Proposed USDA rules aim to give contract poultry farmers more power against major meat processors

"The Agriculture Department proposed new rules on Thursday requiring poultry companies to be more transparent about how farmers are paid, part of the Biden administration’s broader push to tackle consolidation in the meatpacking industry," Patrick Thomas reports for The Wall Street Journal. "The White House has frequently accused the biggest U.S. meat companies of using their market power to increase prices for restaurants and supermarkets, while underpaying farmers. In January, the administration called for $1 billion to be dedicated to expanding independent meat processing to foster more competition in the industry, where the four largest companies control an estimated 85% of beef production and 54% of poultry, according to the White House."

Under the proposed rule, processors would have to tell farmers how they calculate pay, how many supplies are provided to growers, and how farmers rank in the performance-based "tournament system" that forces farmers to compete against each other to determine payment. The practice has been long criticized as abusive and opaque. "The department also said it planned to investigate whether certain companies should be more stringently regulated, and it announced $200 million in funding for independent meat processors to increase capacity at slaughterhouses," Linda Qiu reports for The New York Times.