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Is the Fox Watching the Hen House?

By John Stencel

How is it that the U.S. Department of Agriculture (USDA), which was established with the purpose of helping farmers and ranchers, has become the department dedicated to enriching multinational corporations and ensuring that their share prices rise?

While not all divisions and certainly not all employees of USDA are oriented in this manner, recent USDA actions speak louder than words. Many of its recent positions benefit corporate agribusiness at the expense of family producers and consumers. Here are just a few examples.

USDA continues to drag its feet and secretly hope for congressional delays for implementation of country-of-origin labeling (COOL) for food, a provision mandated in the 2002 farm bill. Consumer surveys show overwhelming support of mandatory COOL even if it results in slightly higher retail prices. American producers believe mandatory COOL is an important marketing tool for them. The only sector opposing it is the food processing industry, which knows U.S. consumers will change their buying once a pound of hamburger is labeled as “meat from Canada, Australia, and 11 other countries.”

Another damming example is the Government Accountability Office (GAO) report released Dec. 12, 2005, on multiple and severe problems with the Livestock Mandatory Price Reporting (LMPR) program, which is critical to livestock producers who use them to make production and market decisions. The GAO report, which evaluated 844 audits, found that packers incorrectly reported or failed to report all required information 64 percent of the time. Worse yet, the report showed that USDA official took an average of 85 days to ensure packers made the needed corrections. Marketing data that is 85 days old is worthless, yet two-thirds of meat processors were falling down on this required reporting without penalties from USDA!

In addition to these LMPR shortcomings, USDA’s Grain Inspection and Packers and Stockyards Administration (GIPSA), for more than a decade, has refused to seriously investigate anti-competitive behavior in the meat packing industry. The same GAO report that criticized USDA’s performance on enforcing LMPR, documented USDA officials blocking employees from pursuing investigations of anticompetitive actions, which are illegal under the Packers and Stockyards Act.

Again, these USDA actions benefit corporate agriculture, while widening the price spread between farmers and consumers.

Another example that has slipped under the radar and is largely unknown to the general public is the proposal to change the definition of cheese. In January, the Food and Drug Administration, without a peep of protest from USDA, proposed to amend the definition of milk used in cheese. In essence, the FDA and USDA are using a complicating rule-making process to allow for a less nutritious product (ultra-filtered milk) to be used for making cheese in lieu of regular milk. If the new rules pass, the label consumers see would have no indication that a lesser product was used in production of their cheese.

This is yet another example of regulatory agencies using the rules-making process to benefit processors at the expense of consumers and producers. Ultra-filtered milk is cheaper, which saves cheese processors money and enables them to increase their profit margins. Many see the proposed rule change as a backdoor way to import more dairy products and drive down the price of U.S. milk, as ultra-filtered milk is produced by places such as India, South America and Australia.

Rocky Mountain Farmers Union, through its affiliation with National Farmers Union, has sent letters opposing the ultra-filtered milk proposed rule change, as well as other measures that hurt consumers and producers in order to benefit corporate agriculture. Consumers need to be aware of these assaults on their health and pocketbooks. Producers, as well, need to fight back. USDA’s priorities are wrong and we need to let them know what we think!