AFF Sentinel Vol.4#33

Congressional Slight of Hand

If a cadre of activist lawyers got together -- using the now-familiar Endangered Species Act strategy of utilizing legal technicalities to paralyze the normal operations of an industry - they would design something like the convoluted and insidious maze known as Senate Bill 622 (Sen. Thomas Harkin, D-Ia).

The bill would guarantee lawyers lots of work -- dragging the beef and pork industries back several decades in the process. Wading through 30 pages of legal language, references to existing laws and strange definitions exposes a lawyer-politician's way of accomplishing things while obscuring what he's really doing. Illusionists call it slight of hand.

Part of the subterfuge is bill construction. First comes a set of definitions. Second are the legal prohibitions. The prohibitions might not sound too onerous, until one re-reads the definitions and realizes the wide scope of the legislation.

The crux of the bill is similar to what's already on the books, prohibiting "an unfair, unjustly discriminatory or deceptive act, device or anti- competitive practice" regarding "marketing, receiving, purchasing, sale or contracting for the production of any agricultural commodity by any covered person ..." The devil is in the definitions.

For example "contractor," presumably aimed at poultry processors, is defined as a person that "owns, or will own, an agricultural commodity that is produced by a contract producer." Defined that broadly, that also sounds a lot like a custom cattle feeding customer. "Contract producer," again apparently aimed at contract poultry producers, is defined as a "producer that produces an agricultural commodity under a production contract." Sounds like a custom cattle feeder. The wide loop is bolstered later by the definition of a production contract to include the "provision of a management service relating to the production of an agricultural commodity..." That could even snare the nutritionist!

Their definition of "handler" includes processors who acquire agricultural commodities from producers or "associations of producers." Fair enough. But it also includes anyone "contracting or negotiating contracts or other arrangement, written or oral, with or on behalf of producers or associations of producers with respect to the production or marketing of an agricultural commodity ..." That means alliances could be viewed under this legislation as "handlers."

The bill would create another Office of Special Counsel for Competition Matters within USDA (the Department of Justice already has such an office) with a fleet of attorneys to investigate and prosecute P&SA violations. It is a political appointment by the president, confirmed by the Senate. More lawyers, more lawsuits. If they run out of lawyers, there are provisions to hire outside attorneys.

There are no specifics regarding whom this prosecutor answers to. He would also serve as liaison to Justice and the FTC. The potential is there for a president with a big-government, anti-business, socialist bent like Hillary or Barack appointing an independent prosecutor to disassemble the packing, processing, retail and foodservice infrastructure developed over decades. How? Read on.

In P&SA's Section 202, regarding "unfair, unjustly discriminatory or deceptive" practices, clauses would be inserted making it unnecessary to prove "a competitive injury" or prove that it "otherwise adversely affects competition and regardless of any alleged business justification." (Can you say "Tyson vs. Pickett?") As one observer said, anti-trust suits could be pursued just because someone feels there is a chance of an abuse. What kind of justice requires no proof of injury or offense?

Though separated by 20 pages, these two provisions taken together alone would keep attorneys and radical "victims" busy for years.

Section 202 (b) of the P&SA already prohibits a packer from giving "any undue or unreasonable preference or advantage to any particular person or locality in any respect." So what's the catch? For one, the very end of this bill specifies that within 180 days, the Ag Secretary will promulgate regulations, "including providing a definition of the term `unreasonable preference and advantage,'" for 202 (b). So it goes beyond vastly extending whom P&S regulates.

The bill would force a re-definition of the standards P&S has been using for decades regarding preferences, presuming, given the tenor of this bill, to outlaw anything but the same price to everyone for all cattle, regardless of quality, type or location. Another clause "strictly prohibits" any preferences or price differences based on volume, except those that "reflect actual, verifiable lower costs of acquiring livestock from volume preferences." Who verifies that, what volumes, who validates the claims and what constitutes proof?

Next time: The rest of S. 622's Lawyer's Market Development plan.

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