020233 Packers Fail to Kill Restrictions on Livestock

Washington - In a defeat for the meat industry, the Senate refused to kill proposed restrictions on processors' control of cattle and hog supplies.

The Senate narrowly approved the limits in December as an amendment to legislation extending federal farm programs. But packing companies said the restrictions could cripple their efforts to improve the consistency and quality of meat.

The Senate upheld the restrictions on a procedural motion Tuesday, 53-46.

Separately Tuesday, the Senate agreed to add $2.4 billion in disaster assistance to the farm bill for growers who lost crops to drought and other weather problems last year.

The Senate rebuffed Western agriculture interests and declined to kill a new program that would subsidize farmers who cut back on their use of water in areas where endangered fish need protection.

The legislation would ban packing companies from owning or having control of cattle, hogs or sheep within two weeks of their slaughter. Packers say that would make it harder to procure adequate supplies of high-quality livestock and improve the consistency of the beef they sell to stores.

The packer restrictions are expected to be a major issue when House and Senate negotiators write the final version of the farm bill. The House-passed farm bill does not contain the packer measure.

The anti-packer amendment is widely popular in the Midwest, where livestock producers fear they are losing their independence and market power as packing houses gain control over livestock production, much as they have already done with the growing of chickens.

Livestock farmers risk being turned into "low-paid employees of packers" as processors take over the production of cattle, hogs and sheep, said Sen. Tim Johnson, D-S.D.

The Senate approved a change in the legislation to clarify that it wouldn't prohibit packers from buying livestock through the use of forward contracts.

Producers have been divided over the ban. The National Cattlemen's Beef Association and the National Pork Producers Council are both opposed, but the American Farm Bureau Federation supports it.

Poultry was exempted from the Senate legislation, and so are packing houses owned by farmer cooperatives.

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