Federal Policy Update

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AGRIBUSINESS ADMITS THAT THE FOOD SYSTEM IS BROKEN. . . BUT NOT WHY

In late April, Tyson Foods took out full-page advertisements in The Washington Post and The New York Times warning that the country’s food supply chain is “breaking” amid continued lockdowns aimed at slowing down the coronavirus pandemic.

The advertisement consisted of a letter from John Tyson, chairman of the board. He warned that consumers would face shortages at the grocery stores, while “farmers across the na­tion simply will not have anywhere to sell their livestock to be processed, when they could have fed the nation.

“Millions of animals—chickens, pigs and cattle—will be depopulated because of the clo­sure of our processing facilities,” Tyson wrote. “The food supply chain is breaking.”

All of which is true, but misleading. A more accurate assessment is that the system is func­tioning exactly as it was designed to by Tyson and the other mega-corporations that effectively control the market through an oligopoly system. (This articles goes to print just after executives from two other major poultry companies were indicted for price fixing.)

What has happened with our food supply, in particular our meat supply, during the Co­vid-19 pandemic was not only predictable, but predicted. These predictions came not only from small-farm advocates like myself, but from the large industry players themselves.

Almost ten years ago, I attended a two-day conference hosted by the USDA that brought together federal animal health officials, state animal health officials and major industry orga­nizations; I was able to attend because of my role on the USDA Advisory Committee on Animal Health. The topic of the event was how to deal with “stop movement orders” if there were a foot and mouth disease (FMD) case diagnosed in the United States.

To explain the background: FMD is a disease that affects cloven-hooved ruminants (cattle, sheep, goats, hogs, etc.). It is not trans­missible to humans. But because it is said to be highly contagious and can severely affect livestock production, any country that has a diagnosed case faces extreme export restric­tions—which in turn damages the profits of the large companies that export livestock and meat. Governments have thus often adopted draconian policies to stop its spread and try to eradicate the disease. One of the first tools is a “stop movement order,” which would halt all transportation of livestock in the country, and which was the topic of this conference.

The speaker for the swine industry had pre­pared an extensive presentation, which included the following claim: If a stop-movement order is put in place, within a few days there will be millions of dead and dying hogs in this country.

I was baffled at these words. We were discuss­ing a hypothetical scenario in which there was only a single confirmed case of foot and mouth disease in this country, and the government stopped animal movements to prevent its spread. Was he discussing what would happen if FMD had spread to the major hog-raising facilities?

As he continued speaking, it became clear that he wasn’t saying that the animals would die from FMD. He was explaining that the animals live under crowded conditions and have been bred, fed and drugged so as to maximize their weight gain, that if they could not be moved out of the facilities at exactly the right time, the over­crowding and physiological stress would start killing them. (He didn’t use those exact words, of course, but he was very clear about the issues.)

When we started breakout group discus­sions, I raised what I thought was the obvious question: If the system is so fragile, shouldn’t we talk about how to change the system so that it is more resilient? I was told that that wasn’t our task—we were there to discuss how to minimize the damage caused by a stop movement order while also preventing the spread of FMD.

In other words, almost a decade ago (and probably many years before that), the industry and government officials all knew that a disrup­tion to the transportation chain would cause the death of millions of animals, with resulting farmer bankruptcies and skyrocketing meat prices. Such a disruption could have come from FMD reaching our shores, or from a crisis that caused a sudden extreme increase in the price of oil, or multiple severe climate events at one time, or any number of other events. . . such as a disease spreading among the people working in dangerous and unsanitary meatpacking plants.

They knew. And they chose to do absolutely nothing to change the system. If anything, in the intervening years, they have made it even more fragile, with even greater consolidation of operations and the perpetual drive to maximize profits at the expense of farmers, workers, the environment and consumers. They developed and refined a “just in time” system for raising animals and getting them to slaughter, perpetu­ated government policies based on the philoso­phy of “get big or get out” and sacrificed every other interest on the altar of corporate profits and supposed efficiency, touting the cheapness of the food as the symbol of their success.

Tyson’s advertisement was intended to scare the American public into supporting measures to bail companies like Tyson out of the situation they have created. And it worked, at least in part. President Trump promptly issued an executive order finding that the slaughter­houses were essential and ordering them to stay open. Part of the executive order protected the companies from liability for their workers’ ill­nesses, allowing them to force people back into dangerous conditions without paying the price for their actions. Yet as workers have continued to fall ill by the hundreds, the packing plants have still had to close or reduce their operations, and we continue to face mounting numbers of animals killed and wasted, farmers in crisis, and shortages at grocery stores.

Isn’t it time we finally address the question I raised at that USDA meeting: How do we build a more resilient system, one that can absorb dis­ruptions whether they are from weather, disease or economic events?

The farmers and consumers in the Weston A. Price community have worked for many years to do that. But we are hampered by government regulations and policies that are ill-designed and often outright hostile to this work. Many changes need to be made, and it will take years of sustained effort to truly shift the system.

But at least the Covid-19 crisis has drawn attention to the issues, as well as to one of the solutions: the PRIME Act, HR 2859/S. 1620. This bill would remove the federal ban on the sale of meat processed at “custom slaughter­houses,” which are businesses that meet federal standards and are regulated by the state, but which are not required to have a HACCP plan or have an inspector on-site during processing. Those two distinctions not only make it much less expensive to operate a custom slaughter­house, but also remove many of the problems that the inspected slaughterhouses have due to unreasonable or arbitrary inspectors.

Another good bill has also drawn support in this crisis: New Markets for State-Inspected Meat & Poultry, S. 1720. This bill would re­move the federal ban on the sale of meat from state-inspected slaughterhouses across state lines; since these slaughterhouses meet the same standards as the federally inspected ones (including HACCP and having an inspector on-site), the ban has never made any sense. This bill is particularly helpful in building more regional markets. For a resilient food system, we need farms and infrastructure of all sorts and sizes, from very small farms selling direct to consum­ers locally to mid-size farms selling regionally and wholesale. Diversity, whether biological or economic, helps creates resilience.

As this article goes to print, the Senate is considering whether to include either of these bills in its next Covid-relief bill. Including them would be a significant step forward, both in helping farmers and consumers weather the immediate crisis and in building better systems for the future. Should the Senate fail to take action, however, we must simply keep trying. “Too big to fail” was a disaster in the banking industry—we cannot allow companies like Tyson to keep taking us down that road in our food system.

CHICKEN FARMER’S WHISTLEBLOWER CASE CAN PROCEED

One of the tools the large companies use to control the markets is “vertical integration,” in which they own the animals from birth to the store shelves. This is the dominant model in the poultry and swine industries, where most conventional farmers are “contract growers,” providing the land, building and labor to raise the chickens, but having no ownership of the animals and no real control over the process.

In 2015, one of the contract growers decided to pull back the curtain and expose what was going on. Craig Watts raised chickens under contract with Perdue, and he invited an animal welfare group to videotape the conditions in the poultry houses on his farm. He also spoke out about the poor health of the baby chicks that Perdue sent for raising, problems with feed quality and questionable practices with the use of antibiotics. These facts posed potentially sig­nificant food safety issues and were at odds with the claims Perdue was making in its advertising. Perdue’s reaction was to blame Watts and use its power—the fact that he had no other outlet for marketing chicken because of the corporate consolidation of our food system—to threaten his business.

Watts brought a whistleblower claim to the Department of Labor (DoL). Perdue responded that his claim had to be rejected because there are no whistleblower protections in the Poultry Products Inspection Act, the main law that governs chicken products.

The FDA then weighed in, arguing that the Food Safety Moderniza­tion Act’s (FSMA’s) whistleblower provisions applied. Unfortunately, the FDA’s main argument was that FSMA applied because live animals are part of the definition of “food” under FSMA.

The problem with saying that live animals are “food” (as opposed to being destined to become food) is two-fold. One, it expands the normal meaning of the language to increase the agency’s authority, which is bad precedent. Two, it would reduce the number of farmers who are exempt from the FSMA rules.

Why? Because the Tester exemption, for which we fought so hard, is based on the farmers’ gross sales of “food,” as well as whether they market primarily direct to consumers and local restaurants and retailers. So consider a small farmer who raises cattle to sell at the local livestock market but also raises vegetables to sell at the farmers market. Under the FDA’s interpretation of the law, if the sales of the produce and the cattle combined are over five hundred thousand dollars annually, then the farmer isn’t exempt—and would have to spend tens of thousands of dol­lars complying with FSMA’s Produce Safety Rule, even if the vegetable portion of their farm is very small and entirely direct-to-consumer.

I helped draft a legal brief on behalf of the Farm and Ranch Freedom Alliance, RAFI-USA and R-CALF USA, as amicus curiae, or friend of the court. We argued that the DoL did not need to find that live animals are “food” in order to hear the whistleblower complaint. Rather, FSMA clearly covers “animal feed” as well as the use of antibiotics in animals, both of which are among the issues Watts had raised.

In late May, the DoL’s Administrative Review Board issued its deci­sion, which was that Watts’ whistleblower complaint could go forward. Although the Board’s decision did not mention the amicus brief, it reflects the argument we made: Without deciding the question of whether live animals are “food” under FSMA, the board noted that FSMA clearly governs animal feed. And since Perdue provides the animal feed to the farmers who raise the chickens for them, the FSMA whistleblower provi­sions apply.

This is the best possible outcome. The farmer’s whistleblower case can now proceed, without reinforcing the FDA’s overreaching claim that live animals are food.

FOOD SAFETY MODERNIZATION ACT UPDATE:FLEXIBILITY FOR EXEMPT PRODUCE FARMERS AND TEXAS TROUBLES

And speaking of the Tester exemption, in late May the FDA an­nounced that during the Covid-19 public health emergency, it will provide flexibility on the criteria for farms to be “qualified exempt” under the Produce Safety Rule.

Under the Tester Amendment to the FSMA, produce farms are “quali­fied exempt” and do not have to meet many of the expensive, burdensome requirements of the Produce Safety Rule if:

1. The farm’s food sales averaged less than five hundred thousand dol­lars (as adjusted for inflation since 2011) per year during the previous three years, and

2. The majority of the farm’s sales, in dollar amounts, went to “quali­fied end users.” A qualified end user is either (a) the consumer of the food, or (b) a restaurant or retailer that is located within the same state or the same Indian reservation as the farm, or not more than two hundred seventy-five miles away, and which directly sells to or serves consumers.

Both of these elements are based on three-year rolling averages. In other words, to know if a farm has a qualified exemption in 2020, you would look at the average sales and to whom those sales were made in 2017, 2018 and 2019.

The closing of many restaurants and retail food establishments due to Covid could mean that a farm that normally would be qualified exempt may not meet the second part of the test. The FDA has issued a guid­ance document that allows farmers to shift their sales to other entities as needed, and still remain qualified exempt. For the duration of the Covid public health emergency, farms must meet the first prong of the test (the average annual food sales), but not the second in order to maintain their exemption. The current inflation-adjusted cut-off for average annual gross sales is about five hundred sixty-two thousand dollars.

FDA’s announcement is posted online at fda.gov/regulatory-information/search-fda-guidance-documents/temporary-policy-during-covid-19-public-health-emergency-regarding-qualified-exemption-standards. After the Covid emergency ends, FDA will issue additional guidance to establish how to calculate average sales to qualified end users under the second part of the test, since the sales during the emer­gency will affect the calculations for the next three years. Qualified exempt farms must keep specific records, as well as display their name and business address on the packaging or at the point of sale.

In other FSMA news: The Farm and Ranch Freedom’s lawsuit against the Texas Depart­ment of Agriculture (TDA) continues, and the agency’s responses to initial discovery requests reflect that it is doubling down on its overreach and unconstitutional claims of power.

There is no dispute that the Texas legisla­ture gave TDA the authority to implement the federal Produce Safety Rule in 2017. But in its discovery responses, the TDA claimed that it has the right not only to enforce the Produce Safety Rule, but also the authority to enforce general provisions of the Federal Food, Drug & Cosmetic Act. TDA asserts that it can come onto any farm, even those that are “not covered” under the federal Produce Safety Rule, at any “reasonable” time in order to inspect for what­ever the inspector believes could cause the food to be adulterated or misbranded. This is not what the law provides nor what the Texas Legislature intended to do.

After another round of discovery, the par­ties will most likely file motions for summary judgment, so a decision in the case is still several months away.

This article appeared in Wise Traditions in Food, Farming and the Healing Arts, the quarterly journal of the Weston A. Price Foundation, Summer 2020

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