Farmers and ranchers can wait no longer. Congress must step in to prohibit deleterious practices associated with the consolidated and vertically integrated sector. Congress must act again. Declare discrimination in non-price procurement terms by processors as to producers as anticompetitive or discriminatory practices unless such benefits are offered to all in an open, public manner. C. Fairness in Contracting.
Contracting provides packers and processors relational market power.
Examples of this type of market power abound in both the poultry and hog contracting sectors. This market power provides the packing and processing firms the ability to pressure farmers and growers in a number of ways. Contracts that require substantial investment for a packer's particular requirements put the farmer at risk of exploitation in the future. These types of contracts are common. In poultry, contracts provide the integrator great discretion in what it may demand as far as capital requirements.