# Inclusive Competition and Market Integrity Under the Packers and Stockyards Act > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2022-21114 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** October 3, 2022 - **Citation:** 87 FR 60010 ## Text DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 9 CFR Part 201 [Doc. No. AMS-FTPP-21-0045] RIN 0581-AE05 Inclusive Competition and Market Integrity Under the Packers and Stockyards Act AGENCY: Agricultural Marketing Service, Department of Agriculture (USDA). ACTION: Proposed rule. SUMMARY: The U.S. Department of Agriculture's (USDA) Agricultural Marketing Service (AMS) is soliciting comments on proposed revisions to the regulations under the Packers and Stockyards Act, 1921. The proposal would prohibit certain prejudices against market-vulnerable individuals that tend to exclude or disadvantage covered producers in those markets. The proposal would identify retaliatory practices that interfere with lawful communications, assertion of rights, and associational participation, among other protected activities, as unjust discrimination prohibited by the law. The proposal would also identify unlawfully deceptive practices that violate the Packers and Stockyards Act with respect to contract formation, contract performance, contract termination, and contract refusal. The purpose of the rule is to promote inclusive competition and market integrity in the livestock, meats, poultry, and live poultry markets. DATES: Comments must be received by December 2, 2022. ADDRESSES: Comments must be submitted through the Federal e-rulemaking portal at https://www.regulations.gov and should reference the document number and the date and page number of this issue of the Federal Register . AMS strongly prefers comments be submitted electronically. However, written comments may be submitted ( i.e., postmarked) via mail to S. Brett Offutt, Chief Legal Officer, Packers and Stockyards Division, USDA, AMS, FTPP; Room 2097-S, Mail Stop 3601, 1400 Independence Ave. SW, Washington, DC 20250-3601. All comments submitted in response to this proposed rule will be included in the record and will be made available to the public. Please be advised that the identity of individuals or entities submitting comments will be made public on the internet at the address provided above. Parties who wish to comment anonymously may do so by entering “N/A” in the fields that would identify the commenter. FOR FURTHER INFORMATION CONTACT: S. Brett Offutt, Chief Legal Officer/Policy Advisor, Packers and Stockyards Division, USDA AMS Fair Trade Practices Program, 1400 Independence Ave. SW, Washington, DC 20250; Phone: (202) 690-4355; or email: s.brett.offutt@usda.gov. SUPPLEMENTARY INFORMATION: Outline of the Notice of Proposed Rulemaking I. Introduction (Statutory Authority) A. Background to This Rulemaking B. Previous Rulemakings II. Undue Prejudices or Disadvantages and Discriminatory Practices A. Agency Interpretation of Undue or Unreasonable Prejudice or Disadvantage and Unjust Discriminatory Practices B. Prohibited Undue Prejudices or Disadvantages and Unjust Discrimination—Proposed § 201.304(a)(1)—Generally i. Authority Provided by the Act ii. Economic Rationale iii. Specific Proposed Protected Bases C. Cooperatives—Proposed § 201.304(a)(2) D. Enumerated Undue Prejudices E. Retaliation i. Retaliation as Discrimination Under the Act ii. Economic Rationale F. Prohibition on Retaliation—Proposed § 201.304(b) G. Bases of Protected Activities—Proposed § 201.304(b). i. Assertion of Rights ii. Associational Participation iii. Lawful Communications H. Delineation of Protected Activities I. Recordkeeping—Proposed § 201.304(c) J. Request for Comments III. Deceptive Practices A. Scope of Deceptive Practices Regulated B. Deceptive Practices in the Formation of Contract C. Deceptive Practices in the Operation of Contract D. Deceptive Practices in the Termination of Contract E. Deceptive Practices in Refusal To Deal F. Request for Comments IV. Severability V. Required Regulatory Analyses VI. Request for Comments I. Introduction and Regulatory Background The rise of vertically integrated contract agriculture and highly concentrated local markets in livestock and poultry over the last four decades have increasingly left many producers and growers (hereinafter producers, unless otherwise noted) vulnerable to a range of practices that unjustly exclude them from and undermine their economic opportunities in the marketplace. The regulatory toolkit embodied in the Packers & Stockyards Act, as amended (P&S Act or Act) (7 U.S.C. 181 et seq. ), has not been deployed to keep pace with these issues. AMS is proposing this regulation to enhance those basic protections that modern livestock and poultry producers need to promote inclusive competition and market integrity. We invite comment on a range of questions in this proposal. Specifically, AMS is proposing to: • Prohibit, as undue prejudices, disadvantages, and adverse actions against “market vulnerable individuals” who are at heightened risk in relevant markets; • Prohibit, as unjust discrimination, retaliatory and adverse actions that interfere with lawful communications, assertion of rights, associational participation, and other protected activities; • Prohibit, as deceptive practices, regulated entities employing pretexts, false or misleading statements, or omissions of material facts, in contract formation, contract performance, contract termination, and contract refusal; and • Require recordkeeping to support USDA monitoring, evaluation, and enforcement of compliance with aspects of this rule. AMS is proposing these modernized regulations under the Act's provisions prohibiting undue prejudice, unjust discrimination, and deception to provide for clearer, more effective standards to govern the modern marketplace and to better protect, through compliance and enforcement, individually harmed producers and growers. Enacted in 1921 “to comprehensively regulate packers, stockyards, marketing agents and dealers,” 1 the P&S Act, among other things, prohibits actions that hinder integrity and competition in the livestock and poultry markets. Section 202(a) of the Act states that it is unlawful for any packer, swine contractor, or live poultry dealer to engage in or use any unfair, unjustly discriminatory, or deceptive practice or device. 2 Section 202(b) of the Act states that it is unlawful for any packer, swine contractor, or live poultry dealer to make or give any undue or unreasonable preference or advantage to any particular person or locality, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect. The Secretary of Agriculture (Secretary) has delegated the responsibility for administering the P&S Act to AMS. Within AMS, the Packers, and Stockyards Division (PSD) of the Fair-Trade Practices Program has responsibility for the day-to-day administration of the P&S Act. The current regulations implementing the P&S Act are found in title 9, part 201 of the Code of Federal Regulations (CFR). Section 407 of the P&S Act (7 U.S.C. 228) provides that the Secretary “may make such rules, regulations, and orders as may be necessary to carry out the provisions of this Act.” This proposed rule, if finalized, would amend 9 CFR part 201. 1 Hays Livestock Comm'n Co. v. Maly Livestock Comm'n Co., 498 F.2d 925, 927 (10th Cir. 1974). 2 7 U.S.C. 192(a). A. Background to This Rulemaking Congress enacted the P&S Act after many years of concern about farmers and ranchers being cheated and mistreated. At the time, Congress worried that the five very large meatpackers' control over the nation's food supply tended toward monopolization, which could put economic opportunity for producers and their communities at risk, destroying individual economic opportunity for producers and smaller food businesses and harming rural communities, among other harms. 3 Moreover, Congress believed that existing antitrust and market regulatory laws, including the Sherman Act and Federal Trade Commission Act, did not sufficiently protect farmers and ranchers. 4 Accordingly, in the P&S Act, Congress gave the Secretary of Agriculture broad authority to regulate the meatpacking industry. The House of Representatives' report on the P&S Act stated that it was the “most comprehensive measure and extends farther than any previous law in the regulation of private business, in time of peace, except possibly the interstate commerce act.” 5 The Conference Report on the P&S Act stated that: “Congress intends to exercise, in the bill, the fullest control of the packers and stockyards which the Constitution permits . . .” 6 3 See 61 Cong. Rec. 1860 (1921) (House Floor Debate). 4 See, Shively, J. and Roberts, J., “Competition Under the Packers and Stockyards Act: What Now?” 15 Drake Journal of Agricultural Law 419, 422-423 (2010); and Current Legislation, 22 Columbia Law Review 68, 69 (1922). 5 House Report No. 67-77, at 2 (1921). 6 House Report No. 67-324, at 3 (1921). In the early 1900s, meat packing in the United States was highly concentrated, with approximately 50 to 70 percent of the beef packing industry controlled by the industry's “Big Five:” Armour, Cudahy, Morris, Swift, and Wilson. 7 A 1918 Federal Trade Commission (FTC) meat industry investigation found that in 1916 the Big Five controlled the slaughter and processing of 82 percent of cattle, 79 percent of calves, 87 percent of sheep, and 63 percent of swine in the U.S. 8 Those five dominant operators also controlled an interlocking network of the feed mills, stockyards, and transportation infrastructure that supported the industry. As extensively documented in a report by the FTC, which set the stage for Congressional passage of the P&S Act, those five packers deployed from their positions in that market structure a range of practices to further entrench their dominance. 9 7 Mathews, K. H. Jr., W. F. Hahn, K. E. Nelson, L. A. Duewer, and R. A. Gustafson. April 1999. U.S. Beef Industry: Cattle Cycles, Price Spreads, and Packer Concentration. U.S. Department of Agriculture, Market and Trade Economics Division, Economic Research Service. Technical Bulletin No. 1874. 8 Federal Trade Commission. 1918. Annual Report for 1918, p. 23., available at ftc_ar_1918.pdf (last accessed 8/9/2022). 9 Id. At that same time, the Department of Justice (DOJ) brought enforcement cases under the Sherman Act against the packing industry, which resulted in a series of consent decrees (judicially overseen agreements) that restructured the market. 10 The consent decrees, together with the adoption of the P&S Act, reformed market practices by eliminating packer ownership of cattle and their means of transporting it, and reinforced market structures that—for a period of time in the 20th century—secured open, fair marketplaces for all, such as terminal auction yards regulated as stockyards by the Packers and Stockyards Administration of USDA. 11 By 1963, the four-firm concentration ratio (the standard economic tool used to evaluate the degree of concentration in markets) had fallen to 26 percent in beef and 33 percent in hogs. 10 United States v. Swift & Co., Equity No. 37623, (Sup. Ct. of D.C. 1920). 11 Harl, Agricultural Law, sec. 71.03 (1993). Amidst slowing demand in the beef and hog sectors, the dramatic growth of demand in the poultry industry, technological advances and increased returns to scale in meat processing, and a decline in Federal antitrust and fair markets enforcement, concentration returned to the meat packing industry. 12 Between 1980 and 2020, the four-firm concentration ratio grew from 36 percent to 81 percent in beef packing (steers and heifers) and rose by 34 percent to 64 percent in hogs. 13 Between 1977 and 2020, the four-firm concentration ratio in the poultry broiler industry increased from 22 percent to 53 percent. 14 12 MacDonald, J.M., M. E. Ollinger, K. E. Nelson, and C. R. Handy. Consolidation in U.S. Meatpacking. Food and Rural Economics Division, Economic Research Service, U.S. Department of Agriculture. Agricultural Economic Report No. 785. Available at https://www.ers.usda.gov/publications/pub-details/?pubid=41120, accessed 9/19/22. 13 U.S. Department of Agriculture, Agricultural Marketing Service., Packers and Stockyards Division, Annual Report. Various years. 14 U.S. Department of Agriculture, Agricultural Marketing Service, Packers and Stockyards Division, Annual Report, 2020. 2021 draft pending as of 07/11/22. United States Department of Agriculture Grain Inspection, Packers and Stockyards Administration. “Assessment of the Livestock and Poultry Industries Fiscal Year 2007.” May 2008. The above data reflects the state of concentration nationally, but concentration in local markets that exceeds national averages has been observed in the poultry, hog and pig, and cattle industries. In the last available survey of local markets (2011), MacDonald and Key found that about one quarter of contract growers reported that there was just one live poultry dealer in their area; another quarter reported two; another quarter reported three; and the rest reported four or more. 15 Regional concentration is often higher than national concentration for hogs. 16 And in cattle, based on AMS's experience conducting investigations and monitoring markets, there are commonly only one or two buyers in some local geographic markets, and few sellers have the option of selling fed cattle to more than three or four packers. 15 MacDonald, James M. “Technology, Organization, and Financial Performance in U.S. Broiler Production ,” EIB-126, U.S. Department of Agriculture, Economic Research Service, June 2014. 16 Wise, T. A., S. E. Trist. “Buyer Power in U.S. Hog Markets: A Critical Review of the Literature,” Tufts University, Global Development and Environment Institute (GDAE) Working Paper No. 10-04, August 2010, available at: https://sites.tufts.edu/gdae/files/2020/03/10-04HogBuyerPower.pdf.TAbl (last accessed 8/9/2022). The move towards heightened concentration was accompanied by a dramatic shift from the spot market towards various types of vertical contracts. In the early 20th century, farm-finished cattle and hogs were primarily shipped by rail and slaughtered in urban centers close to large consumer bases, and fresh meat was rail-shipped only by the largest packers. Prices for cattle and hog purchases were largely negotiated in spot, cash markets in person. In 1921, poultry consumption accounted for a small share of total U.S. meat consumption, and retail distribution outlets ( i.e., local food markets) were not centralized. In successive decades, as concentration in the industry increased and as the size of plants increased, large packers needed to ensure constant and secure supplies of animals to keep these larger plants running at peak capacity. 17 Buying animals through contracts with producers was believed to facilitate their ability to do so. Vertical contracts took the form of production, marketing, and forward contracts. 17 MacDonald. J. M. and W. D. McBride. The Transformation of U.S. Livestock Agriculture: Scale, Efficiency, and Risks. January 2009. Economic Information Bulletin No. (EIB-43). Available at https://www.ers.usda.gov/webdocs/publications/44292/10992_eib43.pdf?v=0, accessed 9-20-2022. Livestock and poultry production contracts are agreements between a producer and a contractor, where the livestock (generally hogs) or poultry are grown by a grower on behalf of the contractor under specific guidelines (production practices or target weight, for example) identified in the contract. The producer is generally paid a contract fee by the contractor for growing the livestock or poultry. Once the livestock or poultry reach a specific weight, they are often marketed to a packer or live poultry dealer under a marketing contract, though they could also be marketed on the spot market. Under a marketing contract, the ownership of the livestock or poultry (mostly livestock) remains with the producer until they are ready to be marketed to a packer or live poultry dealer. A marketing contract is an agreement between a producer and a packer or live poultry dealer that identifies a price (or a pricing formula), quantities/qualities, and a delivery schedule for the livestock or poultry to the packer or live poultry dealer. A forward contract is a specific type of marketing contract (generally for livestock) under which a specific group of livestock is negotiated for sale by a producer or contractor to a packer several months in advance of delivery of the livestock. The producer or contractor and packer agree to the delivery month and pricing method for the specific group of livestock to be delivered. The producer generally picks the day of delivery in the delivery month. The growth of these vertical contract relationships, in the context of highly concentrated markets, has led to concerns that firms have greater control over producers and thus have more ability to abuse their market power, impede producer choices, exclude some market participants, and coerce producers unwittingly into inefficient farm decisions. 18 Many have expressed concern that the decline in the use of spot markets to market livestock has also led to harder-to-quantify losses of independent ways of life, adversely impacting rural economies and communities. 19 18 Hendrickson, M.K., and H.S. James, Jr. 2005. “The Ethics of Constrained Choice: How the Industrialization of Agriculture Impacts Farming and Farmer Behavior.” Journal of Agricultural and Environmental Ethics, 18: 269-291. In: Hendrickson, M., James, H., Heffernan, W.D. 2013. “Vertical Integration and Concentration in U.S. Agriculture.” In: Thompson, P., Kaplan, D. (eds) Encyclopedia of Food and Agricultural Ethics. Springer, Dordrecht, 7. See also Christopher Leonard, “The Meat Racket” (2015); C. Robert Taylor, “Harvested Cattle, Slaughtered Markets,” April 27, 2022, available at https://www.antitrustinstitute.org/work-product/aai-advisor-robert-taylor-issues-new-analysis-on-the-market-power-problem-in-beef-lays-out-new-policy-framework-for-ensuring-competition-and-fairness-in-cattle-and-beef-markets/; Peter Carstensen, “Buyer Power and the Horizontal Merger Guidelines: Minor Progress on an Important Issue,” 14 U. Pa. J. Bus. L. 775 (2012), available at https://repository.law.wisc.edu/s/uwlaw/item/29746. 19 James, H.S. Jr., M.K. Hendrickson, and P.H. Howard. 2013. “Networks, Power and Dependency in the Agrifood Industry.” In H.S. James, Jr. (ed.), “The Ethics and Economics of Agrifood Competition” (pp. 99-126). Dordrecht, The Netherlands: Springer Publishers. In: Hendrickson, M., James, H., Heffernan, W.D. 2013. “Vertical Integration and Concentration in US Agriculture.” In: Thompson, P., Kaplan, D. (eds) Encyclopedia of Food and Agricultural Ethics. Springer, Dordrecht, 8. Among the four major meat markets, chicken companies adopted production contracting earliest and most completely. Between 1950 and 1955, along with increased vertical integration through ownership of the flocks, the use of production contracts rose from 5 to 85 percent of the broiler industry's production to become nearly universal by 1975. The same switch was slower in turkey production, exceeding 80 percent in 1977. 20 The share of hogs sold through long-term marketing contracts increased from 10 to 72 percent between 1993 and 2001. Packer-owned hogs increased from 6.4 percent of U.S. hog production in 1994 to 24 percent in 2000. 21 Comparatively, in the cattle industry 32 percent of production was under contract in 2013—referring again to contractual agreements for growing cattle to a certain weight or under a certain production method. 22 23 Marketing contracts have seen far greater adoption. Cattle being marketed through forward contracts and Alternative Marketing Arrangements (AMAs), where cattle are already dedicated to certain packers or end-buyers, have risen from about 35 percent in 2005 to 73 percent today. 24 As a result, since 2005, negotiated cash trades have declined from 65 percent to about 27 percent today. 25 20 Martinez, S. W. (2002). “Vertical Coordination of Marketing Systems: Lessons From the Poultry, Egg, and Pork Industries.” (No. 1473-2016-120694) Economic Research Service, USDA, Washington, DC. 21 Martinez, S. W. (2002). “Vertical Coordination of Marketing Systems: Lessons From the Poultry, Egg, and Pork Industries” (No. 1473-2016-120694) Economic Research Service, USDA, Washington, DC. 22 Crespi, John, and Tina L. Saitone. (2018) “Are Cattle Markets the Last Frontier? Vertical Coordination in Animal-Based Procurement Markets .” Annual Review of Resource Economics 10(1): 207-227. 23 Macdonald, James M. (2015) “Trends in Agricultural Contracts.” Choices 30(3):1-6. 24 Packers and Stockyards Division, “Annual Report” (2020). 25 U.S. Department of Agriculture, Agricultural Marketing Service, Market News, as of May 2022. Some of these developments were driven in part by technological and marketing changes. 26 In cattle, for example, the development of boxed beef to ship standardized cuts allowed packers to move their slaughter facilities closer to producers. With cattle no longer shipped from terminal auction markets to the large cities, packers played a more dominant role in the procurement of cattle directly from producers within a surrounding area, and marketing practices shifted, for a time, towards bilateral cash negotiation and, then eventually, longer-term marketing contracts with pricing formulas. 27 26 Lonergan, S. M., and D. N. Marple. “Historical perspectives of the meat and animal industry and their relationship to animal growth, body composition, and meat technology,” “The Science of Animal Growth and Meat Technology.” Lonergan, S. M., D. N. Marple, Eds., Second Edition, Elsevier, (2019) 1-17, available at The Science of Animal Growth and Meat Technology | ScienceDirect. 27 Lawrence, J.D., Schroeder, T.C. and Hayenga, M.L. (2001), “Evolving Producer-Packer-Customer Linkages in the Beef and Pork Industries .” Applied Economic Perspectives and Policy, 23: 370-385. Available at https://doi.org/10.1111/1467-9353.00067. The increased use of long-term production and marketing contracts in livestock and poultry markets, can foster greater vertical coordination, and potentially allows certain production and marketing efficiencies related to scale and certain enhanced aspects of packer, or even retailer, control over product differentiation. The use of vertical contracts may be appealing to livestock or poultry producers for a range of reasons, including more secure access to markets. In poultry markets, for example, contracts shift some aspects of market risks from producers to live poultry dealers, such as grain prices or certain weather-related risks. 28 In the case of livestock, contracts can also reduce a producer's output price risk. 29 28 Knoeber, Charles R., and Walter N. Thurman. (1995) “Don't Count Your Chickens. . . : Risk and Risk Shifting in the Broiler Industry.” American Journal of Agricultural Economics 77(3): 486-496. 29 Key, N. and MacDonald, J.M. (2006) “Agricultural Contracting: Trading Autonomy for Risk Reduction” Amber Waves, U.S. Department of Agriculture Economic Research Service. https://www.ers.usda.gov/amber-waves/2006/february/agricultural-contracting-trading-autonomy-for-risk-reduction/ On the other hand, as they facilitate packers and live poultry dealers' control across the supply chain, contracts can shift certain risks onto or between producers. 30 In particular, without robust open spot markets, cattle producers have complained of less ability to enter the markets and less competition between buyers for better prices. 31 As one notable commentator has termed them, these markets appear to be by “invitation only.” 32 30 See, e.g., Michael Kades, “Protecting Livestock Producers and Chicken Growers,” Washington Center for Equitable Growth (May 5, 2022), available at https://equitablegrowth.org/research-paper/protecting-livestock-producers-and-chicken-growers/; Mary K. Hendrickson, et al., “The Food System: Concentration and Its Impacts,” A Special Report for Farm Family Action Alliance, May 2021, available at https://farmaction.us/concentrationreport/; C. Robert Taylor, “Harvested Cattle, Slaughtered Markets,” April 27, 2022, available at https://www.antitrustinstitute.org/work-product/aai-advisor-robert-taylor-issues-new-analysis-on-the-market-power-problem-in-beef-lays-out-new-policy-framework-for-ensuring-competition-and-fairness-in-cattle-and-beef-markets/; Peter Carstensen, “Buyer Power and the Horizontal Merger Guidelines: Minor Progress on an Important Issue,” 14 U. Pa. J. Bus. L. 775 (2012), available at https://repository.law.wisc.edu/s/uwlaw/item/29746. 31 See, e.g., Bill Bullard, “Chronically Besieged: The U.S. Live Cattle Industry,” Presentation to Thurman Arnold Project at Yale and Law, Ethics, & Animals Program at Yale Law School, “Big Ag & Antitrust Conference,” Jan. 2021, available at https://www.r-calfusa.com/wp-content/uploads/2021/01/210116-Chronically-Beseiged-The-U.S.-Live-Cattle-Industry-Final.pdf; see also Nathan Miller et al., “Buyer Power in the Beef Packing Industry: An Update on Research in Progress,” April 2022, available at http://www.nathanhmiller.org/cattlemarkets.pdf. 32 C. Robert Taylor, “The Many Faces of Corporate Power in the Food System.” Presented at DOJ/FTC Workshop on Merger Enforcement, February 2004, available at https://www.justice.gov/atr/many-faces-power-food-system. Limited options for producers heighten the risks of prejudicial exclusion and retaliation. Over the years, these concerns have been reported to USDA, but the Department has not been able to effectively address complaints, in part owing to insufficient clarity around P&S Act rules and standards and related questions around the ability for individuals to bring cases based on specific instances of harm. The rise of concentrated and vertically integrated markets also gives rise to certain abuses that may take the form of deception. For example, cattle producers have complained to USDA that they are provided with false pretexts as to why a packer would not accept cattle from a producer or would pay less for it. Similarly, poultry and swine growers have complained they have not been told the truth regarding why they were terminated from contracts or otherwise treated differently under them. These forms of deception may also be connected with efforts to discriminate, retaliate, or otherwise unjustly exclude certain producers or growers from the marketplace. 33 33 See, e.g., “Transition Recommendations: On Issues Related to Agricultural Concentration and Competition,” Campaign for Contract Agriculture Reform . . . Western Organization of Resource Councils, et al. , Nov. 9, 2020. Concerns with the rise of vertically integrated contracting across concentrated markets were highlighted in a series of workshops conducted by the U.S. Department of Justice (DOJ) and USDA in 2010. 34 And indeed, following the workshops, a number of producers reported to USDA that they suffered retaliation, and that racial and other exclusionary prejudices were problems. In 2010 and 2016, USDA proposed regulations seeking to address many of these concerns, given their pervasiveness in the marketplace and the longstanding challenges that USDA faced in addressing them. However, the relevant provisions of the proposed regulations were not finalized. 35 34 Department of Justice. “Competition and Agriculture: Voices from the Workshops on Agriculture and Antitrust Enforcement in our 21st Century Economy and Thoughts on the Way Forward.” May 2012. Available at https://www.justice.gov/sites/default/files/atr/legacy/2012/05/16/283291.pdf. 35 Poultry Grower Ranking Systems; Withdrawal of Proposed Rule, 86 FR 60779 (November 4, 2021). Unfortunately, the concentrated nature of livestock and poultry markets exposes all producers to potential market abuses, but some may not be well positioned to protect themselves. Racial and ethnic minorities are arguably more exposed to market abuses, as evidenced by their participation in the agricultural sector having declined sharply over the last many decades. The most recent data from the 2017 Census of Agriculture (Figures 1 and 2) indicate that non-white racial and ethnic groups constitute a very small share of contracted livestock and poultry producers—a trend likely due in part to historical discrimination against these groups. Undoubtedly, discrimination such as what has been experienced by these groups in the past continues in some form today, which is why additional protections are needed. Further, the same USDA Census of Agriculture data show that producers who identify as Black and Native Hawaiian are more likely to have lower gross revenue than their white counterparts, which makes these producers relatively more vulnerable to the market abuses observed in the sector today. These longstanding challenges have prompted Congress and USDA to promote more equitable market access. Section II.B.ii, below provides a more extensive discussion of AMS's concerns regarding the exclusion from, or disadvantages in, certain markets. Retaliation remains a prevalent concern in today's concentrated and highly integrated markets. For example, as recently as April 2022, threats and fear of retaliation interfered with plans for invited witnesses to testify at each of the House and Senate Agriculture Committees' hearings on livestock competition practices. In his opening remarks, House Agriculture Committee Chair David Scott noted: We were supposed to have a 4th witness, a rancher, on our panel, but due to intimidation and threats to this person's livelihood, to this person's reputation, they chose not to participate out of fear. Witness intimidation is unacceptable. . . Only a day before, Senator Deborah Fischer had stated: I wish we had a Nebraska producer here, but as is noted in their letter, none of our producer members we encouraged to testify were willing to put themselves out front for fear of possible retribution from other market participants, an unfortunate reality of today's cattle industry. 36 36 House Chair David Scott D-GA, Opening remarks, U.S. House, Committee on Agriculture, “An Examination of Price Discrepancies, Transparency, and Alleged Unfair Practices in Cattle Markets,” April 27, 2022, (14 min: 24 sec), available at https://anchor.fm/houseagdems/episodes/An-Examination-of-Price-Discrepancies-Transparency-and-Alleged-Unfair-Practices-in-Cattle-Markets-e1hpvo8/a-a7r40dk. U.S. Senate Committee on Agriculture, Nutrition, and Forestry, “Legislative hearing to review S. 4030, the Cattle Price Discovery and Transparency Act of 2022, and S. 3870, the Meat and Poultry Special Investigator Act of 2022,” April 26, 2022 (1 hour 39 min), available at https://www.agriculture.senate.gov/hearings/legislative-hearing-to-review-s-4030-the-cattle-price-discovery-and-transparency-act-of-2022-and-s3870-the-meat-and-poultry-special-investigator-act-of-2022. Producer organizations have also recently reported to USDA concerns relating to possible coercion in the rulemaking comment process. 37 Section II, and in particular II.E.ii, below, provide a more fulsome discussion of concerns regarding retaliation for engaging in protected activities. 37 See, e.g., U.S. Department of Agriculture, “USDA Extends Public Comment Period to August 23 and Posts Public Webinar for the Proposed Rule to Promote Transparency in Poultry Grower Contracting and Tournaments,” Aug. 5, 2022, available at https://www.usda.gov/media/press-releases/2022/08/05/usda-extends-public-comment-period-august-23-and-posts-public (last accessed Aug. 2022). Deception in various forms and guises also remains a concern in the marketplace, including during the COVID-19 pandemic, where producers had dramatically reduced access to markets. 38 We discuss these concerns extensively in Section III, below. 38 On limits to market access in the pandemic, see U.S. Department of Agriculture, Agricultural Marketing Service, “Agricultural Competition: A Plan in Support of Fair and Competitive Markets,” May 2022, available at https://www.ams.usda.gov/reports/agricultural-competition-plan-support-fair-and-competitive-markets (last accessed Aug. 2022). The historic Executive order issued by the Biden-Harris administration, Executive Order (E.O.) 14036—Promoting Competition in the American Economy (86 FR 36987; July 9, 2021), directs the Secretary of Agriculture to address unfair treatment of farmers and improve conditions of competition in their markets by considering rulemaking to address, among other things, certain practices related to market abuses and enhanced competition in the livestock, poultry, and related markets, including unjustly discriminatory, unduly prejudicial, and deceptive practices, in particular retaliation. E.O. 14036 also underscored that an individual should not have to show market-wide harm to secure relief under the Act. AMS has considered that direction in undertaking this rulemaking. The P&S Act is a remedial statute enacted to address problems faced by farmers, producers, and other participants in certain livestock, poultry, and related agricultural markets; to protect the public from predatory practices; and to help ensure a stable food supply. Thus, as academics and courts have noted, the Act has “tort-like provisions that are concerned with unfair practices and discrimination” that fulfill a “market facilitating function,” which Congress designed to prevent “market abuse.” 39 AMS interprets and implements the Act to affect its core statutory purposes. 40 AMS is concerned that the current regulations do not adequately address many unduly prejudicial, unjustly discriminatory, and deceptive practices, which are exacerbated by increased horizontal concentration and vertical contracting. This proposed rule aims to address those concerns. 39 Herbert Hovenkamp, “Does the Packers and Stockyards Act Require Antitrust Harm?” (2011). Faculty Scholarship at Penn Carey Law. 1862. https://scholarship.law.upenn.edu/faculty_scholarship/1862 (“subsections (a) and (b) appear to be tort-like provisions that are concerned with unfair practices and discrimination, but not with restraint of trade or monopoly as such”); Peter Carstensen, The Packers and Stockyards Act: A History of Failure to Date, CPI Antitrust Journal 2-7 (April 2010) (“Congress sought to ensure that the practices of buyers and sellers in livestock (and later poultry) markets were fair, reasonable, and transparent. This goal can best be described as market facilitating regulation.”); Michael C. Stumo & Douglas J. O'Brien, Antitrust Unfairness vs. Equitable Unfairness in Farmer/Meat Packer Relationships, 8 Drake J. Agric. L. 91 (2003); Michael Kades, “Protecting livestock producers and chicken growers,” Washington Center for Equitable Growth (May 2022), https://equitablegrowth.org/wp-content/uploads/2022/05/050522-packers-stockyards-report.pdf (“Section 202's prohibitions on unjust discrimination and undue preference are not limited to conduct that destroys or limits competition or creates a monopoly. These provisions address conduct that impedes a well-functioning market and deprives livestock and poultry producers of the true value of their animals. Taken together, these provisions seek to prevent market abuses.”). 40 See Bowman v. U.S. Dep't of Agric., 363 F.2d 81 at 85 (5th Cir. 1966). B. Previous Rulemakings At the direction of Congress, through the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) (Pub. L. 110-246), USDA's then Grain Inspection, Packers, and Stockyards Administration (GIPSA), which administered the Packers and Stockyards Act, published a proposed rule (75 FR 35338; June 22, 2010) (2010 Proposed Rule). 41 The 2010 Proposed Rule, among other things, banned retaliation as an “unfair, unjustly discriminatory, and deceptive practice,” and clarified when certain conduct in the livestock and poultry industries represents the making or giving of an undue or unreasonable preference or advantage or subjects a person or locality to an undue or unreasonable prejudice or disadvantage. Congress then prohibited finalization of portions of the 2010 Proposed Rule through appropriations acts for fiscal years 2012 through 2015. 41 In 2017, GIPSA merged with the Agricultural Marketing Service (AMS). AMS now administers the regulations under the Act and undertook this rulemaking to meet the statutory requirement. In 2015, after increased public awareness of issues that the 2010 Proposed Rule attempted to address, 42 Congress ceased including the prohibition in appropriations bills, and GIPSA undertook another rulemaking to address these issues. In 2016, the agency published another proposed rule (81 FR 92703; December 20, 2016) (2016 Proposed Rule) attempting to establish what constituted unfair practices and undue preferences, along with a related interim final rule (81 FR 92566) (2016 IFR). Following the change of administration, the agency decided to take no further action on the rule. In a notification of no further action published in the Federal Register (82 FR 48603; October 18, 2017) (2017 No Further Action Notification), GIPSA acknowledged that some producers, growers, and farm trade groups generally supported the proposed rule, and many commenters had raised concerns about growing power imbalances, discrimination, and retaliation. GIPSA, however, decided not to finalize the 2016 Proposed Rule, in part on the grounds that it raised the stakes for regulated entities in ways that could suppress innovation, and contained ambiguous terms that were likely to increase and prolong litigation between producers and regulated entities and between regulated entities and AMS. The 2016 Proposed Rule listed six non-exclusive criteria for the Secretary to consider when determining whether conduct constituted an unfair practice or preference. In contrast, the current proposed rule focuses on discrimination, deception, and retaliation. 42 “Chickens: Last Week Tonight with John Oliver,” HBO, May 17, 2015, available at https://www.youtube.com/watch?v=X9wHzt6gBgI; see also Nathaniel Haas, “John Oliver v. chicken,” Politico, June 1, 2015, available at https://www.politico.com/story/2015/06/john-oliver-vs-chicken-118510. In 2020, AMS issued a proposed rule (85 FR 1771; January. 13, 2020) (2020 Proposed Rule), which was finalized later that year (85 FR 79779; December. 11, 2020) (2020 Final Rule), which that set out several (nonexclusive) criteria the Secretary would consider concerning undue or unreasonable preferences or advantages: whether the preference or advantage cannot be justified on the basis of a cost savings related to dealing with different producers, sellers, or growers; cannot be justified on the basis of meeting a competitor's prices; cannot be justified on the basis of meeting other terms offered by a competitor; and cannot be justified as a reasonable business decision. In response to the 2020 Proposed Rule, AMS received numerous comments raising concerns regarding discriminatory and retaliatory practices; however, AMS stated that the 2020 Final Rule was intended for the narrower purpose of establishing criteria to consider. 43 Specifically, the 2020 Proposed Rule's preamble noted that discrimination on the basis of race, gender, and other such protected bases was unlawful and would be addressed as potential violations of the Act's prohibition against undue prejudices. In August 2021, AMS reiterated this policy in a series of Frequently Asked Questions (FAQs). 44 AMS's FAQs also underscored that the rule's criteria were “not exhaustive and not determinative.” 43 Undue and Unreasonable Preferences and Advantages Under the Packers and Stockyards Act, 85 FR 79779 (January 11, 2021), 9 CFR part 201. Comments available at https://www.regulations.gov/document/AMS-FTPP-18-0101-0001/comment. 44 85 FR 79779; U.S. Department of Agriculture, Agricultural Marketing Service, “Frequently Asked Questions on the Enforcement of Undue and Unreasonable Preferences under the Packers and Stockyards Act,” August 2021, available at https://www.ams.usda.gov/rules-regulations/packers-and-stockyards-act/faq (last accessed June 2022). In the context of each of these rulemakings spanning the last decade, GIPSA, and later AMS, received comments regarding the power imbalances in the livestock and poultry industries and highlighting the need for regulations that adequately protect farmers against recurrent retaliation, deception, and discrimination. Given the consistency of these assertions, as well as the concerns further brought to light during the COVID-19 pandemic regarding today's increasingly concentrated livestock and poultry markets, 45 AMS believes this proposed rule is needed to effectuate its responsibility to protect producers against unlawful practices that exclude, disadvantage, discriminate against, retaliate against, or deceive them, and that the rulemaking would promote markets with integrity that are competitive and inclusive to all. 45 U.S. Department of Agriculture, “Agri-Food Supply Chain Assessment: Program and Policy Options for Strengthening Resilience,” 12-17, February 2021, available at https://www.ams.usda.gov/supply-chain (last accessed Aug. 2022); see also Agricultural Marketing Service, U.S. Department of Agriculture, “Agricultural Competition: A Plan in Support of Fair and Competitive Markets,” May 2022, available at https://www.ams.usda.gov/reports/agricultural-competition-plan-support-fair-and-competitive-markets (last accessed Aug. 2022). II. Undue Prejudices or Disadvantages and Unjust Discriminatory Practices A. Agency Interpretation of Undue or Unreasonable Prejudice or Disadvantage and Unjust Discriminatory Practices This proposed rule addresses concerns related to undue prejudices or disadvantages and unjust discrimination. First, proposed § 201.304(a) would establish clearer duties on packers, swine contractors, and live poultry dealers to ensure full and non-discriminatory market access for market vulnerable individuals. This section would also prohibit undue prejudices and disadvantages against cooperatives. Second, proposed § 201.304(b) would address retaliation by setting out protected activities that a covered producer may engage in but that a regulated entity may not use as grounds for unjust discrimination or undue prejudice or disadvantage. The proposed regulations would prohibit regulated entities from retaliating against a covered producer for participating in a protected activity by terminating a contract, refusing to renew a contract, offering more unfavorable contract terms than those generally or ordinarily offered, refusing to deal, interfering with third-party contracts, and other actions with a an adverse impact to covered producers. These acts of retaliation would be unjustly discriminatory and unduly prejudicial and disadvantageous. Section 202(b) of the P&S Act (7 U.S.C. 192(b)) prohibits regulated entities from “subjecting any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect[.]” Though not defined by the Act, in 1921, legal definitions of prejudice included anything that “places the person affected in a more unfavorable or disadvantageous position than he would otherwise have occupied.” 46 Merriam-Webster.com defines prejudice to include “injury or damage resulting from some judgment or action of another in disregard of one's rights” and “an irrational attitude of hostility directed against an individual, a group, a race, or their supposed characteristics.” 47 USDA's Judicial Officer has defined prejudice in an administrative adjudication as “subjecting any person to any injury or damage and not subjecting all similarly situated persons to the same injury or damage [.]” 48 46 Roberto v. Catino, 140 Md. 38, 116 A. 873, 875 (1922). 47 Merriam-Webster online dictionary, https://www.merriam-webster.com/dictionary/prejudice (accessed June 15, 2022). 48 In Re: IBP, Inc., 57 Agric. Dec. 1353 (U.S. Department of Agriculture July 31, 1998). Likewise, sec. 202(a) of the P&S Act (7 U.S.C. 192(a)) prohibits “unjust discrimination.” but does not expressly define the term. Merriam-Webster.com defines “unjust” as: “characterized by injustice: unfair.” 49 The common meaning of the word “discrimination” means “differential treatment; especially a failure to treat all persons equally where no reasonable distinction can be found between those favored and those not favored.” 50 While the meaning of the word “discriminatory” varies depending on the context, the common definition includes “applying or favoring discrimination in treatment.” 51 Therefore, under sec. 202(a) of the Act, a regulated entity treating similar entities differently with respect to livestock, meats, meat food products, livestock products in unmanufactured form, or live poultry based on certain conditions is an unjustly discriminatory practice. 52 49 Merriam-Webster online dictionary, https://www.merriam-webster.com/dictionary/unjust (accessed June 15, 2022). 50 Black's Law Dictionary, p. 586 (11th ed. 2019). 51 Merriam-Webster online dictionary, https://www.merriam-webster.com/dictionary/discriminatory (accessed June 15, 2022). 52 See, also In Re: IBP, Inc., 57 Agric. Dec. 1353 (1998), rev'd on other grounds by Excel Corp. v. United States Dep't of Agri., 397 F.3d 1285 (10th Cir. 2005). The terms “unjust discrimination” and “undue or unreasonable prejudice or disadvantage” in the P&S Act do not follow the precise language of any law that preceded it. This is not without reason. The P&S Act “would never have been adopted by the Congress if the marketing of livestock and the distribution of meat products did not present problems [that] were insufficiently met by the [then existing] antitrust laws[.]” 53 There were two laws, however, that preceded the passage of the P&S Act that influenced the inclusions of “unjust discrimination” and “undue or unreasonable prejudice or disadvantage” in the P&S Act: the Clayton Act, and the Interstate Commerce Act. While both the Clayton Act and the Interstate Commerce Act informed the P&S Act's prohibition on unfair and discriminatory practices, the P&S Act has a broader application. 53 Crosse & Blackwell Co. v. F.T.C., 262 F.2d 600, 604 (4th Cir. 1959). The Clayton Act, passed in 1914, used the language of discrimination specifically with respect to discriminatory pricing, prohibiting anyone from “either directly or indirectly [discriminating] in price between different purchasers of commodities . . . where the effect of such discrimination may be to substantially lessen competition or create a monopoly in any line of commerce.” 54 The Clayton Act was careful to expressly prohibit discriminatory pricing in particular. In contrast, the P&S Act does not include this textual limitation. In addition, the Clayton Act requires that the discrimination “may be to substantially effect competition or create a monopoly.” The P&S Act, again, is broader: 54 The Clayton Act, sec. 2, Public Law No. 63-212, 38 Stat. 730 (1914). [T]he prohibitions of [the Act] go further than the prohibitions in the Clayton Act. For instance, one of the sections of the Clayton Act prohibits discrimination in prices as between localities, and then contains a sort of nullification clause, to the effect that it shall not prevent anybody from choosing his own customers or making discriminations in prices where there is a difference in quality or a difference in transportation charges, and so forth, while this bill makes any undue or unreasonable discrimination as between localities or between persons unlawful. 55 55 61 Cong. Rec. 1888 (1921) (statement of Rep. Anderson). Likewise, the Interstate Commerce Act was an important template for the P&S Act. The P&S Act's statutory history is replete with references and comparisons, in general terms, to the Interstate Commerce Act. Passed in 1887, the Interstate Commerce Act forbade common carriers—primarily meaning railroads—from undue preferences, prejudices, and discrimination in their rates and charges between connecting lines. 56 As the Supreme Court explained the Interstate Commerce Act in 1934: “The purpose . . . was to bring into existence a body which, from its special character, would be best fitted to determine, among other things, whether upon the facts in a given case there is an unjust discrimination against interstate commerce.” 57 56 Act of February 4, 1887 (Interstate Commerce Act), sec. 3, Public Law 49-41, February 4, 1887; Enrolled Acts and Resolutions of Congress, 1789; General Records of the United States Government, 1778—1992; Record Group 11; National Archives. 57 State of Fla. v. United States, 292 U.S. 1, 12, 54 S. Ct. 603, 608, 78 L. Ed. 1077 (1934) (citing United States v. Louisville & Nashville R.R. Co., 235 U.S. 314, 320 (1914)).”[F]rom the beginning the very purpose for which the Commission was created was to . . . decide whether from facts, disputed or undisputed [whether a] preference or discrimination existed.” Louisville and Nashville R.R. Co., 235 U.S. at 320. With respect to the courts' interpretation of unjustly discriminatory practices under the P&S Act, there are few Federal cases that explore the difference between unjust discrimination and the other provisions of the Act. Because of the P&S Act's similarity to the Clayton Act, the Seventh Circuit holds that unjust discrimination has included below-cost sales which injure sellers or primary line competition, even if the buyers or secondary-line competition are not affected. See Wilson & Co. v. Benson, 286 F.2d 891, 895 (7th Cir. 1961). Likewise, that circuit holds that price discrimination in favor of a larger grocery store chain, and higher prices to its competitors, are another type of unjust discrimination that the Act has prevented. Swift & Co. v. United States, 317 F.2d 53, 55-56 (7th Cir. 1963). Moreover, the Supreme Court has held that when discrimination is used as an attempt to limit competition, it is a monopoly practice. See Denver Union Stock Yard Co. v. Producers Livestock Mktg., 356 U.S. 282, 289 (1958) (interpreting sec. 312 of the Act and finding that regulations aimed at preventing market agencies registered at one stockyard from doing business for producers at any other market within a normal marketing area to be a monopoly practice). AMS proposes this regulation to protect the integrity of the market as a competitive, price-clearing, economically open commercial endeavor by eliminating or restraining prejudicial discrimination. This includes prejudicial discriminatory behaviors such as those that adversely impact open access by competitors and market participants (through certain exclusionary prejudices, such as denying or disadvantaging an individual's access to market on grounds which could include race, gender, religion, or other bases; or retaliatory discrimination for engaging in certain basic protected activities closely tied to the basic requirements of being in the business of livestock, poultry, and related markets covered under the Act), and otherwise exert forms of control or dependency that limit the economic freedom of those participating in the market. 58 The harms these proposed regulations aim to prevent are the kinds of discrimination (and, as discussed below, deceptive) practices that dominant firms can use to limit competition and interfere with the operation of the market, including across the entire supply chain with respect to livestock, meats, meat food products, livestock products in unmanufactured form, or for any live poultry dealer with respect to live poultry. 58 Michael Kades, “Protecting Livestock Producers and Chicken Growers,” Washington Center for Equitable Growth (May 5, 2022), available at https://equitablegrowth.org/research-paper/protecting-livestock-producers-and-chicken-growers/. B. Prohibited Undue Prejudices or Disadvantages and Unjust Discrimination—Proposed § 201.304(a)(1) Section 201.301 of the proposed regulations would protect the integrity of the market, promoting fairness and competition by prohibiting undue prejudices and disadvantages and unjust discrimination that inhibit inclusive market access and treatment. Specifically, proposed § 201.304(a)(1) would prohibit prejudice, disadvantage, or the denial or reduction of market access by regulated entities against covered producers based on their status, as defined in the regulation, of being “market vulnerable” producers. This term is defined as membership in a group that has been subjected to, or is at heightened risk of, adversely differential treatment in the marketplace. AMS seeks comments on whether specific groups should be named in the definition of a market vulnerable individual as examples of market vulnerable individuals and, if so, requests supporting evidence on the historical treatment of such groups. AMS also seeks comment on whether, alternatively, prohibitions on undue prejudice or disadvantage or unjust discrimination would best be addressed by identifying defined protected classes, and if so, which protected classes. The intent of the proposed regulation is to help break down barriers that may serve to exclude or disadvantage certain covered producers, while leaving room for differential treatment based on legitimate business purposes. This proposal defines a covered producer as a livestock producer (as defined in the regulation at proposed § 201.302) or swine production contract grower or poultry grower as defined in sec. 2(a) of the Act. While swine contract producers and poultry growers are defined in the Act, AMS believes the Act is properly read to protect livestock producers from unjustly prejudicial and discriminatory practices. To effectuate this purpose, this proposed rule defines livestock producer as any person engaged in the raising and caring for livestock by the producer or another person, whether the livestock is owned by the producer or by another person, but not an employee of the owner of the livestock. This definition is designed to capture the vast majority of market participants who are dependent on regulated entities to engage in the livestock business. AMS seeks comment on whether to limit the definition to persons engaging in the raising and caring for livestock in the chain of slaughter, or whether such limitation is unnecessary or improperly limits the coverage of the Act. The principal purpose of this proposed approach is to address prejudices in the marketplace against producers that are more vulnerable to such treatment and to stop unjust discrimination. AMS views vulnerability to adverse marketplace treatment to include, but not be limited to, exclusion or disadvantage on the basis of race, ethnicity, or sex or gender prejudices (including discrimination against an individual for being lesbian, gay, transgender, or queer), religion, disability, or age. 59 AMS seeks comment on these bases, and whether there are other bases for vulnerability to adverse marketplace treatment. 59 Supreme Court case law has established that discriminating against an individual for being lesbian, gay, transgender or queer is discrimination on the basis of sex or gender prejudices. Bostock v. Clayton Cnty., Georgia, 140 S. Ct. 1731, 1741 (2020) (“[I]t is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”). This proposed rule aims to ensure more inclusive market competition and address allegations related to undue prejudices through enforceable regulatory prohibitions. The proposed prohibitions would protect producers at both individual and market-wide levels from undue prejudices and disadvantages and unjust discrimination—both of which AMS has determined violate the P&S Act. The Secretary is empowered under the P&S Act to address harms in their incipiency. 60 Moreover, given its experience interacting with producers and regulated entities, AMS believes that individual instances of prejudice and discrimination can have a cumulative adverse effect on relevant markets, including the national market. 60 E.g. Bowman v. United States Dep't of Agric., 363 F.2d 81, 85 (5th Cir. 1966) (“`the Act is designed to `* * * prevent potential injury by stopping unlawful practices in their incipiency. Proof of a particular injury is not required.' ”). AMS believes the proposed regulatory scheme results in a flexible approach to resolving marketplace vulnerabilities. AMS's proposed regulatory approach of prohibiting unjust discrimination and undue prejudices and disadvantages against market vulnerable producers recognizes that discrimination against producers may evolve. AMS expects the proposed definition will be sufficiently responsive to the particular facts of given cases and particular markets over time. AMS is considering issuing guidance on the proposed regulatory approach. AMS is seeking comment on the definition of “market vulnerable producers.” AMS's goal is to appropriately govern regulated entities' conduct for the purpose of ensuring inclusive competition in the marketplace, grounded in the Act's authorities. This includes seeking comment on whether it should delineate specific categories of vulnerable producers on the basis of membership in groups that have historically been subject to adverse treatment owing to racial, ethnic, gender, or religious prejudices. If so, AMS solicits supporting evidence regarding the historical adverse treatment of such groups. AMS also seeks comment on the use of a “market vulnerable producer” approach—rather than a list of protected classes that may not be discriminated against—to the regulatory prohibition against discrimination. In the alternative to using the market vulnerable producer approach, the agency is considering whether this regulation should ban discrimination against specific classes, such as on the basis of race, color, national origin, religion, sex, sexual orientation, gender identity, age, disability, marital status, or family status. Such an approach would differ from the market vulnerable individual approach and would instead more closely follow the civil rights laws that prohibit prejudicial discrimination against certain protected classes. The prohibition on prejudice against cooperatives also seeks to prevent barriers to market access for cooperatives. Congress has long recognized the need to provide enhanced protections for cooperatives, as embodied for example in the Agricultural Fair Practices Act of 1967 (Pub. L. 90-288), which protects producers' rights to form a cooperative. 61 61 For the purposes of this preamble, a cooperative is an incorporated or unincorporated association of producers, with or without capital stock, formed for mutual benefit of its members. Farm cooperatives are formed under state, not Federal law, even though cooperatives have Federal protections. See James B. Dean & Thomas Earl Geu, The Uniform Limited Cooperative Association Act: An Introduction, 13 Drake J. Agric. L. 63, 67 (2008) (“There is, however, no single type of cooperative. Although much of the law that has developed around cooperatives has developed with respect to agricultural cooperatives, cooperatives exist in many areas . . . including housing, insurance, banking, health care, and retail sales, among others.”). Cooperatives can both be buyers and sellers of agricultural products. Cooperatives made up of sellers, because they jointly fix the prices of their goods, are legally permitted to market the products they produce when the cooperative organization meets the requirements of the Capper-Volstead Act (see 7 U.S.C. 291) or the Clayton Act (see 15 U.S.C. 17). i. Authority Provided by the Act There is no indication that Congress intended to exempt any practice of regulated entities affecting producers covered under the Act. 62 The P&S Act, through secs. 202(a) and (b), broadly prohibits certain practices or devices, including undue or unreasonable prejudices and disadvantages and unjust discrimination. Sections 202(a) and (b) of the Act identify a number of prohibited actions with respect to livestock, meats, meat food products, or livestock products in unmanufactured form, or for any live poultry dealer with respect to live poultry. To effectuate these statutory prohibitions, AMS proposes to prohibit specific undue and unreasonable prejudices, disadvantages, and discrimination against any covered producer. AMS also seeks comment on whether to extend these protections to all persons buying or selling meat and meat food products in markets under the jurisdiction of the Act. 62 See 7 U.S.C. 193. C.f. Mitchell v. United States, 313 U.S. 80, 94, 61 S. Ct. 873, 877, 85 L. Ed. 1201 (1941) (“We have repeatedly said that it is apparent from the legislative history of the Act that not only was the evil of discrimination the principal thing aimed at, but that there is no basis for the contention that Congress intended to exempt any discriminatory action or practice of interstate carriers affecting interstate commerce which it had authority to reach.”). In enacting the P&S Act, Congress cast a wide net to capture all acts of unjust discrimination and unreasonable prejudice against any particular person. The Act's prohibition of anti-competitive, discriminatory, and unreasonably prejudicial actions against a particular person was not a new statutory concept, as the Interstate Commerce Act also banned unreasonable prejudices and discriminatory practices well before the enactment of the P&S Act. While a finding of being within the Interstate Commerce Act's (ICA) scope is not a necessary precondition for a violation of the P&S Act, the comparison is nevertheless useful, especially with respect to the structure and design of provisions governing undue prejudices. A comparison is provided in Table 1, below. In Mitchell v. U.S., the Supreme Court decided that the Interstate Commerce Act prohibited discrimination based on race. 313 U.S. 80 (1941). The Supreme Court held that “it is apparent from the legislative history of the Interstate Commerce Act that not only was the evil of discrimination the principal thing aimed at, but that there is no basis for the contention that Congress intended to exempt any discriminatory action or practice of interstate carriers affecting interstate commerce which it had authority to reach.” 63 Further, the Court isolated a section of the Interstate Commerce Act and noted that, “Paragraph 1 of Section 3 of the Act says explicitly that it shall be unlawful for any common carrier subject to the Act `to subject any particular person * * * to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.” 64 (Emphasis added) The Court found that unreasonable prejudice against an individual based on race was a violation and concluded that, “the Interstate Commerce Act expressly extends its prohibitions to the subjecting of `any particular person' to unreasonable discriminations.” 65 63 Id. at 94. 64 Id. at 95. 65 Id. at 97. The P&S Act contains similar but broader language than the Interstate Commerce Act sec. 3 in sec. 202, which reads, “It shall be unlawful for any packer or swine contractor with respect to livestock, meats, meat food products, or livestock products in unmanufactured form, or for any live poultry dealer with respect to live poultry, to: (a) Engage in or use any unfair, unjustly discriminatory, or deceptive practice or device; or (b) Make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect. . .” (emphasis added). Table 1 illustrates where the text between the two Acts is similar, and also how the Packers and Stockyards Act is broader. 66 66 For more on the relationship between the Interstate Commerce Act and the P&S Act in this area, see Michael Kades, “Protecting Livestock Producers and Chicken Growers,” Washington Center for Equitable Growth, at 66 (May 2022) discussing Wheeler v. Pilgrim's Pride Corp., 591 F.3d 355, 368-369 (5th Cir 2009) (en banc) (J. Jones concurring): “In all the cases discussed by the concurrence dealing with both terms [under the ICA], the defendant faced charges that it treated customers differently. According to the court, ‘railway companies are only bound to give the same terms to all persons alike under the same conditions.' If the conditions are different, then different treatment is merited. Further, ‘competition between rival routes is one of the matters which may lawfully be considered in making rates.' Differential treatment driven by competitive forces is not a violation. Acknowledging that competition can justify differential treatment of customers is different than requiring the plaintiff to prove anticompetitive harm to establish a violation.” Table 1—Comparison of the Interstate Commerce Act and the Packers & Stockyards Act Interstate Commerce Act (1887 text) Sec. 3. P&S Act, Section 202 [7 U.S.C.192]. Unlawful practices enumerated That it shall be unlawful for any common carrier subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person , company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or to subject any particular person , company, firm, corporation, or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever. Every common carrier subject to the provisions of this act . . . shall not discriminate in their rates and charges between such connecting lines[.] (emphasis added). It shall be unlawful for any packer or swine contractor with respect to livestock, meats, meat food products, or livestock products in unmanufactured form, or for any live poultry dealer with respect to live poultry, to: (a) Engage in or use any unfair, unjustly discriminatory , or deceptive practice or device; or (b) Make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect; (emphasis added). As shown in Table 1, unlike the Interstate Commerce Act, the P&S Act in secs. 202(a) and (b) prohibits undue or unreasonable prejudices or disadvantages as well as deception and unjust discrimination (without limitation to discrimination in rates and charges in particular). In this proposed rulemaking, AMS incorporates the language from sec. 202 to prohibit acts of unreasonable prejudice and to prevent unreasonable discrimination including but not limited to the race discrimination that the Court found to be violative of the Interstate Commerce Act in Mitchell . This proposed regulation sets forth specific prohibitions on prejudicial or discriminatory acts or practices against individuals that are sufficient to demonstrate violation of the P&S Act without the need to further establish broad-based, market-wide prejudicial or discriminatory outcomes or harms. The prohibitions on regulated entities adversely treating individual producers set forth in this proposed rule address the types of harms the P&S Act is intended to prevent. AMS believes that preventing broad-based exclusion is most effectively enforced at the individual producer level when the conduct is in its incipiency. 67 To further allow for effective enforcement of the statute, AMS is also proposing a recordkeeping requirement to support evaluation of regulated entity compliance. 67 “[T]he purpose of the Act is to halt unfair trade practices in their incipiency, before harm has been suffered.” See Farrow v. U.S. Dep't of Agr., 760 F.2d 211, 215 (8th Cir. 1985) (citing De Jong Packing Co. v. U.S. Dep't of Agric., 618 F.2d 1329, 1336-37 (9th Cir. 1980)); Swift & Co. v. United States, 393 F.2d 247, 252 (7th Cir. 1968); Armour and Company v. United States, 402 F.2d 712, 723 n. 12 (7th Cir.1968). ii. Economic Rationale Marketplace integrity and market access were leading policy goals at the time of the Act's passage. “The primary purpose of [the P&S Act] is to assure fair competition and fair-trade practices in livestock marketing and in the meatpacking industry . . . The Act provides that meatpackers subject to its provisions shall not engage in practices that restrain commerce or create a monopoly. They are also prohibited from engaging in any . . . unjust discriminatory practice or device. . .” (emphasis added). AMS believes that discrimination in the form of prejudice or retaliation against a covered producer on the basis of certain non-economic prejudices restrains commerce, including competition, and effects undue and unjust trade practices by denying or inhibiting full market access for producers. These limitations on market access are contrary to the primary purposes of the Act—assuring fair trade practices and competitive markets that producers can access, as well as prohibiting unjust discrimination. For these reasons, AMS has determined that prejudice on certain non-economic bases, as set forth under “market vulnerable individual,” is undue and unjust. Undue prejudice is, furthermore, a market abuse that undermines market integrity, deprives the producer of the benefit of the market, and prevents the producer from obtaining the true market value of the livestock, or their services. 68 While such a pathway for harm is sufficient justification for the rulemaking, prejudicial discrimination is also anti-competitive and leads to economic inefficiencies. This section addresses the economics of these issues, including by describing the history of prejudice and discrimination and their economic consequences in the agricultural sector and other economic sectors for market vulnerable individuals and groups. 68 See Stafford v. Wallace, 258 U.S. 495 (1922). Background and History of Economic Impacts of Prejudice and Unjust Discrimination in Agricultural and Other Economic Sectors While not necessarily tied exclusively to the operation of livestock markets, it is well-documented that undue prejudice has occurred and persists in agricultural markets and has led to market abuse. For example, in the earlier part of the 1900s agricultural landholders conspired to restrict land sales and the administration of Federal farm support programs to Black people, including those engaged in livestock production. 69 A 1959 paper reported “significant market discrimination” against Black American producers in the Southern United States. 70 The loss of heirs' property—land that is passed down from generation to generation without a will or other legal documentation—has been the leading cause of Black land loss in US agriculture. 71 Some of the loss of heirs' property was the direct result of predatory and discriminatory abuse of partition sales processes and inequities in access and use of legal and other estate planning tools among Black populations. 72 69 Francis, Dania V., Darrick Hamilton, Thomas W. Mitchell, Nathan A. Rosenberg, and Bryce Wilson Stucki. “Black Land Loss: 1920-1997.” In AEA Papers and Proceedings, vol. 112, pp. 38-42. American Economic Association, 2022. 70 Tang, Anthony M. “Economic development and changing consequences of race discrimination in Southern agriculture.” Journal of Farm Economics 41, no. 5 (1959): 1113-1126. 71 U.S. Department of Agriculture, National Agricultural Library, “Heirs' Property,” https://www.nal.usda.gov/farms-and-agricultural-production-systems/heirs-property (last accessed Aug. 2022). 72 Mitchell, Thomas W. 2019. Historic Partition Law Reform: A Game Changer for Heirs' Property Owners. In Heirs' property and land fractionation: fostering stable ownership to prevent land loss and abandonment. https://www.fs.usda.gov/treesearch/pubs/58543 (last accessed 8/9/2022). The Federal Government also played a role in discriminatory practices, which had significant economic consequences for Black producers especially. Reports from the U.S. Commission on Civil Rights in 1965 and 1982 documented discrimination in the provision of USDA programs and other prejudicial factors leading to the decline in Black farming. 73 In the late 1990s, Black producers won a lawsuit filed against USDA for engaging in discriminatory practices in its farm loan programs—practices which led to financial ruin and land loss for many Black farmers. 74 73 U.S. Commission on Civil Rights. 1965. Equal Opportunity in Farm Programs: An Appraisal of Services Rendered by Agencies of the U.S. Department of Agriculture. https://files.eric.ed.gov/fulltext/ED068206.pdfUS Commission on Civil Rights. 1982. “The Decline of Black Farming in America.” https://eric.ed.gov/?id=ED222604. 74 Feder, J. and T. Cowan. 2013. “Garcia v. Vilsack: A Policy and Legal Analysis of a USDA Discrimination Case”, Congressional Research Service report number 7-5700, February 22, 2013. These, and other widespread discriminatory practices, help explain the relative greater decrease in the number of Black producers over the course of the twentieth century. 75 Indeed, White farm ownership declined 62 percent and Black farm ownership 96 percent between 1930 and 2012. 76 Over the same period, total acres operated by Whites declined 9 percent and Blacks by 90 percent. 77 75 Touzeau, Leslie. 2019. “Being Stewards of Land Is Our Legacy': Exploring the Lived Experiences of Young Black Farmers.” Journal of Agriculture, Food Systems, and Community Development 8 (4): 1-6. https://doi.org/10.5304/jafscd.2019.084.007. 76 Francis, Dania V., Darrick Hamilton, Thomas W. Mitchell, Nathan A. Rosenberg, and Bryce Wilson Stucki. “Black Land Loss: 1920-1997.” In AEA Papers and Proceedings, vol. 112, pp. 38-42. American Economic Association, 2022; Wood, S., & Gilbert, J. (2000, Spring). Returning African-American farmers to the land: Recent trends and a policy rationale. The Review of Black Political Economy, 27, 43-64. Available at https://doi.org/10.1007/BF02717262. Touzeau, Leslie. 2019. “`Being Stewards of Land Is Our Legacy': Exploring the Lived Experiences of Young Black Farmers.” Journal of Agriculture, Food Systems, and Community Development 8 (4): 1-6. https://doi.org/10.5304/jafscd.2019.084.007. 77 The Agricultural Census figures on farm operations for 2012 are downloaded from the National Agricultural Statistics Service's Quick Stats and figures from 1930 are from volume 4 of the 1930 Census, https://agcensus.library.cornell.edu/census_year/1930-census/. Other racial and ethnic minorities have also been negatively impacted by prejudicial acts. Latino and Indigenous people farming on reservations lost their farmland through the same abuses of partition sale processes as Black farmers. Between 1900 and 2017, the percent of all producers identifying as White increased nine percentages points to 96 percent, while American Indian or Alaska Native producers increased by only 1.3 percentage points, to 2.3 percent. 78 Hispanic or Latino farmers increased by only 2.4 percentage points between 1920 and 2017, to 3.4 percent. Racial and ethnic inequities in farmland ownership and indicators of farm-related wealth have also been observed in recent years. 79 Concerns have also been highlighted regarding the treatment of Asian American and Pacific Islander poultry growers, in particular that immigrant communities may not appreciate the risks of contractual arrangements due to language barriers. 80 78 Casey, Alyssa R. Racial Equity in U.S. Farming: Background in Brief 2021. Congressional Research Service. https://crsreports.congress.gov/product/pdf/R/R46969. 79 Horst, M., Marion, A. “Racial, ethnic and gender inequities in farmland ownership and farming in the U.S.” Agric Hum Values 36, 1-16 (2019). https://doi.org/10.1007/s10460-018-9883-3. 80 Christopher Leonard, “The Meat Racket,” (2015) and Witt, Howard. “Hmong poultry farmers cry foul, sue” Chicago Tribune. May 15, 2006. Available online at: https://www.chicagotribune.com/news/ct-xpm-2006-05-15-0605150155-story.html. Complete foreclosure of market access, for example through the loss of land or other capital, has clear adverse economic outcomes for protected groups who wish to engage in the agricultural sector but cannot. At the same time, discriminatory acts reduce economic opportunity for individuals in protected groups who are able to maintain market access. This not only causes economic harm to these groups but also has broader impacts. Studies documenting these economic impacts of prejudicial discrimination in the agricultural sector are relatively sparse, partly due to data limitations. However, economic studies focused on employment practices, financial transactions, housing, and other markets outside the agricultural sector demonstrate how discrimination may cause economic harm across all types of markets, including agricultural ones. As early as the 1950s, economic studies documented racial wage gaps between workers. 81 Enabled by a lack of competition among employers, this discrimination not only had adverse economic impacts for protected groups but also for employers who, due to their own discriminatory actions, ultimately paid higher wages for some equally productive workers. 82 Recent studies highlight how racial wealth disparities reduce labor market competition, since reduced wealth hinders job search abilities. 83 On the flip side, recent research shows that increased labor market participation among racial minorities and women contributed to increased economic output during the second half of the twentieth century. 84 Research on the U.S. patent system finds that racially-motivated violent acts reduced the number of patents by Black inventors in the U.S. during the late 1800s and through the middle of the twentieth century. 85 These patents could have led to new wealth for the inventors and increased business investments, potentially contributing to overall economic growth. In an analysis of data from the National Survey of Small Business Finances, Black led-businesses were found to have been more frequently issued loans with higher interest rates and other unfavorable terms relative to white or male-led businesses, which could reduce productivity and innovation in the broader economy. 86 In housing, recent evidence shows that minority households are steered towards areas with higher rates of poverty, crime, and pollution, and less economic opportunity. 87 Combined, these discriminatory practices have large economic consequences. A 2020 study estimates that if racial gaps in wages, housing, access to higher education, and lending were closed, the U.S. would experience a $5 trillion dollar increase in gross domestic product (GDP) from 2020 to 2025. 88 81 Bayer, P., and K. K. Charles. “Divergent Paths: A New Perspective on Earnings Differences Between Black and White Men since 1940.” The Quarterly Journal of Economics (2018), 1459-1501. Becker, G.S. The Economics of Discrimination. First Edition, The University of Chicago Press, 1957. 82 Becker, G.S. The Economics of Discrimination. First Edition, The University of Chicago Press, 1957. 83 Kate Bahn, Mark Stelzner, and Emilie Openchowski, “Wage discrimination and the exploitation of workers in the U.S. labor market,” Washington Center for Equitable Growth, September 2020, available at https://equitablegrowth.org/research-paper/wage-discrimination-and-the-exploitation-of-workers-in-the-u-s-labor-market/?longform=true. 84 Hsieh et al., “The Allocation of Talent and U.S. Economic Growth,” 2019, available at https://onlinelibrary.wiley.com/doi/epdf/10.3982/ECTA11427. 85 Cook, Lisa D. “Violence and economic activity: evidence from African American patents, 1870-1940.” Journal of Economic Growth 19, no. 2 (2014): 221-257. 86 Laura Alfaro, Ester Faia, and Camelia Minoiu, “Distributional Consequences of Monetary Policy Across Races: Evidence from the U.S. Credit Register” April 2022, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4096092; Ken S. Cavalluzzo, Linda C. Cavalluzzo, and John D. Wolken, “Competition, Small Business Financing, and Discrimination: Evidence from a New Survey,” The Journal of Business, October 2022, available at https://www.jstor.org/stable/pdf/10.1086/341638.pdf?refreqid=excelsior%3Ab05443d9a80629ef03bbe4cb6e7747e4&ab_segments=&origin=&acceptTC=1. 87 Christensen, Peter, and Christopher Timmins. “Sorting or steering: The effects of housing discrimination on neighborhood choice.” Journal of Political Economy 130, no. 8 (2022): 2110-2163. 88 Closing the Racial Wealth Gap: The Economic Costs of Black Inequality in the United States. Citi GPS: Global Perspectives and Solutions. 2020. Available at https://ir.citi.com/NvIUklHPilz14Hwd3oxqZBLMn1_XPqo5FrxsZD0x6hhil84ZxaxEuJUWmak51UHvYk75VKeHCMI%3D. Undue Prejudice and Economic Inefficiency Prejudicial discrimination has been theorized and observed to be an artificial barrier to market activities, and as such, it can create a market distortion. 89 A variety of pathways for agricultural market distortions due to discrimination are possible. For example, if prices paid for otherwise identical cattle differed because of the race, ethnicity, or other producer characteristics that do not have any bearing on productivity, rather than the on the value of the marginal product of the cattle, then the prejudice based on these characteristics distorts prices and in turn both output and investment. While the specifics of producer returns in contract production are different from marketed production, producers receiving a lower contract payment rate or other unfavorable contract terms simply because of the producers' race or other personal characteristics would likewise induce market distortions. 89 Stiglitz, J. “Approaches to the Economics of Discrimination”, American Economic Review, vol. 63/2, May 1973: 287-295. Prejudicial discrimination can take other forms besides wage, contract, or price differentials, such as exclusionary practices in product purchases or sales, or higher lending costs. These examples of artificial barriers preventing resources from moving to their highest and best uses via allocative efficiency, such that marginal benefits equal marginal costs, lead to market inefficiency. Lowering the level of this market distortion would increase market efficiency, albeit noting there is limited information to empirically assess the impacts of discrimination on efficiency in agricultural markets. Undue Prejudice and Potential Market Abuse in Concentrated Livestock Markets Like in other parts of the economy and in other types of markets, those participating in agricultural markets from groups that have and continue to suffer racial, ethnic, gender, and religious prejudices may be particularly vulnerable to market abuses, especially in concentrated markets such as in the livestock sector. This is because they currently represent not only a very small share of producers in the industry, including those in the livestock sector and among producers who have production contracts, but their size, sales, and incomes are lower than other producers, leaving them more economically isolated and with fewer economic resources to counteract concentrated market forces and actors. In the livestock sector, the results of historical prejudice and the risk of present-day prejudice are apparent when looking at data from the 2017 Census of Agriculture, which show that currently a very small fraction of livestock farms with production contracts are operated by Black, Asian, American Indian, or Native Hawaiian producers (Figure 1). As described earlier in this section, discriminatory acts, especially against Black producers, undoubtedly contributed to the current low levels of racial and ethnic minority participation in the livestock sector, including among producers with production contracts. These remaining producers may be particularly vulnerable to market abuses in concentrated livestock markets. EP03OC22.069 Disparities in farm size and income across racial and ethnic groups also exist among livestock and poultry farms with production contracts, highlighting additional vulnerability for particular groups in the sector. Figure 2 shows the percentage and number of livestock and poultry farms with production contracts by the reported race or ethnicity of their producers, categorized by level of Gross Cash Farm Income (GCFI), which includes commodity cash receipts, farm-related income, and Government payments. 90 USDA's Economic Research Service (ERS) classifies small farms as having a GCFI less than $150,000 and up to $349,999 per year, mid-sized farms as having GCFI between $350,000 and $999,999, and large-scale farms as having a GCFI equal to or greater than $1,000,000. Farms are also classified as being non-family farms, which are farms in which an operator or persons related to the operator do not own a majority of the business. 91 These data indicate that contracted livestock and poultry farms with producers who identify as Black and Native Hawaiian are more likely to be in the lower income GCFI categories than their white counterparts. To a lesser extent, farms with producers identifying as Native American also tend to be in the lower income GCFI categories than their White counterparts' farms. Markets dominated by one or a few large packers or live poultry dealers may be less accessible to these smaller farms, which have limited financial or other economic resources with which to engage. They may also be more vulnerable to discriminatory acts or market abuses such as retaliation. 90 U.S. Department of Agriculture, Economic Research Service, “Most farms are small, but large-scale farms account for almost half of production,” available at: https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=58288 (last accessed Aug, 2022). 91 U.S. Department of Agriculture, Economic Research Service, “Farm Structure and Contracting,” available at: https://www.ers.usda.gov/topics/farm-economy/farm-structure-and-organization/farm-structure-and-contracting/ (last accessed Aug. 2022). EP03OC22.070 iii. Specific Proposed Bases In determining the proposed bases for protection under this section, AMS looked to several sources, including the Statement of General Policy Under the Packers and Stockyards Act published by the Secretary of Agriculture in 1968 (Statement of General Policy) (9 CFR 203.12(f)), the regulations governing USDA-conducted programs, and a series of statutes identifying producers that Congress has determined face special disadvantages, are underserved, or are otherwise more vulnerable to prejudices. The Statement of General Policy reflects the current USDA policy on the enforcement of the P&S Act. The Statement of General Policy provides in part that it's a violation of sections 304, 307, and 312(a) of the Packers and Stockyards Act for a stockyard owner or market agency to discriminate, in the furnishing of stockyard services or facilities or in establishing rules or regulations at the stockyard, because of race, religion, color, or national origin of those persons using the stockyard services or facilities. Such services and facilities include, but are not limited to, the restaurant, restrooms, drinking fountains, lounge accommodations, those furnished for the selling, weighing, or other handling of the livestock, and facilities for observing such services. While this part of the Statement of General Policy applies to violations of secs. 304, 307, and 312(a) of the Act—related to the provision of services and facilities at stockyards on an unreasonable and discriminatory basis, almost identical prohibitive language is used in sec. 202 of the Act. Section 202 pertains to packers, swine contractors, and live poultry dealers. Section 202(a) of the Act prohibits any unjustly discriminatory practice or device with respect to livestock, meats, meat food products or livestock products in manufactured form, or live poultry. AMS also considered USDA's general regulatory prohibition against discrimination in USDA programs, which governs how USDA provides services to producers and growers. Most recently updated in 2014, it offers a more current interpretation of anti-discrimination standards. The relevant provision provides that no agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or gender identity, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA. 92 92 7 CFR 15d.3; U.S. Department of Agriculture, “Nondiscrimination in Programs or Activities Conducted by the United States Department of Agriculture,” 79 FR 41406, July 16, 2014, available at https://www.federalregister.gov/documents/2014/07/16/2014-16325/nondiscrimination-in-programs-or-activities-conducted-by-the-united-states-department-of-agriculture (last accessed 8/9/2022). In that rulemaking, USDA identified areas where discrimination against a producer is an unacceptable denial of access to USDA's services. AMS also looked to the legislative mandates that emerged over the last thirty years, directing USDA to make extra efforts to overcome the barriers that prevent members of those groups from accessing USDA's services and agricultural markets generally. 93 Congress adopted numerous statutes seeking to remedy market access barriers on the basis of prejudices across a wide range of areas, including: 7 U.S.C. 8711 (base acres); 7 U.S.C. 2003 (target participation rates); 7 U.S.C. 7333 (Administration and operation of noninsured crop assistance program); 7 U.S.C. 1932 (Assistance for rural entities); 16 U.S.C. 2202a, 3801, 3835, 3839aa-2, 3841, and 3844 (conservation); 7 U.S.C. 8111 (Biomass Crop Assistance Program); 7 U.S.C. 1508 (Federal crop insurance, covering underserved producers defined as new, beginning, and socially disadvantaged farmers or ranchers and including members of an Indian tribe); and 16 U.S.C. 3871e(d) (conservation, covering historically underserved producers defined as beginning, veteran, socially disadvantaged, and limited-resource farmers and ranchers). In 25 U.S.C. 4301(a) and elsewhere, Congress has clearly expressed its intent for the United States government to encourage and foster tribal commerce and economic development. 94 93 For background, see Congressional Research Service, Defining a Socially Disadvantaged Farmer or Rancher (SDFR): In Brief (March 19, 2021), available at https://crsreports.congress.gov/product/pdf/R/R46727/6. 94 See, e.g., Native American Business Development Act, 25 U.S.C. 4301(a). The definitions and coverage in these statutes varies to some extent. Some focus principally on members of groups that have experienced racial or ethnic prejudices, while others include gender prejudices. Additionally, some provide further assistance to new and beginning farmers and military service veterans who are farmers. In sum, these statutes reflect the now multi-decade priority of U.S. agricultural policy to overcome barriers that stand in the way of full market access for all producers and growers, with significant emphasis placed on overcoming certain persistent forms of racial, ethnic, and gender prejudices that obstruct full market access for some producers. In interpreting the P&S Act, AMS has sought to propose a rule that would remove barriers to market access for producers and growers most vulnerable to being denied access. For the purposes of this proposed rule, AMS is proposing a prohibition on undue prejudice on the basis of a covered producer's membership in a vulnerable group. We seek comment on whether to adopt one of several options for the term “market vulnerable individual,” and if so, which one we should adopt. We are also seeking comment on whether to specifically delineate certain protected classes. Because of the Act's broad application discussed in an earlier section, “II.B.i., Authority provided by the Act,” the similar language used in secs. 202, 304, 305, and 312 of the Act, and the series of statutes outlining a range of prejudices identified as being deserving of public policy efforts to ensure full market access, AMS finds it reasonable that members of groups who have been subjected to discrimination, prejudice, disadvantage, or exclusion on the basis of race, ethnicity, or gender should be considered vulnerable and covered by the prohibitions against undue prejudice or disadvantage and unjust discrimination as enumerated by sec. 202 of the Act. AMS is proposing, and seeking comment on, whether a flexible definition of vulnerable group would be advantageous to ensuring inclusive market access for covered producers by permitting an evolving as well as market-specific application of the regulation. Such an approach could address barriers to inclusion as they may arise. At the same time, AMS is seeking comment on how to ensure that most persons that would be protected under the Statement of General Policy and under USDA's general regulations prohibiting discrimination, as noted above, could be protected under this regulation. 95 In particular, as noted above AMS seeks comment on whether to delineate certain specific groups as examples of market vulnerable groups, and also seeks comment on whether it is preferable instead to prohibit discrimination based on protected classes, such as on the basis of race, color, national origin, religion, sex, sexual orientation, gender identity, age, disability, marital status, and family status. AMS seeks additional comment on the appropriate approach to protect market access for and stop unjust discrimination against Indian tribes and tribal members. 95 See, e.g., Pregnancy Discrimination Act, see also Bostock v. Clayton Cnty., Georgia, 140 S. Ct. at 1741. Refusing to deal, providing less compensation, or any other type of discrimination because of a person's particular non-economic characteristics is the type of behavior both the Act and USDA aim to prevent. C. Cooperatives—Proposed § 201.304(a)(1) Proposed § 201.304(a)(1) also specifies that regulated entities, which include packers, swine contractors, or live poultry dealers, may not discriminate against a cooperative of covered producers— i.e., covered producers who collectively work together. For example, individual covered producers may form a cooperative to meet volume or other contractual requirements when they may not be able to meet those requirements by themselves. A covered producer is defined in the proposed regulations at § 201.302 as a livestock producer as defined in this section or swine production contract grower or poultry grower as defined in section 2(a) of the Act. Covered producers acting as a cooperative are an association or group made up of one or more producers collectively processing, preparing for market, handling, and marketing livestock or poultry. The P&S Act includes cooperative associations in the definition of “person” at 7 U.S.C. 182(1), providing that when used in the Act “[t]he term “person” includes individuals, partnerships, corporations, and associations. . .” Covered producer cooperatives improve economic conditions for individual producers. They have been demonstrated to be competitive and responsive to meeting the needs of regulated entities and the market. 96 For example, smaller livestock producers may move towards cooperative agreements on a regional basis to meet buyers' volume requirements. 96 At least some of the drafters of the Act fully expected the Act to be consonant to the goals of cooperatives: “My own conviction is that the cooperative effort of producers and consumers to get closer together in an effort to reduce the spread between them is the most favorable tendency of our time, so far as the question of marketing and distribution is concerned.” 61 Cong. Rec. 1882 (1921). Producers have indicated to AMS that they feel such a move is necessary, owing to the rise of concentration in the markets and the decline in options for smaller producers. Small cattle producers have expressed their concerns to AMS about disparate treatment by packers between large and small producers. Large packers have commonly shown limited interest in dealing with producers that operate on a smaller capacity. On this point, producers have informed AMS that packers are in search of deals with large quantities of product, and if a producer is unable to meet demand for readily available bulk quantities, that producer is unable to compete in the industry. Producers testified in 2010 about packer buyers pulling out of their small-scale feedlots for months in retaliation for producers seeking higher prices and not allotting their entire herd capacity. Packer buyers often prefer to include large quantities on single transactions to lower transactions costs and maximize profits. 97 Adding protections for smaller producers that wish to work together to form cooperatives would enable smaller producers to (1) form cooperatives without fear of prejudice or disadvantage, and (2) reduce transactions costs for individual member producers. 97 U.S. Department of Justice & U.S. Department of Agriculture, Public Workshops, Exploring Competition Issues in Agriculture Livestock Workshop: A Dialogue on Competition Issues Facing Farmers in Today's Agricultural Marketplaces, Fort Collins, Colorado, August 27, 2010. Available at https://www.justice.gov/sites/default/files/atr/legacy/2012/08/20/colorado-agworkshop-transcript.pdf. This proposed regulation is intended, in part, to benefit smaller producers—who lack the necessary land, capital, or financing (or for other reasons may not wish) to establish a large enough operation to meet preferred contractual requirements—by preventing discrimination against their cooperative operations. Through cooperation, one or more producers may be able to jointly meet the requirements and participate as a producer in the industry, allowing producers to operate more efficiently. Preventing discrimination against producer cooperatives will provide another avenue for producers who otherwise might not have been able to participate in the market. While this section proposes that regulated entities may not prejudice or disadvantage cooperatives of covered producers, based on their protected status as a cooperative under this regulation, AMS notes that regulated entities may decline contracting with cooperatives for other justified economic reasons— i.e., for reasons other than the prospective business partner's status as a cooperative. For example, a regulated entity may refuse to contract with a cooperative of covered producers when the contract would not be cost-effective for the entity, regardless of the cooperative status of the producers. In this hypothetical example, the regulated entity would not be unduly prejudicing cooperatives of covered producers based on their status as a cooperative. Instead, the regulated entity would have a nonprejudicial basis for their business decision. AMS notes that antitrust laws also prohibit cooperatives themselves from participating in certain anticompetitive behavior. As discussed earlier, undue prejudice and disadvantage may inhibit producers' ability to obtain fair market value for their livestock and poultry and would be prohibited under proposed § 201.304(a)(1). Proposed § 201.304(a)(1) aims to encourage a diverse agricultural market and prevent undue prejudice and disadvantage and unjust discrimination against cooperatives. Congress has long protected cooperatives in the agricultural space, acknowledging the need for farmers to meet the economic demands of the market. One year after the passage of the P&S Act, Congress passed the Capper-Volstead Act (Pub. L. 67-146), which permits producer cooperatives to collectively process, prepare for market, handle, and market their products. In a decision related to an antitrust action against a nonprofit cooperative association whose members were involved in production and marketing of broiler chickens, the Supreme Court noted that farmers faced special challenges in the agricultural market and therefore cooperatives are afforded legal protections in helping them address those challenges. 98 Congress also passed the Agricultural Fair Practices Act, 99 which provides enhanced protections to those seeking to form a cooperative. In particular, that statute prevents handlers from performing certain types of pricing and contract discrimination, coercion, and other practices that undermine cooperatives. 98 Nat'l Broiler Mktg. Ass'n v. United States, 436 U.S. 816, 825-26, 98 S. Ct. 2122, 2129, 56 L. Ed. 2d 728 (1978) (“Farmers were perceived to be in a particularly harsh economic position. They were subject to the vagaries of market conditions that plague agriculture generally, and they had no means individually of responding to those conditions. Often the farmer had little choice about who his buyer would be and when he would sell. A large portion of an entire year's labor devoted to the production of a crop could be lost if the farmer were forced to bring his harvest to market at an unfavorable time. Few farmers, however, so long as they could act only individually, had sufficient economic power to wait out an unfavorable situation. Farmers were seen as being caught in the hands of processors and distributors who, because of their position in the market and their relative economic strength, were able to take from the farmer a good share of whatever profits might be available from agricultural production. By allowing farmers to join together in cooperatives, Congress hoped to bolster their market strength and to improve their ability to weather adverse economic periods and to deal with processors and distributors.”). 99 Public Law 90-288, Apr. 16, 1968, 82 Stat. 93 (7 U.S.C. 2301 et seq. ). This proposed rule would provide additional protection for cooperatives by preventing a regulated entity from isolating cooperatives through contract termination and preventing cooperatives from accessing markets for their products. As noted above, the P&S Act intended to improve the agricultural market and includes associations in the definition of “person” when referred to in the Act. The Act affords cooperative associations the same protections against discrimination as are afforded to all other covered producers. 7 U.S.C. 182(1). Thus, protections for cooperatives against discrimination were contemplated at the time of the Act's passage. 100 100 H.Rep. No. 85-1048, 1957. D. Enumerated Prejudices Proposed § 201.302(a)(2) outlines an inexhaustive list of prejudices that, if based upon the covered producer's status, the regulation prohibits. The harm that may be done through discriminatory actions cannot be neatly cataloged, but the proposed § 201.302(a)(2) sets forth injuries that the agency believes are inherently prejudicial: offering less favorable terms, refusing to deal, differential contract enforcement, and contract termination or non-renewal. Under proposed § 201.302(b), prejudicial actions are to be considered together with the covered producer's membership in a market vulnerable group or cooperative, and they would not by themselves be violations. AMS seeks comment on the scope of these acts. E. Retaliation i. Retaliation as Discrimination Under the Act Proposed § 201.304(b) would establish protected activities for covered producers and would prohibit regulated entities from retaliatory conduct on the basis of those activities. Regulated entities wield significant economic power given their vertical relationships with producers. Regulated entities choosing to discriminate among producers using their market power advantages for the purpose of preventing certain producers, or groups of producers, from engaging in the behaviors and activities discussed below, is disparate treatment that is unjustly discriminatory. This type of discrimination is oftentimes exercised through retaliation. The method of retaliation may take many forms. Accordingly, the proposed rule is designed to prohibit a variety of adverse actions. However, the proposed regulations are also narrowly tailored, requiring the adverse action to be linked to specific protected activities. Adverse actions not tied to the activities proposed would not be regulated under this proposal. ii. Economic Rationale While the statute does not require market-wide harm as a condition to forbid retaliation, which is an abuse that undermines market integrity, this section explains the adverse economic effects of retaliation, which include harm across the marketplace. Indeed, oligopsonistic or monopsonistic market structures can allow firms with large market shares to use their market power advantage to punish certain producer behaviors that the firm believes could offset their market power advantage or even to punish producer behaviors that are unrelated to the product or service they provide. When firms retaliate by canceling contracts, selectively enforcing contract terms, renewing contracts with unfavorable terms for the producer, or otherwise impairing producers' ability to remain economically competitive as a penalty for their engagement in the activities identified in the next section, that conduct likely results in economic inefficiencies and should be prohibited on a market wide basis, even if the specific retaliatory act only affects one individual. Such impacts are especially difficult to address when those firms maintain dominant positions in the markets. Retaliation against even one seller could presumably have a market-wide chilling effect on others (at least within the area where the retaliating entity is dominant). However, the ability to use such a tool does require the right conditions, such as those that exist in concentrated livestock markets where, in many cases, few or one firm hold a dominate position. It is unlikely that packers or poultry dealers operating in highly competitive markets (in which they are not in a dominant economic position) could effectively use retaliation, since livestock producers could simply find other buyers with whom to do business. Economic measures of firm concentration may help to identify when retaliation may be more easily employed in a market, albeit noting that an empirical relationship between retaliation and concentration measures in livestock markets has not been established. The following table shows the level of concentration in the livestock and poultry slaughtering industries for 2010-2020 using four-firm Concentration Ratios (CR4). Table 2—Four-Firm Concentration Ratio in Livestock and Poultry Slaughter 101 Year Steers & heifers (%) Hogs (%) Broilers (%) Turkeys (%) 2010 85 65 51 56 2011 85 64 52 55 2012 85 64 51 53 2013 85 64 54 53 2014 83 62 51 58 2015 85 66 51 57 2016 84 66 50 57 2017 83 66 51 53 2018 84 70 54 55 2019 85 67 53 55 2020 81 64 53 55 The table shows the combined market share of the four largest steer and heifer slaughterers remained stable between 83 and 85 percent from 2010 to 2019 and dropped to 81 percent in 2020. Four-firm concentration ratios for hog and broiler slaughter has also remained relatively stable between 62 and 70 percent and 51 and 54 percent, respectively. The data above are estimates of national four-firm concentration ratios at the national level, but the relevant economic markets for livestock and poultry may be regional or local, and concentration in the relevant market may be higher than the national level. 101 U.S. Department of Agriculture, AMS Packers and Stockyards annual reports. Available at https://www.ams.usda.gov/reports/psd-annual-reports (last accessed 8/9/2022). As discussed previously, regional concentration is often higher than national concentration for hogs. 102 Based on AMS's experience conducting investigations and monitoring cattle markets, there are commonly only one or two buyers in some local geographic markets, and few sellers have the option of selling fed cattle to more than three or four packers. 102 Wise, T. A., S. E. Trist. “Buyer Power in U.S. Hog Markets: A Critical Review of the Literature,” Tufts University, Global Development and Environment Institute (GDAE) Working Paper No. 10-04, August 2010, available at: https://sites.tufts.edu/gdae/files/2020/03/10-04HogBuyerPower.pdf.TAbl (last accessed 8/9/2022). Though poultry markets may appear to be the least concentrated in terms of their national four-firm concentration ratios, relevant economic markets for poultry growing services are more localized than markets for fed cattle or hogs, and local concentration in poultry markets is often greater than in hog and other livestock markets. The following table highlights this issue by showing the limited ability a poultry grower has to switch to a different integrator using the Herfindahl-Hirschman Index (HHI). 103 Similar to a CR4, HHI is an indicator of market concentration, with the index being increasing as market shares across firms (packers) become more unequal and/or the number of these firms decrease. Markets with HHIs above 2,500 are in some cases considered highly concentrated. The following table is a modification of a table in MacDonald (2104), adding HHI indices to the latter's calculations of the integrators in the broiler grower's geographic region. The HHIs in the table assume equal market share for each integrator, and as such are the minimum HHIs possible (at least with 2 to 4 growers). They show that 88.4% (72.2%) of growers are facing an integrator HHI of at least 2,500 (3,333). The data suggests that the majority of contract broiler growers in the U.S. are in markets where the sellers have the potential for market power advantage. 103 MacDonald, James M., and Nigel Key. “Market power in poultry production contracting? Evidence from a farm survey.” Journal of Agricultural and Applied Economics 44, no. 4 (2012): 477-490. Table 3—Integrators in the Broiler Growers' Region and Associated Market Power Indices Integrators in grower's area Minimum HHI of integrators in grower's area Farms Birds Production Can change to another integrator Number Percent of total Percent of farms 1 10,000 21.7 23.4 24.5 7 2 5,000 30.2 31.9 31.7 52 3 3,333 20.4 20.4 19.7 62 4 2,500 16.1 14.9 14.8 71 >4 7.8 6.7 6.6 77 No Response 3.8 2.7 2.7 NA Retaliation by oligopolistic or monopolistic firms can be effectuated in the pursuit of economic self-interest or be done against such interest for some nonpecuniary reason. 104 In the case of economic self-interest, oligopsonistic or monopsonistic integrators or packers may use retaliation to facilitate their ability to earn excess rents. However, this use of retaliation, as a means to protect excess profits, is only possible when markets for livestock are characterized by few integrators or packers. Where producers have few, if any, alternative packers, or integrators to engage with, the act of not renewing a contract, as retaliation for unfavorable behavior or actions, can cause economic inefficiencies. 104 Fehr, Ernst, and Simon Gächter. “Fairness and retaliation: The economics of reciprocity.” Journal of economic perspectives 14, no. 3 (2000): 159-181. Retaliation may also be used by integrators and packers to ensure that regulators or new entrants cannot discipline their behavior in the marketplace. Both regulators and new entrants may be inhibited by the inability to communicate with market participants. Regulators may be unable to obtain the information needed to learn of or establish violations, while prospective new entrants may be unable to establish necessary market relationships with industry participants. Many producers have expressed concerns about retaliatory behavior from regulated entities with respect to activities inextricably relevant to the livestock and poultry markets. Examples include contract poultry and hog producers afraid to talk with USDA representatives, file comments with USDA (or not file comments that adopt their integrator's view), seek enforcement of contracts, organize associations, or even attend association meetings, opt out of arbitration, complain about feed outages and company personnel behavior, and question the need for farm upgrades. 105 In cattle and independent hog production, private complaints to AMS include fear that packers will refuse to visit farms or feedlots, offer bids on livestock, purchase livestock from disfavored producers, and other more subtle behaviors, like delaying delivery or shipment and manipulating where producers fall in order of procurement. 105 U.S. Department of Justice & U.S. Department of Agriculture, Public Workshops Exploring Competition in Agriculture, Poultry Workshop, May 21, 2010, Alabama A&M University Normal, Alabama. Available at Poultry Workshop Transcript ( justice.gov ). In addition, it is also possible that discriminatory or retaliatory acts by packers or integrators intended to prevent the transfer of rents also negatively affect efficiency by reducing the incentives for investment, beneficial coordination of actions, or adoption of innovative production process. In one case, a court found that an integrator retaliated against a grower who was a leader of a growers' association, 106 suggesting both that producer coordination may reduce the packers'/integrators' oligopsony excess profit and that growers' ability to compete in these markets may be harmed by retaliation. In another court case, James v. Tyson Foods, Inc., fifty-four poultry growers sued the integrator for retaliatory actions and were awarded $10 million in damages as a result. 107 106 Terry v. Tyson Farms, Inc., 604 F.3d 272 (6th Cir. 2010). 107 James v. Tyson Foods, Inc., 292 P.3d 10 (Okla., 2012). F. Prohibition on Retaliation—Proposed § 201.304(b) To address the dangers of the retaliatory practices described above, AMS is proposing to add § 201.304(b) to the regulations. Proposed § 201.304(b)(1) would prohibit and provide examples of retaliatory practices by regulated entities against covered producers who engage in protected activities. Proposed § 201.304(b)(2)(i) through (vi) lists these protected activities. Under § 201.304(b)(1), regulated entities would be prohibited from retaliating or otherwise taking an adverse action against a covered producer because the covered producer participated in the activities described in § 201.304(b), to the extent that these activities are not otherwise prohibited by Federal or state antitrust laws. While a group of producers might be protected from retaliation when associating in the production or marketing of livestock, producers would not be protected from the adverse action of packers if the producers engaged in a violation of Federal or state antitrust law. AMS expects that prohibited retaliation would include, but not be limited to termination of contracts, non-renewal of contracts, refusing to deal with a covered producer, and interference in farm real estate transactions or contracts with third parties. The proposed rule is designed to prohibit all such actions with an adverse impact on a covered producer. AMS has chosen these specific examples of retaliation because they represent the retaliatory practices that have been the most common causes for complaints or because AMS has otherwise determined them to be recurring problems in the livestock and poultry industries. Covered producers have experienced termination or non-renewal of their contracts for numerous reasons. Covered producers who have not personally experienced these forms of retaliation have nevertheless expressed fear of such retaliation through direct communication with AMS personnel, at workshops, and in comments on previous related rulemakings. Related to termination and non-renewal of contracts is a regulated entity's refusal to deal. This proposed rule extends protections against retaliation to covered producers who are refused a new contract due to their involvement in protected activities. A regulated entity would also be prohibited from interfering in a covered producer's farm real estate transactions or contracts with third parties. Impeding or obstructing a covered producer's attempts to sell his or her farm or ability to contract with a third party as a result of his or her participation in certain activities hinders a covered producer's ability to freely participate in the market. AMS believes that punishing covered producers or denying them opportunities afforded to other covered producers because they engaged in certain activities is an unjustly discriminatory practice. Not only do retaliatory practices harm individual covered producers; recurrent instances and patterns of retaliation erode market integrity and discourage fairness and competition in the livestock and poultry markets. The specific examples of retaliatory practices listed in the proposed regulation are not meant to be exhaustive; other retaliatory actions with an adverse impact on covered producers would be prohibited as well. When investigating complaints of retaliatory practices that do not conform to one of these examples, AMS would, as it has in the past, continue to use its expertise to determine whether a regulated entity's action has an adverse impact on the covered producer. G. Bases for Protected Activities—Proposed § 201.304(b) AMS has identified three categories of producer activities that we propose to be protected due to concerns about retaliatory behavior from packers, live poultry dealers, and swine contractors. Starting with the recognition that these activities are related to the business of being a producer or grower or involvement in that sectoral or geographic community, the criteria used to establish the three categories—consistent with the Act's purpose to safeguard farmers and ranchers against receiving less than the true market value of their livestock 108 —include the extent to which the activities are supported under existing legal doctrine and the activities' potential to mitigate market power abuses or enhance economic efficiency. The following sections discuss three categories of protected activities: (i) assertion of rights, (ii) associational participation, and (iii) lawful communication, in the context of the criteria. 108 Stafford v. Wallace, 258 U.S. 495 (1922). i. Assertion of Rights The basis of rights in this context is two-fold, including both legal rights derived under various statutes and contractual rights contained in agreements with regulated entities. Assertions of rights may be necessary to ensure that covered producers are receiving appropriate treatment in their dealings with regulated entities. Disputes relating to contract terms and legal compliance could be over differences between the buyer and seller over what constitutes mutually agreeable returns or could even be over issues extraneous to the actual product or service provided by the covered producer. Access to existing legal remedies under state and Federal law may be necessary for covered producers to effectuate their bargained-for exchange in contract [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2022-21114. Public record. Not legal advice.