I 
118TH CONGRESS 
1ST SESSION 
H. R. 797 
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. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 2, 2023 
Mr. KHANNA (for himself, Ms. BUSH, Mr. LYNCH, Ms. PRESSLEY, Ms. 
BARRAGA´N, Mr. GOMEZ, Mr. NADLER, Mr. BLUMENAUER, Ms. JAYAPAL, 
Mr. BOWMAN, Mr. POCAN, Mr. LEVIN, Mr. KRISHNAMOORTHI, Ms. 
MCCOLLUM, Mr. COHEN, Mr. RASKIN, Mr. MCGOVERN, Ms. MENG, and 
Ms. NORTON) introduced the following bill; which was referred to the 
Committee on Agriculture, and in addition to the Committee on Trans-
portation and Infrastructure, for a period to be subsequently determined 
by the Speaker, in each case for consideration of such provisions as fall 
within the jurisdiction of the committee concerned 
A BILL 
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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 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 ani-
mal 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. 
SEC. 2. DEFINITION OF SECRETARY. 
In this Act, the term ‘‘Secretary’’ means the Sec-
retary of Agriculture. 
TITLE I—ANIMAL FEEDING 
OPERATIONS 
SEC. 101. DEFINITIONS. 
In this title: 
(1) AGRONOMIC REQUIREMENT.— 
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(A) IN GENERAL.—The term ‘‘agronomic 
requirement’’ means the quantity of nutrient 
necessary to achieve a reasonable yield goal for 
a crop, as determined based on land grant uni-
versity fertility rates, soil testing for available 
nutrients, manure analysis, and other planned 
nutrient applications. 
(B) EXCLUSIONS.—Planned nutrient appli-
cations 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 feed-
ing operation’’ or ‘‘AFO’’ means a lot or facility 
at which— 
(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 por-
tion of the lot or facility. 
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(B) AGGREGATION.—2 or more lots or fa-
cilities described in subparagraph (A) shall con-
stitute 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 feed-
ing operation’’ or ‘‘AFO’’ does not include a 
stockyard (as that term is defined in section 
302(a) of the Packers and Stockyards Act, 
1921 (7 U.S.C. 202(a))). 
(3) LARGE CONCENTRATED ANIMAL FEEDING 
OPERATION; LARGE
CAFO.—The term ‘‘large con-
centrated animal feeding operation’’ or ‘‘large 
CAFO’’ means an AFO at which are present not 
less than— 
(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; 
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(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 liq-
uid 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 sys-
tem other than a liquid manure handling sys-
tem— 
(i) 125,000 chickens (other than lay-
ing hens); 
(ii) 82,000 laying hens; or 
(iii) 30,000 ducks. 
(4) CONTRACT GROWER.—The term ‘‘contract 
grower’’ means an owner of an AFO that raises live-
stock or poultry pursuant to a written contract, 
marketing arrangement, or other arrangement with 
an integrator. 
(5) 
INTEGRATOR.—The 
term 
‘‘integrator’’ 
means an individual or entity that contracts with a 
contract grower under a growout contract, mar-
keting arrangement, or other arrangement under 
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which the contract grower raises and cares for live-
stock or poultry at an AFO in accordance with the 
instructions of the integrator for the purpose of 
slaughtering the livestock or poultry or selling the 
livestock or poultry for slaughter, if the livestock or 
poultry is sold or shipped in commerce (as described 
in section 2(b) of the Packers and Stockyards Act, 
1921 (7 U.S.C. 183)). 
(6) MANURE.—The term ‘‘manure’’ means— 
(A) the fecal and urinary excretions of live-
stock and poultry; and 
(B) litter, bedding, compost and raw mate-
rials, process wastewater, and other materials 
commingled with the excretions described in 
subparagraph (A) or set aside for disposal after 
such commingling. 
SEC. 102. MORATORIUM ON LARGE CONCENTRATED ANI-
MAL 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, 2040. 
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(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 pur-
suant to any State common law judgment. 
SEC. 103. VOLUNTARY DEBT FORGIVENESS AND TRANSI-
TION ASSISTANCE PROGRAM FOR ANIMAL 
FEEDING OPERATIONS. 
(a) DEFINITION OF ELIGIBLE ENTITY.— 
(1) IN GENERAL.—In this section, the term ‘‘el-
igible entity’’ means an owner of an AFO. 
(2) EXCLUSION.—In this section, the term ‘‘eli-
gible entity’’ does not include an owner of an AFO 
that is an integrator. 
(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 per-
manently 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— 
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(1) to partially or fully pay off any outstanding 
debt of the eligible entity that was incurred to con-
struct 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 associ-
ated 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 exceed-
ing 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 Octo-
ber 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 
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this section $10,000,000,000, to remain available 
until expended. 
(2) RECEIPT
AND
ACCEPTANCE.—The Sec-
retary shall be entitled to receive, shall accept, and 
shall use to carry out this section the funds trans-
ferred under paragraph (1), without further appro-
priation. 
SEC. 104. INTEGRATOR RESPONSIBILITIES AND LIABIL-
ITIES. 
(a) RESPONSIBILITIES AND LIABILITIES.— 
(1) IN GENERAL.—An integrator that exercises 
substantial operational control of an AFO, as de-
scribed 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 pol-
lutant, 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, includ-
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ing the production area, manure storage, ma-
nure 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-prop-
erty contamination, including following an ex-
treme 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 respon-
sibilities and liabilities of an integrator under this 
subsection 
shall 
be 
nondelegable 
and 
nontransferrable to any third party, including any 
contract grower. 
(b) SUBSTANTIAL OPERATIONAL CONTROL.—An in-
tegrator 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; 
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(2) through a growout contract, marketing ar-
rangement, 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 poul-
try at the AFO are grown, fed, watered, venti-
lated, heated, cooled, or medicated; 
(3) supplies feed, pharmaceuticals, or other in-
puts to the AFO; or 
(4) requires a capital investment from the con-
tract 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 inte-
grator in an appropriate court to redress any 
violation of this section or any other law relat-
ing to the activities described in this section; 
and 
(B) obtain appropriate relief in a civil ac-
tion under subparagraph (A). 
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(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 sub-
section preempts, alters, displaces, abridges, or sup-
plants 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) is amended 
by adding at the end the following: 
‘‘(t) AFO DISCHARGES.—The Administrator shall re-
quire that all persons exercising substantial operational 
control (as described in section 104(b) of the Farm Sys-
tem Reform Act of 2023) over an animal feeding operation 
(as defined in section 101 of that Act) jointly obtain a 
permit under this section for a discharge from the animal 
feeding operation.’’. 
TITLE 
II—AMENDMENTS 
TO 
PACKERS AND STOCKYARDS 
ACT, 1921 
SEC. 201. DEFINITIONS. 
Section 2(a) of the Packers and Stockyards Act, 
1921 (7 U.S.C. 182(a)), is amended— 
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(1) in paragraph (8), by striking ‘‘for slaugh-
ter’’ and all that follows through ‘‘of such poultry’’ 
and inserting ‘‘under a poultry growing arrange-
ment, 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 in-
structions, for slaughter’’ and inserting ‘‘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 pe-
riod; 
(4) in paragraph (10)— 
(A) by striking ‘‘for the purpose of either 
slaughtering it or selling it for slaughter by an-
other’’; and 
(B) by striking ‘‘; and’’ at the end and in-
serting a period; and 
(5) by adding at the end the following: 
‘‘(15) FORMULA PRICE.— 
‘‘(A) IN
GENERAL.—The term ‘formula 
price’ means any price term that establishes a 
base from which a purchase price is calculated 
on the basis of a price that will not be deter-
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mined or reported until a date that is after the 
date on which the forward price is established. 
‘‘(B) EXCLUSION.—The term ‘formula 
price’ does not include— 
‘‘(i) any price term that establishes a 
base from which a purchase price is cal-
culated 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 ‘for-
ward contract’ means an oral or written contract for 
the purchase of livestock that provides for the deliv-
ery of the livestock to a packer at a date that is 
more than 7 days after the date on which the con-
tract is entered into, without regard to whether the 
contract is for— 
‘‘(A) a specified lot of livestock; or 
‘‘(B) a specified number of livestock over a 
certain period of time.’’. 
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SEC. 202. UNLAWFUL PRACTICES. 
(a) IN GENERAL.—Section 202 of the Packers and 
Stockyards Act, 1921 (7 U.S.C. 192), is amended— 
(1) by redesignating subsections (a) through (f) 
and (g) as paragraphs (1) through (6) and (10), re-
spectively, and indenting appropriately; 
(2) by striking the section designation and all 
that follows through ‘‘It shall be’’ in the matter pre-
ceding paragraph (1) (as so redesignated) and in-
serting the following: 
‘‘SEC. 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:’’ and in-
serting ‘‘to do any of the following:’’; 
(B) in each of paragraphs (1) through (6) 
(as so redesignated), by striking ‘‘; or’’ each 
place it appears and inserting a period; 
(C) in paragraph (6) (as so redesig-
nated)— 
(i) by striking ‘‘(1)’’ and inserting 
‘‘(A)’’; 
(ii) by striking ‘‘(2)’’ and inserting 
‘‘(B)’’; and 
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(iii) by striking ‘‘(3)’’ and inserting 
‘‘(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, pub-
lic manner under which— 
‘‘(i) buyers and sellers have the oppor-
tunity to participate in the bid; 
‘‘(ii) more than 1 blind bid is solic-
ited; 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 
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‘‘(iii) in the case of another type of 
livestock, a comparable quantity of that 
type of livestock, as determined by the Sec-
retary. 
‘‘(8) Own or feed livestock directly, through a 
subsidiary, or through an arrangement that gives a 
packer operational, managerial, or supervisory con-
trol 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 par-
ticipating 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 co-
operative, if a majority of the ownership inter-
est in the cooperative is held by active coopera-
tive members that— 
‘‘(i) own, feed, or control the livestock; 
and 
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‘‘(ii) provide the livestock to the coop-
erative for slaughter; 
‘‘(C) a packer that is not required to re-
port to the Secretary on each reporting day (as 
defined in section 212 of the Agricultural Mar-
keting Act of 1946 (7 U.S.C. 1635a)) informa-
tion on the price and quantity of livestock pur-
chased by the packer; or 
‘‘(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 ac-
tion.’’; and 
(E) in paragraph (10) (as so redesig-
nated), by striking ‘‘subdivision (a), (b), (c), 
(d), or (e)’’ and inserting ‘‘paragraphs (1) 
through (9)’’; and 
(4) by adding at the end the following: 
‘‘(b) UNFAIR, DISCRIMINATORY, AND DECEPTIVE 
PRACTICES AND DEVICES.—Acts by a packer, swine con-
tractor, 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 grow-
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er, 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; 
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‘‘(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 arrange-
ment 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 re-
garding a material condition or term in a contract 
or business transaction. 
‘‘(c) UNDUE OR UNREASONABLE PREFERENCES, AD-
VANTAGES, PREJUDICES, AND DISADVANTAGES.— 
‘‘(1) IN GENERAL.—Acts by a packer, swine 
contractor, or live poultry dealer that violate sub-
section (a)(2) include the following: 
‘‘(A) A retaliatory action (including coer-
cion 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 pro-
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ducer, swine production contract grower, 
or poultry grower aimed to discourage the 
exercise of the rights of the livestock pro-
ducer, swine production contract grower, 
or poultry grower under this Act or any 
other law; and 
‘‘(ii) in response to lawful communica-
tion (including as described in paragraph 
(2)), association, or assertion of rights by 
a livestock producer, swine production con-
tract 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 dem-
onstrates 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 POUL-
TRY.— 
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‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a live poultry dealer shall be in vio-
lation 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 con-
vincing 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 tour-
nament group. 
‘‘(C) INPUTS AND SERVICES DESCRIBED.— 
The inputs and services referred to in subpara-
graph (B) include, with respect to poultry grow-
ers in the same tournament group— 
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‘‘(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 de-
livered 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 poul-
try grower; 
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‘‘(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 de-
scribed 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 viola-
tion under paragraph (1) or (2) of subsection (a), a find-
ing 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) (as designated 
by subsection (a)(2)), shall take effect on the date 
of enactment of this Act. 
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(2) TRANSITION RULES.—In the case of a pack-
er 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) 
(as designated by subsection (a)(2)), that paragraph 
shall take effect— 
(A) in the case of a packer of swine, begin-
ning 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. 
SEC. 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) the fol-
lowing: 
‘‘SEC. 202A. SPOT MARKET PURCHASES OF LIVESTOCK BY 
PACKERS. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) COVERED PACKER.— 
‘‘(A) IN
GENERAL.—The term ‘covered 
packer’ means a packer that is required under 
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subtitle B of the Agricultural Marketing Act of 
1946 (7 U.S.C. 1635 et seq.) to report to the 
Secretary each reporting day information on the 
price and quantity of livestock purchased by the 
packer. 
‘‘(B) EXCLUSION.—The term ‘covered 
packer’ does not include a packer that owns 
only 1 livestock processing plant. 
‘‘(2) NONAFFILIATED
PRODUCER.—The term 
‘nonaffiliated producer’ means a producer of live-
stock— 
‘‘(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, em-
ployees, 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 in-
terest. 
‘‘(3) SPOT MARKET SALE.— 
‘‘(A) IN GENERAL.—The term ‘spot mar-
ket sale’ means a purchase and sale of livestock 
by a packer from a producer— 
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‘‘(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 subpara-
graph (A)(iii), a reasonable competitive bidding 
opportunity shall be considered to exist if— 
‘‘(i) no written or oral agreement pre-
cludes the producer from soliciting or re-
ceiving 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 Com-
mercial Code); and 
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