Factory Farms

Laws to protect farmers and farmland and the consumers who depend on them have recently been a focus of struggles for local democracy. At our country’s birth, farming and craftsmanship were the backbone of the economy and the livelihood of most Americans. Technology and the industrial revolution have long since replaced the craftsmen with factories, and every year, more of the factories leave the United States for the underpaid labor and lax environmental laws of vulnerable foreign countries.

Farming is following on the heels of industrial factories. Livestock farming is being concentrated into factory farms that produce tens of thousands of hogs or millions of chickens in one operation. This concentration of livestock production is eliminating farmers from the American economy, and it is no accident. A report prepared for 200 businesspeople and educators making up the Committee of Economic Development (CED)  in 1962 clearly stated their goals:

1.    “a program to permit and induce a large, rapid movement of resources, notably labor, out of agriculture.”

2.    “We have noted that agriculture’s chief need is a reduction of the number of people in agriculture.”

3.    “getting a large number of people out of agriculture before they are committed to it as a career.”

4.    “reduce the number of people committed for their livelihood to farming.”

Thirteen years later, in 1975, the people of Iowa did something to keep farmers in farming. Iowan farmers, who had long lead the country in hog production,  were threatened by the plans of corporate packers to integrate hog production and processing. Through such integration, Virginia-based Smithfield Foods Inc. came to dominate the production of 12 million hogs and the processing of 20 million hogs annually by 2002, calling itself “the world’s largest pork processor and hog producer.” Smithfield Foods, Inc. v. Miller, No. 4:02-cv-90324, 2003 U.S. Dist. LEXIS 915 (SD Iowa, Jan. 22, 2003), p. 3. At that time, Smithfield and three other corporate packers controlled 59% of the processing market, up from 34% in 1989.

To defend themselves from corporate colonization, Iowans passed a law making it illegal for a pork processing company to engage in hog production in the state. Iowa amended the law many times over the years to counter corporate efforts to evade the spirit of the law through creative financial arrangements;  the legislature’s votes are some amendments were unanimous.

Iowa’s packer ban law stated that its purpose was “to preserve free and private enterprise, prevent monopoly, and protect consumers,” Smithfield Foods, Inc., No. 4:02-cv-90324, p. 5n.3. Iowa officials feared that “in controlling production, corporations like Smithfield can also control prices, both of the packaged meat and of live animals,” and “that may result in higher prices at the store and lower prices for Iowa producers who raise the animals.”

The public record reveals that Iowa’s packer ban was a democratic effort by a cross-section of Iowans to protect themselves from the economic and environmental harms posed by the vertical integration and horizontal concentration of hog production.  Farming organizations including the Iowa Farm Bureau, Iowa Pork Producers, and Iowa Farmers Union joined community organizations such as Iowa Citizens for Community Improvement to support the ban.  Gordon Allen, an assistant Iowa attorney general, said, “the Iowa Legislature wanted to make sure livestock producers didn’t face unfair competition from a packer that owned its own livestock.”  Iowan U.S. Senator Tom Harkin reflected the statewide belief “that livestock production in our state should be in the hands of independent producers.”

On July 16, 2002, IPPA president Tim Bierman reiterated these concerns in testimony before the U.S. Senate Committee on Agriculture, which was considering a nationwide packer ban:

[V]ertical integration controls both the supply and the demand for live hogs. Furthermore, vertically integrated companies can shift profits and losses between slaughtering operations or live hog production, which typically farmers can’t do. Vertical integration makes price discovery for live animals almost impossible because the animals are not necessarily sold publicly, they are internally transferred.

The packer ban, then, was a democratic exercise of the state’s police power, an act the Supreme Court described in Thurlow v. Massachusetts, 46 U.S. 504, 589–90 (1847), as one of self-preservation:

The acknowledged police power of a State … is a power essential to self-preservation, and exists, necessarily, in every organized community. It is, indeed, the law of nature, and is possessed by man in his individual capacity. He may resist that which does him harm, whether he be assailed by an assassin, or approached by poison. And it is the settled construction of every regulation of commerce, that, under the sanction of its general laws, no person can introduce into a community malignant diseases, or any thing which contaminates its morals, or endangers its safety. And this is an acknowledged principle applicable to all general regulations. Individuals in the enjoyment of their own rights must be careful not to injure the rights of others.

From the explosive nature of gunpowder, a city may exclude it. Now this is an article of commerce, and is not known to carry infectious disease; yet, to guard against a contingent injury, a city may prohibit its introduction. These exceptions are always implied in commercial regulations, where the general government is admitted to have the exclusive power. They are not regulations of commerce, but acts of self-preservation. And although they affect commerce to some extent, yet such effect is the result of the exercise of an undoubted power in the State.

Responding to democracy, Smithfield Foods joined Murphy Farms LLC and Prestage-Stoecker Farms, Inc. to sue Iowa in federal court to nullify the packer ban. The corporations argued that the ban violated their rights under the Commerce Clause of the U.S. Constitution by discriminating against out-of-state companies to protect Iowa’s in-state economy.

Although the packer ban applied to corporate processors both in and out of Iowa, the federal district court nullified it because it contained an exception for Iowa cooperatives, leading the court to accept Smithfield’s argument on illegal discrimination. Smithfield Foods. Inc., No. 4:02-cv-90324, p. 17. Instead of severing the exception for Iowa cooperatives and preserving the rest of the law, as Iowa asked and the court could have done, the court nullified the entire law.

Speaking of the ruling, Lisa Whelan, spokeswoman for Iowa Citizens for Community Improvement, said, “It’s going to make it even harder for the family farmer to survive. It’s cutting them out of the market.”  Curtis Meier, president of Iowa Pork Producers Association and farmer of a 140-sow farrow-to-finish operation, said the ruling “impedes market access, especially for smaller producers.”  Iowa Farm Bureau president Craig Lang echoed these concerns: “Once you lose the independent farmers’ ability to participate in the market …, you lose the ability to have a true supply-and-demand situation.”

Smithfield vice president Richard Poulson replied to these concerns by assuring Iowans that its system of vertical integration and contract farming “will be the best for Iowa.”  Cutting to the issue of democracy, Iowa Farmers Union president Gary Hoskey responded, “How long will it be before Smithfield tells us what’s best for our environment and the economy of Iowa. The framers of the U.S. constitution could not have envisioned that someday a multi-national corporation like Smithfield would try to take over food production and dictate to states about what is best for them.”  Farmer and U.S. Senator Chuck Grassley said, “Do we want every family farmer in the United States eventually to be an employee of Smithfield, or not?”