The Government Accountability Office (GAO) released a report highlighting several failures of Grain Inspection, Packers and Stockyards Administration (GIPSA) to protect farmers under the 1921 Packers and Stockyards Act (PSA). These included failure to investigate farmer cases, and failure to investigate companies’ anti-competitive practices.
Despite the existence of the PSA laws, the increasing power of major meat companies takes a toll and decades passed in which USDA lacked political will to enforce these laws on behalf of farmers and ranchers. The agency responsible for enforcing the PSA was at this time GIPSA.
The CAFO boom contributes to rapid concentration in the industry, as farms get bigger and fewer in number. Companies increasingly become “vertically integrated” – meaning they own every aspect of the production chain, except the farm itself, from hatching the chicks and producing the feed to slaughtering, packaging and branding the final product.
Technology drives forward a new trend of widespread concentration in meat and poultry. The “Confined Animal Feeding Operation” or CAFO starts to take hold across these industries. A CAFO is an enclosed house where livestock and poultry are kept, watered, and fed, and enables thousands of animals to be housed in a small amount of space.
Following pressure from farmers and their advocates, live poultry dealers are added to the Packers and Stockyards Act, giving USDA authority to also oversee big companies’ practices in the chicken industry.
Reacting to public outcry and extreme concentration of power and monopolies in the meat industry, Congress passes the Packers and Stockyards Act (PSA). The PSA is a set of laws designed to prevent big companies from abusing their power – for example by squeezing farmers and ranchers for profits through unfair pay schemes. The PSA formally established the Packers and Stockyards Administration, an agency bound to enforce the new laws.