Reuters | Charles Abbott | February 12, 2002
Washington - The U.S. Senate on Tuesday voted to stick with a ban on meatpackers raising livestock or overseeing independent feedlots, despite warnings it could cause huge disruptions in the livestock markets.
On a 53-46 vote, senators rejected an amendment that would have replaced the ban with a nine-month study of the matter. It was a slightly more decisive vote than the initial 51-46 roll call vote on Dec. 14 to institute the ban.
South Dakota Democratic Sen. Tim Johnson, author of the ban, said it was needed to muzzle the power of big packers and save ranchers from becoming "low-paid employees on their own land" carrying out instructions from corporations.
Idaho Republican Sen. Larry Craig, who proposed the nine-month study, said the ban was so loosely written it could cause immense disruptions by outlawing popular and innovative methods for marketing livestock.
The ban was part of a wide-ranging $45 billion farm bill expected to pass the Senate by mid-week. A version of the bill approved by the House of Representatives does not contain similar language, so there still could be challenges when a compromise bill is negotiated.
"I think we're still going to try to work on it in (the House-Senate) conference," said Chandler Keys of the National Cattlemen's Beef Association, which opposed the ban. The ban would discourage investment in ranching, he said, and drive down market prices.
Senators also approved an amendment calling for $2.4 billion in emergency disaster aid, a response to drought in Plains states, and allotted $375 million for states for a new Water Benefits Program, intended to defuse an argument of water rights in the West.
The new program, proposed by Assistant Senate Majority Leader Harry Reid of Nevada, would allow states to help growers improve the efficiency of their irrigation systems, switch to less thirsty crops or lease, sell options or sell water.
Senate Agriculture Committee Chairman Tom Harkin, Iowa Democrat, told reporters there were only a dozen major amendments left. The bill should be passed by Wednesday, he said.
Written every few years, farm bills bundle myriad programs -- crop subsidy, anti-hunger, farm export, agricultural research and rural development -- that cost tens of billions of dollars a year.
The four largest meatpackers -- ConAgra Foods , Cargill, Farmland Industries and Tyson Foods -- raise or hold contracts on one-third of the cattle they slaughter, according to a recent Agriculture Department report.
"I don't want to collapse the livestock industry based on 'maybes' and 'mights,'" Craig said, in arguing against the ban.
Before voting, senators adopted language from Iowa Republican Sen. Charles Grassley to clarify that the ban was not aimed at forward contracting or similar marketing arrangements.
"What this amendment does is crystallize the issue -- whether packers should be packers or packers also should be producers," Grassley said. "Is there any question who will survive this competition?"
Nonetheless, the American Meat Institute warned that the ban "would force massive asset divestitures" which would drive down cattle and hog prices. It also could jeopardize new-style marketing chains that call on producers to provide animals with particular traits.
Beef packers would have six months to dispose of their herds under the Johnson amendments and pork packers would have 18 months.
The amendment would exempt packers who account for less than 2 percent of the slaughter of any given animal and packers owned by cooperatives whose members grow animals for slaughter by the packer.
While large farm groups like the American Farm Bureau Federation and the National Farmers Union supported the ban, it was opposed by meatpackers, the National Pork Council and the National Cattlemen's Beef Association.
Share prices for Tyson Foods and Smithfield Foods Inc. , a leading pork packer, fell on Tuesday while ConAgra's shares rose slightly.
On an 80-17 vote, senators rejected a proposal to create government-matched savings accounts for farmers to tap in hard times. Harkin offered it as a substitute to transferring $49 million a year into food stamps, the major U.S. antihunger program.
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