U.S. Agriculture Secretary Tom Vilsack announced new steps the Department of Agriculture is taking to recenter U.S. agriculture and benefit small and midsized operations, including a proposed new “Product of USA” labeling rule and an $89 million expansion of the USDA intermediary lending program.
At the National Farmers Union Conference in San Francisco, Vilsack also discussed creating a new “seed liaison” in the department to increase fairness in the commodity biotech industry, and proposed changes to the Packers and Stockyards Act.
The Packers and Stockyards Act governs competition in the livestock and poultry industries and prevents unfair market manipulation or consolidation.
“It’s part of a concerted effort to create another model. One that doesn’t necessarily require us to not produce — we want to produce what the world needs us to produce — but one that creates more revenue opportunities within that same small and midsize farming operation.”
Vilsack said American farmers are facing with land consolidation and declining returns. He said that despite record farm income in 2022, 50% of farms nationwide brought in negative farm income.
The secretary added that while 10% of farms made a net profit, nearly 40% of these profitable farms were owned by investment banks and large landholders who bring in more than $1 million per year in revenue.
Vilsack attributed this imbalance to the “get big or get out” structure of production- based agriculture, which took hold in the 1970s. He noted that his predecessor, former Agriculture Secretary Sonny Perdue, was honest about this reality. Yet Vilsack said the approach is one he refuses to accept.
“That does raise the question of what do we do,” Vilsack said. “This is the game, but it’s based on production. I think we’ve got to develop a new game. A game where farmers can not only raise crops and sell them, and raise livestock and sell them, and get government payments, but they can get other ways to make money from the same landmass.”
Vilsack announced new investments in diversifying local and regional meat processors, including $89 million in guaranteed loans through USDA’s intermediary lending program.
The loan program will provide credit to independently owned and operated meat processing facilities to expand or purchase equipment. The investment comes in addition to the more than $100 million being invested in grants this year to expand processing supply chain capacity.
Vilsack also mentioned a USDA rule proposed Monday that would alter the criteria for a product to use a “Product of USA” label. The secretary noted that while producers voluntarily put this label on packages for marketing purposes, prior criteria only required that labeled food products be processed in the United States. As such, the primary agricultural product could be grown, slaughtered, or raised outside the country.
Vilsack said that the new rule would require goods that use a “Product of USA” label to have their whole production cycle based in the United States.
Vilsack added that USDA will also partner with the U.S. Patent and Trade Office on a task force designed to limit unnecessary trait-stacking in genetically modified seeds and encourage seed market competition. Concerning the USDA’s proposed changes to the Packers and Stockyards Act, and efforts to bring increased fairness to the meat industry.
The USDA expects to push through four new rules related to the act over the next two years, which would drive market competition and open space for small and mid-sized producers to prosper.
The first rule would require increased financial disclosures for large-scale processors and integrators in the poultry supply chain.
A second rule would prohibit large-scale operations from retaliating against independent producers if these large commercial farms are reported to a regulatory agency.
Both those rules are expected to become law in 2023.
A third Packers and Stockyards rule would alter the structure of the tournament system in which poultry breeders are forced to compete over processor markets, and a fourth will address the scope of harms required to bring an unfair competition or injury claim under the Packers and Stockyards Act. Both are expected to become law in 2024.