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Packer Ownership Ban Would Hinder Marketing System

by 5m Editor
18 May 2007, at 11:20am

US - The government solution to a problem is usually as bad as the problem.” — Nobel Prize winning economist Milton Friedman, 1912–2006.

A staunch proponent of a free market system, Milton Friedman stressed the advantages of the marketplace and the disadvantages of government intervention. His adamant support for capitalism suggests he would likely be critical of proposals that are being considered for the 2007 Farm Bill. Specifically, debate is underway regarding the Competition Title of the new farm bill, which could have a dramatic impact on alternative marketing arrangements.

In testimony before the U.S. House of Representatives Committee on Agriculture’s Subcommittee on Livestock, Dairy and Poultry last month, RTI’s Mary K. Muth, said, “In general, the study found that the use of alternative marketing arrangements in the livestock and meat industries provides benefits not only to meat packers but also to livestock producers and meat consumers. Therefore, restricting their use would have negative economic consequences on most segments of the industry.”<

Five years ago during debate on the 2002 Farm Bill, a proposal was offered that would have banned packers from owning, feeding or controlling livestock more than 14 days prior to slaughter.

A proponent of banning packer ownership, Iowa Sen. Charles Grassley says, “Outlawing packer ownership of livestock would make sure the forces of the marketplace would work for the benefit of the farmer just as much as it does for the slaughterhouse. You could even say that packer ownership of livestock frustrates and compromises the marketplace, so the farmer doesn’t get a fair price.”

Source: Drovers

5m Editor