White House invests $ 1 billion to boost competition in meat processing industry and lower consumer prices
President Joe Biden held a virtual meeting with family and independent farmers and ranchers on Monday to discuss the administration’s new four-part plan.
“Farmers and ranchers are driven out of business – sometimes businesses that have been around for generations,” Biden said during the White House meeting. “It undermines their dignity, their respect and the family heritage that many of them have carried from generation to generation.”
The president blamed the price hikes largely on market distortion caused by international meat-processing conglomerates.
“As profits (of the top four meat processing companies) rise, the prices you see in grocery stores rise proportionately. The prices farmers receive for the products they put on the market are falling. This reflects the distortion of the market. for lack of competition, ”Biden said. “I have said it before and I will say it again: capitalism without competition is not capitalism. It is exploitation. This is what we see in the meat and poultry industries … now.”
Attorney General Merrick Garland and Agriculture Secretary Tom Vilsack also attended the meeting.
The announcement comes as food prices – especially for beef – are skyrocketing and inflation remains a major concern for the White House. Persistent global supply chain problems and the emergence of the Omicron variant of Covid-19 threaten to prolong this price hike.
“Over the past few decades, we’ve seen too many industries become dominated by a handful of large corporations that control most of the business and most of the opportunity – raising prices and decreasing options for American families, while removing small businesses and entrepreneurs, ”the White House said.
Beef prices in November were up 20.9% from a year earlier, according to the US Department of Labor, and grocery prices jumped 6.4%, the biggest increase year on year since December 2008. Consumer price inflation, which includes gasoline and other prices, increased 6.8% in the 12-month period ending in November, reaching its highest level in 39 years.
As part of the plan, the U.S. Department of Agriculture will provide up to $ 375 million in grants for independent processing plant projects, $ 275 million in partnership with lenders to provide loans and other support for businesses to improve access to capital, $ 100 million for workforce training, $ 50 million for technical assistance and research and development and $ 100 million to reduce overtime inspection costs to help small processing plants.
Funding will come from the $ 1.9 trillion Covid-19 emergency relief bill that Congress passed last year.
This year, the Biden administration announced it will issue tougher rules to tackle abuse by meat packers and processors, and release new labeling rules so consumers “can better understand where it’s coming from. their meat, “according to the White House.
Biden accused the Trump administration on Monday of weakening the Packers and Stockyards Act. This weakening of the law, Biden said, made “possible the abuses we are seeing now.”
“We will strengthen the law to make sure it works as intended,” he added.
The Justice Department and USDA also announced a joint initiative to coordinate their efforts and will launch a new portal to report concerns about potential violations of competition laws within 30 days.
“The joint channel that we are establishing will allow the USDA and the DOJ to work together, from the outset, on how to appropriately deal with such complaints when the complaints involve violations of antitrust rules,” Garland said at the meeting. White House event Monday.
After the plan was announced, the US Chamber of Commerce said in a statement on Monday it opposed what it called the administration’s “misguided” efforts to tackle high meat prices. .
“It’s pretty clear that the administration is trying to use higher prices to justify its pre-existing agenda to overturn decades of bipartisan consensus around antitrust and competition policy in favor of a regulatory approach” the government knows the better, “” Neil Bradley, Speaker of the House policy director, said in the statement.
Bradley added: “It’s not economics, it’s politics and unfortunately such government intervention would likely limit supply further and push prices even higher.”
CNN’s Matt Egan and Nikki Carvajal contributed to this report.