Farm System Reform Act of 2023

To place a moratorium on large concentrated animal feeding operations, to strengthen the Packers and Stockyards Act, 1921, to require country of origin labeling on beef, pork, and dairy products, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Farm System Reform Act of 2023 (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Definition of Secretary. TITLE I—Animal feeding operations Sec. 101. Definitions. Sec. 102. Moratorium on large concentrated animal feeding operations. Sec. 103. Voluntary debt forgiveness and transition assistance program for animal feeding operations. Sec. 104. Integrator responsibilities and liabilities. TITLE II—Amendments to Packers and Stockyards Act, 1921 Sec. 201. Definitions. Sec. 202. Unlawful practices. Sec. 203. Spot market purchases of livestock by packers. Sec. 204. Investigation of live poultry dealers. Sec. 205. Award of attorney fees. Sec. 206. Technical amendments. TITLE III—Labeling of meat and dairy products Sec. 301. Restoration of mandatory country of origin labeling for beef and pork; inclusion of dairy products. Sec. 302. Truth in labeling for meat and meat food products. 2. Definition of Secretary In this Act, the term Secretary I Animal feeding operations 101. Definitions In this title: (1) Agronomic requirement (A) In general The term agronomic requirement (B) Exclusions Planned nutrient applications under subparagraph (A) do not include nutrient indices, risk indices, or other methods that allow land application of manure in excess of crop need. (2) Animal feeding operation; AFO (A) In general The term animal feeding operation AFO (i) for not less than a total of 45 days in any 12-month period, animals (other than aquatic animals) are— (I) stabled or confined; and (II) fed or maintained; and (ii) crops, vegetation, forage growth, or postharvest residues are not sustained in the normal growing season over any portion of the lot or facility. (B) Aggregation Two or more lots or facilities described in subparagraph (A) shall constitute a single animal feeding operation if the lots or facilities— (i) are located within 3 miles of each other; and (ii) are under common ownership or control. (C) Exclusion The term animal feeding operation AFO 7 U.S.C. 202(a) (3) Large concentrated animal feeding operation; large CAFO The term large concentrated animal feeding operation large CAFO (A) 700 mature dairy cows, milked or dry; (B) 1,000 veal calves; (C) 1,000 cattle (including heifers, steers, bulls, cows, and calves) other than mature dairy cows or veal calves; (D) 2,500 swine, each weighing not less than 55 pounds; (E) 10,000 swine, each weighing not more than 55 pounds; (F) 500 horses; (G) 10,000 sheep or lambs; (H) 55,000 turkeys; (I) in the case of an AFO that uses a liquid manure handling system— (i) 30,000 laying hens or broilers; or (ii) 5,000 ducks; or (J) in the case of an AFO that uses a system other than a liquid manure handling system— (i) 125,000 chickens (other than laying hens); (ii) 82,000 laying hens; or (iii) 30,000 ducks. (4) Contract grower The term contract grower (5) Integrator The term integrator 7 U.S.C. 183 (6) Manure The term manure (A) the fecal and urinary excretions of livestock and poultry; and (B) litter, bedding, compost and raw materials, process wastewater, and other materials commingled with the excretions described in subparagraph (A) or set aside for disposal after such commingling. 102. Moratorium on large concentrated animal feeding operations (a) In general No large CAFO may commence or expand operations on or after the date of enactment of this Act. (b) Cessation of operations No large CAFO may continue to operate as a large CAFO after January 1, 2041. (c) Penalties Any person that violates subsection (a) or (b) may be assessed a civil penalty of up to $10,000 per violation, per day, in addition to any other applicable statutory civil penalty or monetary damages assessed pursuant to any State common law judgment. 103. Voluntary debt forgiveness and transition assistance program for animal feeding operations (a) Definition of eligible entity (1) In general In this section, the term eligible entity (2) Exclusion In this section, the term eligible entity (b) Establishment Not later than 180 days after the date of enactment of this Act, the Secretary shall carry out a program to provide grants to eligible entities to permanently transition from operating an AFO to carrying out other activities on the property on which the AFO is located. (c) Payments Under the program established under subsection (b), the Secretary shall provide grants to eligible entities— (1) to partially or fully pay off any outstanding debt of the eligible entity that was incurred to construct and operate the AFO; and (2) to cover costs relating to the transition of the property on which the AFO is located to be used for alternative agriculture activities, such as raising pasture-based livestock, growing specialty crops, or organic commodity production. (d) Requirement As a condition of receiving a grant under this section, an eligible entity shall provide to the Secretary a working lands easement on the property on which the AFO is located that prohibits— (1) the operation of the AFO and any associated waste management system on the easement area; and (2) the use of the easement area for a spray field or land application of manure at rates exceeding crop agronomic requirements for nitrogen and phosphorus. (e) Funding (1) In general On the first October 1 after the date of enactment of this Act, and on each October 1 thereafter, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary to carry out this section $10,000,000,000, to remain available until expended. (2) Receipt and acceptance The Secretary shall be entitled to receive, shall accept, and shall use to carry out this section the funds transferred under paragraph (1), without further appropriation. 104. Integrator responsibilities and liabilities (a) Responsibilities and liabilities (1) In general An integrator that exercises substantial operational control of an AFO, as described in subsection (b), shall be responsible and liable for, with respect to the operation of the AFO— (A) the disposal of dead animals; (B) the disposal of manure, excrement, and other waste; (C) the discharge or release of any air pollutant, including greenhouse gases, from any source located on or activity occurring at the AFO, including enteric processes, manure, and animal feed; (D) the discharge of any pollutant to groundwater or any surface water body, including the production area, manure storage, manure land application area (crop field), tile drain, and agricultural stormwater runoff of the AFO; (E) any harm suffered by the contract grower of the AFO or a third party from any activity described in subparagraphs (A) through (D), or from any other on-property or off-property contamination, including following an extreme weather event; and (F) any adverse health impacts, property value diminution, and loss of use and enjoyment of property suffered by neighboring residents of the AFO due to the operation of the AFO. (2) Duties not transferable The responsibilities and liabilities of an integrator under this subsection shall be nondelegable and non­trans­fer­able to any third party, including any contract grower. (b) Substantial operational control An integrator exercises substantial operational control of an AFO if the integrator— (1) holds an ownership interest in the livestock or poultry, land, or other capital of the AFO; (2) through a growout contract, marketing arrangement, or other arrangement, or through direct supervision of, or on-site participation in, activities at the AFO, controls— (A) the activity of persons working at the AFO; (B) the operation, management, or waste management practices of the AFO; or (C) the manner in which livestock or poultry at the AFO are grown, fed, watered, ventilated, heated, cooled, or medicated; (3) supplies feed, pharmaceuticals, or other inputs to the AFO; or (4) requires a capital investment from the contract grower of the AFO for erecting or expanding facilities at the AFO. (c) Civil actions (1) In general Any person may— (A) bring a civil action against an integrator in an appropriate court to redress any violation of this section or any other law relating to the activities described in this section; and (B) obtain appropriate relief in a civil action under subparagraph (A). (2) Attorney's fees for plaintiff The court shall award a reasonable attorney’s fee as part of the costs to a prevailing plaintiff in a civil action under this subsection. (3) No preemption Nothing in this subsection preempts, alters, displaces, abridges, or supplants any claim or remedy available under any State or Federal law, including common law, that provides a remedy for civil relief. (d) AFO discharges Section 402 of the Federal Water Pollution Control Act ( 33 U.S.C. 1342 (t) AFO discharges The Administrator shall require that all persons exercising substantial operational control (as described in section 104(b) of the Farm System Reform Act of 2023 . II Amendments to Packers and Stockyards Act, 1921 201. Definitions Section 2(a) of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 182(a) (1) in paragraph (8), by striking for slaughter of such poultry under a poultry growing arrangement, regardless of whether the poultry is owned by that person or another person (2) in paragraph (9), by striking and cares for live poultry for delivery, in accord with another's instructions, for slaughter or cares for live poultry in accordance with the instructions of another person (3) in each of paragraphs (1) through (9), by striking the semicolon at the end and inserting a period; (4) in paragraph (10)— (A) by striking for the purpose of either slaughtering it or selling it for slaughter by another (B) by striking ; and (5) by adding at the end the following: (15) Formula price (A) In general The term formula price (B) Exclusion The term formula price (i) any price term that establishes a base from which a purchase price is calculated on the basis of a futures market price; or (ii) any adjustment to the base for quality, grade, or other factors relating to the value of livestock or livestock products that are readily verifiable market factors and are outside the control of the packer. (16) Forward contract The term forward contract (A) a specified lot of livestock; or (B) a specified number of livestock over a certain period of time. . 202. Unlawful practices (a) In general Section 202 of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 192 (1) by redesignating subsections (a) through (f) and (g) as paragraphs (1) through (6) and (10), respectively, and indenting appropriately; (2) by striking the section designation and all that follows through It shall be 202. Unlawful acts (a) In general It shall be ; (3) in subsection (a)— (A) in the matter preceding paragraph (1) (as so redesignated), by striking to: to do any of the following: (B) in each of paragraphs (1) through (6) (as so redesignated), by striking ; or (C) in paragraph (6) (as so redesignated)— (i) by striking (1) (A) (ii) by striking (2) (B) (iii) by striking (3) (C) (D) by inserting after paragraph (6) the following: (7) Use, in effectuating any sale of livestock, a forward contract that— (A) does not contain a firm base price that may be equated to a fixed dollar amount on the date on which the forward contract is entered into; (B) is not offered for bid in an open, public manner under which— (i) buyers and sellers have the opportunity to participate in the bid; (ii) more than 1 blind bid is solicited; and (iii) buyers and sellers may witness bids that are made and accepted; (C) is based on a formula price; or (D) provides for the sale of livestock in a quantity in excess of— (i) in the case of cattle, 40 cattle; (ii) in the case of swine, 30 swine; and (iii) in the case of another type of livestock, a comparable quantity of that type of livestock, as determined by the Secretary. (8) Own or feed livestock directly, through a subsidiary, or through an arrangement that gives a packer operational, managerial, or supervisory control over the livestock, or over the farming operation that produces the livestock, to such an extent that the producer of the livestock is not materially participating in the management of the operation with respect to the production of the livestock, except that this paragraph shall not apply to— (A) an arrangement entered into not more than 7 business days before slaughter of the livestock by a packer, a person acting through the packer, or a person that directly or indirectly controls, or is controlled by or under common control with, the packer; (B) a cooperative or entity owned by a cooperative, if a majority of the ownership interest in the cooperative is held by active cooperative members that— (i) own, feed, or control the livestock; and (ii) provide the livestock to the cooperative for slaughter; (C) a packer that is not required to report to the Secretary on each reporting day (as defined in section 212 of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1635a (D) a packer that owns only 1 livestock processing plant. (9) Take any action that adversely affects or is likely to adversely affect competition, regardless of whether there is a business justification for the action. ; and (E) in paragraph (10) (as so redesignated), by striking subdivision (a), (b), (c), (d), or (e) paragraphs (1) through (9) (4) by adding at the end the following: (b) Unfair, discriminatory, and deceptive practices and devices Acts by a packer, swine contractor, or live poultry dealer that violate subsection (a)(1) include the following: (1) Refusal to provide, on the request of a livestock producer, swine production contract grower, or poultry grower with which the packer, swine contractor, or live poultry dealer has a marketing or delivery contract, the relevant statistical information and data used to determine the compensation paid to the livestock producer, swine production contract grower, or poultry grower, as applicable, under the contract, including— (A) feed conversion rates by house, lot, or pen; (B) feed analysis; (C) breeder history; (D) quality grade; (E) yield grade; and (F) delivery volume for any certified branding program (such as programs for angus beef or certified grassfed or Berkshire pork). (2) Conduct or action that limits or attempts to limit by contract the legal rights and remedies of a livestock producer, swine production contract grower, or poultry grower, including the right— (A) to a trial by jury, unless the livestock producer, swine production contract grower, or poultry grower, as applicable, is voluntarily bound by an arbitration provision in a contract; (B) to pursue all damages available under applicable law; and (C) to seek an award of attorneys' fees, if available under applicable law. (3) Termination of a poultry growing arrangement or swine production contract with no basis other than an allegation that the poultry grower or swine production contract grower failed to comply with an applicable law, rule, or regulation. (4) A representation, omission, or practice that is likely to mislead a livestock producer, swine production contract grower, or poultry grower regarding a material condition or term in a contract or business transaction. (c) Undue or unreasonable preferences, advantages, prejudices, and disadvantages (1) In general Acts by a packer, swine contractor, or live poultry dealer that violate subsection (a)(2) include the following: (A) A retaliatory action (including coercion or intimidation) or the threat of retaliatory action— (i) in connection with the execution, termination, extension, or renewal of a contract or agreement with a livestock producer, swine production contract grower, or poultry grower aimed to discourage the exercise of the rights of the livestock producer, swine production contract grower, or poultry grower under this Act or any other law; and (ii) in response to lawful communication (including as described in paragraph (2)), association, or assertion of rights by a livestock producer, swine production contract grower, or poultry grower. (B) Use of the tournament system for poultry as described in paragraph (3). (2) Lawful communication described A lawful communication referred to in paragraph (1)(A)(ii) includes— (A) a communication with officials of a Federal agency or Members of Congress; (B) any lawful disclosure that demonstrates a reasonable belief of a violation of this Act or any other law; and (C) any other communication that assists in carrying out the purposes of this Act. (3) Use of tournament system for poultry (A) In general Subject to subparagraph (B), a live poultry dealer shall be in violation of subsection (a)(2) if the live poultry dealer determines the formula for calculating the pay of a poultry grower in a tournament group by comparing the performance of the birds of other poultry growers in the group using factors outside the control of the poultry grower and within the control of the live poultry dealer. (B) Exception Under subparagraph (A), a live poultry dealer shall not be found in violation of subsection (a)(2) if the live poultry dealer demonstrates through clear and convincing evidence that the inputs and services described in subparagraph (C) that were used in the comparative evaluation were substantially the same in quality, quantity, and timing, as applicable, for all poultry growers in the tournament group. (C) Inputs and services described The inputs and services referred to in subparagraph (B) include, with respect to poultry growers in the same tournament group— (i) the quantity, breed, sex, and age of chicks delivered to each poultry grower; (ii) the breed and age of the breeder flock from which chicks are drawn for each poultry grower; (iii) the quality, type (such as starter feed), and quantity of feed delivered to each poultry grower; (iv) the quality of and access to medications for the birds of each poultry grower; (v) the number of birds in a flock delivered to each poultry grower; (vi) the timing of the pick-up of birds for processing (including the age of the birds and the number of days that the birds are in the care of the poultry grower) for each poultry grower; (vii) the death loss of birds during pick-up, transport, and time spent at the processing plant for each poultry grower; (viii) condemnations of parts of birds due to actions in processing for each poultry grower; (ix) condemnations of whole birds due to the fault of the poultry grower; (x) the death loss of birds due to the fault of the poultry grower; (xi) the stated reasons for the cause of the death losses and condemnations described in clauses (vii) through (x); (xii) the type and classification of each poultry grower; and (xiii) any other input or service that may have an impact on feed conversion to weight gain efficiency or the life span of the birds of each poultry grower. (d) Harm to competition not required In determining whether an act, device, or conduct is a violation under paragraph (1) or (2) of subsection (a), a finding that the act, device, or conduct adversely affected or is likely to adversely affect competition is not required. . (b) Effective date (1) In general Subject to paragraph (2), paragraph (8) of section 202(a) of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 192 (2) Transition rules In the case of a packer that, on the date of enactment of this Act, owns, feeds, or controls livestock intended for slaughter in violation of paragraph (8) of section 202(a) of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 192 (A) in the case of a packer of swine, beginning on the date that is 18 months after the date of enactment of this Act; and (B) in the case of a packer of any other type of livestock, beginning not later than 180 days after the date of enactment of this Act, as determined by the Secretary. 203. Spot market purchases of livestock by packers The Packers and Stockyards Act, 1921, is amended by inserting after section 202 ( 7 U.S.C. 192 202A. Spot market purchases of livestock by packers (a) Definitions In this section: (1) Covered packer (A) In general The term covered packer 7 U.S.C. 1635 et seq. (B) Exclusion The term covered packer (2) Nonaffiliated producer The term nonaffiliated producer (A) that sells livestock to a packer; (B) that has less than 1 percent equity interest in the packer; (C) that has no officers, directors, employees, or owners that are officers, directors, employees, or owners of the packer; (D) that has no fiduciary responsibility to the packer; and (E) in which the packer has no equity interest. (3) Spot market sale (A) In general The term spot market sale (i) under an agreement that specifies a firm base price that may be equated with a fixed dollar amount on the date the agreement is entered into; (ii) under which the livestock are slaughtered not more than 7 days after the date on which the agreement is entered into; and (iii) under circumstances in which a reasonable competitive bidding opportunity exists on the date on which the agreement is entered into. (B) Reasonable competitive bidding opportunity For the purposes of subparagraph (A)(iii), a reasonable competitive bidding opportunity shall be considered to exist if— (i) no written or oral agreement precludes the producer from soliciting or receiving bids from other packers; and (ii) no circumstance, custom, or practice exists that— (I) establishes the existence of an implied contract (as determined in accordance with the Uniform Commercial Code); and (II) precludes the producer from soliciting or receiving bids from other packers. (b) General rule Of the quantity of livestock that is slaughtered by a covered packer during each reporting day in each plant, the covered packer shall slaughter not less than the applicable percentage specified in subsection (c) of the quantity through spot market sales from nonaffiliated producers. (c) Applicable percentages (1) In general Except as provided in paragraph (2), the applicable percentage shall be 50 percent. (2) Exceptions In the case of a covered packer that reported to the Secretary in the 2020 annual report that more than 60 percent of the livestock of the covered packer were committed procurement livestock, the applicable percentage shall be the greater of— (A) the difference between the percentage of committed procurement so reported and 100 percent; and (B) (i) during each of calendar years 2023 and 2024, 20 percent; (ii) during each of calendar years 2025 and 2026, 30 percent; and (iii) during calendar year 2027 and each calendar year thereafter, 50 percent. (d) Nonpreemption This section does not preempt any requirement of a State or political subdivision of a State that requires a covered packer to purchase on the spot market a greater percentage of the livestock purchased by the covered packer than is required under this section. . 204. Investigation of live poultry dealers (a) Administrative enforcement authority over live poultry dealers Sections 203, 204, and 205 of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 193 , live poultry dealer, packer (b) Authority To request temporary injunction or restraining order Section 408(a) of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 228a(a) or poultry care on account of poultry (c) Violations by live poultry dealers Section 411 of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 228b–2 (1) in subsection (a), in the first sentence, by striking any provision of section 207 or section 410 of (2) in subsection (b), in the first sentence, by striking any provisions of section 207 or section 410 any provision 205. Award of attorney fees Section 204 of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 194 (i) Attorney's fee The court shall award a reasonable attorney’s fee as part of the costs to a prevailing plaintiff in a civil action under this section. . 206. Technical amendments (a) Section 203 of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 193 (1) in subsection (a), in the first sentence— (A) by striking he shall cause the Secretary shall cause (B) by striking his charges the charges (2) in subsection (b), in the first sentence, by striking he shall make a report in writing in which he shall state his findings the Secretary shall make a report in writing in which the Secretary shall state the findings of the Secretary (3) in subsection (c), by striking he the Secretary (b) Section 204 of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 194 (1) in subsection (a), by striking he has his the packer, live poultry dealer, or swine contractor has the (2) in subsection (c), by striking his officers, directors, agents, and employees the officers, directors, agents, and employees of the packer, live poultry dealer, or swine packer (3) in subsection (f), in the second sentence— (A) by striking his findings the findings of the Secretary (B) by striking he the Secretary (4) in subsection (g), by striking his officers, directors, agents, and employees the officers, directors, agents, and employees of the packer, live poultry dealer, or swine packer III Labeling of meat and dairy products 301. Restoration of mandatory country of origin labeling for beef and pork; inclusion of dairy products (a) Definitions Section 281 of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1638 (1) by redesignating paragraphs (1), (2) through (5), (6), and (7) as paragraphs (2), (4) through (7), (9), and (10), respectively; (2) by inserting before paragraph (2) (as so redesignated) the following: (1) Beef The term beef ; (3) in paragraph (2) (as so redesignated)— (A) in subparagraph (A)— (i) in clause (i), by striking lamb beef, lamb, pork, (ii) in clause (ii), by striking ground lamb ground beef, ground lamb, ground pork, (iii) in clause (x), by striking and (iv) in clause (xi), by striking the period at the end and inserting ; and (v) by adding at the end the following: (xii) dairy products. ; and (B) in subparagraph (B), by inserting (other than clause (xii) of that subparagraph) subparagraph (A) (4) by inserting after paragraph (2) (as so redesignated) the following: (3) Dairy product The term dairy product (A) fluid milk; (B) cheese, including cottage cheese and cream cheese; (C) yogurt; (D) ice cream; (E) butter; and (F) any other dairy product. ; and (5) by inserting after paragraph (7) (as so redesignated) the following: (8) Pork The term pork . (b) Notice of country of origin Section 282(a) of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1638a(a) (5) Designation of country of origin for dairy products (A) In general A retailer of a covered commodity that is a dairy product shall designate the origin of the covered commodity as— (i) each country in which or from which the 1 or more dairy ingredients or dairy components of the covered commodity were produced, originated, or sourced; and (ii) each country in which the covered commodity was processed. (B) State, region, locality of the United States With respect to a covered commodity that is a dairy product produced exclusively in the United States, designation by a retailer of the State, region, or locality of the United States where the covered commodity was produced shall be sufficient to identify the United States as the country of origin. . 302. Truth in labeling for meat and meat food products Section 7 of the Federal Meat Inspection Act ( 21 U.S.C. 607 (g) Product of the United States The label of a meat or meat food product may bear the phrase Product of U.S.A. .

Summary: Farm System Reform Act of 2023 This bill places a moratorium on large concentrated animal feeding operations (CAFOs); expands country-of-origin labeling; and expands requirements in the livestock, poultry, and meat markets. Specifically, under the bill, a large CAFO may not commence or expand operations and, after January 1, 2041, may not continue to operate. Further, the Department of Agriculture must provide grants to eligible animal feed operation (AFO) owners to pay off related debt and to transition the property to alternative agriculture activities. Integrators (certain individuals or entities that enter into arrangements with contract growers to raise and care for livestock or poultry at an AFO) that exercise substantial operational control of an AFO are liable and subject to civil action for an AFO's operation, including for dead animal and manure disposal, and for the discharge of air and water pollutants. The bill also expands country-of-origin labeling requirements to include beef, pork, and dairy products. Further, the bill expands requirements and prohibitions under the Packers and Stockyards Act of 1921 in order to increase competition and transparency in the livestock, poultry, and meat markets, including by prohibiting the use of forward contracts (i.e., future livestock delivery to a packer) unless certain requirements are met, such as a firm base price and competitive bidding; establishing that a minimum of 50%, with exceptions, of a covered packer's daily volume of livestock slaughter must be purchased through spot market sales (i.e., the negotiated purchase or sale of livestock that meets specific pricing, timing, and competitive bidding requirements) from nonaffiliated producers; and providing USDA with additional enforcement authorities over live poultry dealers.