USDA unveils plan to help build small meat processing plants


DES MOINES, Iowa (AP) – The federal government on Friday pledged to spend $ 500 million to encourage the construction of small meat processing plants located closer to farmers who raise chickens, pigs and cows in an attempt to diversify an industry now largely managed by a small number of large companies.

US Secretary of Agriculture Tom Vilsack announced the program in Council Bluffs, Iowa, in addition to an additional $ 150 million to be used for existing small processing facilities with unexpected costs. The goal is to help them recover from the coronavirus pandemic and compete better in the market.

Vilsack said he wants to improve the profitability of ranchers and better serve consumers who increasingly want to know where and how farm animals are raised.

“This is a unique opportunity to transform the food system so that it is more resilient to shock, provides greater value to producers and workers, and provides consumers with an affordable selection of healthy foods produced and purchased locally and regionally by farmers and processors from diverse backgrounds, ”he said.

Last year, the coronavirus pandemic shut down a significant portion of the country’s meat processing capacity when the virus spread rapidly among workers in processing plants. The production bottleneck forced some pig farmers to euthanize animals when they could not find facilities to process them. This sparked a discussion of the dangers of a heavily consolidated meat production industry in which processing takes place in a few large-scale factories owned by a handful of the largest meat production companies.

Pastoralists have also complained about a system that forces them to negotiate livestock sales with a few companies that often do not pay them enough to make a profit, again raising issues of intense consolidation and the need to increase competition. in the packaging industry.

Vilsack said COVID-19 has exposed a “rigid, consolidated and fragile” food system. He said President Joe Biden was determined to bring the balance of power back to the people by investing in building better and fairer markets for producers and consumers.

The money, including the $ 500 million, comes from the American Rescue Plan, a $ 1.9 trillion aid program passed by Congress and signed by Biden in March. It will provide grants, loans and technical assistance to help build new meat and poultry processing facilities. Vilsack said he hopes to have projects underway by early next year.

Vilsack said the USDA also plans to initiate a new rule that will make it easier for farmers to sue companies they contract with for unfair, discriminatory or deceptive practices, and will tighten up the definition of what it means for meat. ‘be labeled as a

“Product of United States” to exclude animals that were raised in other countries but processed in the United States.

The North American Meat Institute, a trade group accounting for 95% of US production of meat and poultry products, has rejected some of the claims about industry consolidation.

Mark Dopp, the organization’s senior vice president and general counsel, said in a letter to USDA officials in June that the coronavirus pandemic had sickened workers at meat processors of all sizes, not just the larger ones. big.

“Creating smaller regional harvesting facilities will not solve this problem,” he said. He added that building more processing plants would also not solve the labor shortage which is one of the biggest problems facing the meat packaging industry.

He said that before the government tries to fix the current system of meat production, it must recognize that its efficiency is responsible for reducing the share of personal disposable income that American citizens spend on food. 17% in 1960 to less than 10% today.

“This remarkable decline is in large part due to systemic efficiencies that allow food processors to offer food to consumers at lower prices,” he said.

Vilsack also pointed out that farmers’ share of every dollar spent on food has steadily declined from 35 cents in the 1970s to around 14 cents in recent years.

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