Biden: 'No fair capitalism without competition'

In the United States, a large part of the meat sector is dominated by four parties: JBS, Tyson Foods, Cargill and National Beef Packing. The Biden administration sees the great market power as problematic. Last year, the government made $1,4 billion available to improve the position of livestock farmers and consumers in the chain. It has now been announced in detail what measures are being taken to improve the situation.

Lawsuits settled with money
The suggestion that the concentrated meat processing sector provides undesirable market power is not based solely on suspicion. Companies in the sector have been taken to court on several occasions for illegal price and production agreements that allegedly disadvantaged companies' customers. Last year, several of these types of businesses were 'bought out' by major players accused of exploiting dominant market positions.

For example, Smithfield Foods, part of the Chinese WH Group, reached a settlement in such a case in June. The company settled a criminal case for $83 million. JBS settled a pork price-fixing case last year for $57 million, and Tyson Foods settled with prosecutors in a poultry price-fixing case for $181 million.

'Capitalism without competition is not capitalism'
The central theme in the new plan is increasing competition in the meat processing sector. "Because livestock farmers have very limited options to choose who they sell their animals to, they simply have to accept what the buyer says they can pay," said Biden, who made no secret of his opinion: "Capitalism without competition isn't capitalism".

The Secretary of the US Department of Agriculture, Tom Vilsack, also provided more insight into how the already reserved budget is being used. For example, $100 million will be invested in reducing inspection costs for small processing companies, $32 million will be made available for processors to modernize companies and $100 million will be made available to improve the supply chain in the form of additional cold stores and logistics parks.

However, the majority of the budget ($800 million) is made available to address sector-wide challenges in terms of availability of processing capacity, labor and innovation. In addition, Biden wants to better protect the position of the primary producer through legislation. The government will also enforce existing laws and regulations in the field of competition and competition more strictly.

Vilsack called improving income for agricultural companies the spearhead of the new policy. Analysts told Reuters that the plans could eventually lead to higher payment prices for livestock farmers.