AFF Sentinel Vol.4#34

Recipe for Legal Limbo...Return to the Dark Ages

Colorado Springs, CO Oct. 11, 2007

Last issue, we began examining Senate Bill 622, a template Sen. Harkin has indicated he wants inserted as a "Competition" Title in the new Farm Bill.

Besides creating a new, redundant, independent special prosecutor to enforce the Packers & Stockyards Act (P&SA), removing the need to prove injury or competition violations, and now covering livestock producers and feeders under P&SA, the bill would also remove any "business justification" clauses in the law. Then, the bill would force a re- definition of 'unreasonable preference and advantage' in Section 202 (b) of the P&SA, which already prohibits a packer from giving "any undue or unreasonable preference or advantage to any particular person or locality in any respect."

The clause refers to any particular "person," - normally to mean giving a particular individual preference. Not so. The bill defines "person" as "an individual, partnership, corporation, limited liability company, limited partnership or association." Through interlocking definitions of "association" and "association of producers" that appears to mean packers couldn't offer different prices to any alliance of cattlemen for their cattle, be they a breed association or production association, etc.

The bill spends a baffling seven paragraphs specifying all the ways processors and "handlers" cannot harass or intimidate producers who belong to an association - or not (can you say R-CALF?). It appears they are reserving that right for the government.

Additionally, the bill forbids packers to belong or "contribute financial or other support" to an association of producers. In other words, it would become illegal for packers to be associate members of a cattlemen's association or even to provide the meat for banquets at conventions. Besides outlawing packer participation in alliances or branded programs, it would apparently outlaw packer contributions to the checkoff. And as "handlers," and "covered persons," auction markets could no longer provide support by collecting the checkoff, if the Cattlemen's Beef Board is an "association of producers." How much help can we stand from our government? (Can you say Dark Ages?)

The bill mandates a specific cover page and 13 items required in a production contract - as if private lawyers need help in writing contracts.

Yet when it comes to specifying and defining the crux of their own bill, incredibly, they flat chicken out. They pass off redefining "unreasonable preference" in the P&S Act - as in packers paying different prices for different cattle or hogs - to the Secretary. Explaining what their own bill means in "determining whether an act, device or anti-competitive practice ... is unfair," the bill preposterously provides a "court may consider" whether a "reasonable person" would consider the practice unfair!

All this kind of mumbo jumbo for violations that are federal offenses, subject to injunctions and restraining orders for cattlemen. And a contractor shall be subject to "personal jurisdiction" in the state in which the producer resides. It would take a legal expert to divine the full implications of that last but it certainly sounds ominous, given the broad scope and the vague legal haze created.

The capper is the Big Brother provision you'd think only a centrally planned socialist or communist party politburo could dream up. No part of a marketing contract could be confidential, unless it involves a trade secret. In other words, if you are a widget producer, you can negotiate and sign a contract in a meeting room with your client. But if you are a beef or pork producer, that is verboten. Komrades at every level of government, the party and the mother's club must be allowed to know what you are doing.

By passing off the jobs of defining what are vague and subjective terms to the Secretary and the courts' mythical "reasonable person," this bill would subject the marketing of beef cattle to an absolute circus of ridiculous lawsuits, creating unprecedented turmoil and uncertainty in the industry. Key frameworks for 21st century beef quality, marketing and safety would be destroyed.

At best, any kind of contracting would be subject to government rules and regulations, harassing lawsuits and huge cost increases. At worst, producers and feeders would be forced back to the days of verbal deals and a handshake - but for secrecy and protection. You'd better know whom you're shaking with, or you could be ratted out to the government or sued on any livestock deal.

The biggest losers of all would be consumers, with the quality, supply and consistency of their product severely compromised. Harkin, Enzi, Feingold, Thomas, Dorgan, Baucus and McCaskill and Congress would crown the only real winners - attorneys.

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