repair’ tell me that it's also the right to damage, and to that point, these things are very complex,” says Wiesemeyer. “I think you could find this particular topic into the courts, as with a number of these items in the Order. We're in a litigious society, and nowadays, that’s on steroids. And I think a number of these things, if implemented, will go to court, some in the railroad area, where it gets into the levels of what they can charge, surcharges, etc, as well as the ‘right to repair.’”

While John Deere didn’t comment after the Order was signed at the White House, just days before it was signed, John Deere told Farm Journal less than 2% of all repairs require a software update, which means the majority of repairs farmers need to make, can be made themselves.

"We lead our industry in providing repair tools, spare parts, information guides, training videos and manuals needed to work on our machines, including remote access for technicians to provide long-distance help," said Deere. "John Deere does not support the right to modify embedded software due to risks associated with the safe operation of the equipment, emissions compliance and engine performance."

Biden's planned executive action comes as a bill in Congress, the Fair Repair Act, would allow the FTC to penalize companies which block consumers from repairing products by limiting access to replacement parts.

Digging up the Details 

Wiesemeyer says more details will need to be released before anything is filed with the Federal Register. He says those details will be key moving forward. He says part of the concern with some agricultural groups is what "unintended consequences" could result from the large Executive Order.

"Looking at history, when government gets too involved in an industry, and they frequently do, they'll muck it up, there will be unintended consequences," says Wiesemeyer. "I'm not saying that will be the case this time, but by their history of trying to right wrongs, and that doesn't have a good history to it. So, I think we all need to see details. But anytime you expand the potential market that livestock, poultry and dairy can go to, I think that's a good thing. The concern I have is if these new entities are not adequately financed for the long haul, the first major downturn in the marketplace in the meat processing, they usually fold. I mean, that's what history clearly says. So it's just not starting them up. It's continuing to support them with resources."

 

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