Organization for Competitive Markets

P.O. Box 6486

Lincoln, NE 68506

www.competitivemarkets.com

First Ever OCM Action Alert (Senate Farm Bill Debate is Occurring Now)

Date: December 5, 2001

OCM has never done an action alert before. Traditionally OCM provides education, information and analysis on competition issues. However, we are distributing this "Action Alert" due to the importance of certain amendments coming up in the Senate on the Farm Bill which are central to the mission of OCM and central to the core concerns of our membership.

Below is a list of these amendments and the names of the Senators anticipated to offer them. A call takes less than five (5) minutes. OCM strongly urges you to call both Senators (TODAY) from your state to support these amendments - regardless of whether your Senator has voted for or against them in the past and regardless of your Senators' party affiliation. Debate on these matters will begin shortly.

Do not underestimate the power of your telephone calls. It is the single most effective way to put pressure on your Senators. Period.

If you don't know the number of your Senators, call the Capitol Switchboard at (202) 224-3121 and ask for your Senator by name. Ask to speak with the legislative aide who handles agriculture. If you get voice mail, leave a short message.

If you have trouble getting through to offices in D.C., please call your Senator’s district office. You can find this number in the government pages of your local phone book. Make sure the district office understands that they are to communicate your message to the D.C. office.

If possible, please take a minute to send us an e-mail at ocm@competitivemarkets.com to let us know what kind of response you received.

***********

What do you tell them?

Try the following message: Promote fair competition and fight concentration in our domestic agricultural markets by supporting these amendments to the Farm Bill to be offered in the Senate floor debate.

1. Support the Wellstone-Grassley-Johnson-Thomas-Dorgan Amendment banning packer ownership of livestock.

2. Support the Dorgan-Johnson captive supply amendment that will make packers negotiate contracts for cattle and hogs openly and publicly, ending secret back-room deals and restoring open markets.

3. Support the Feingold-Grassley-Harkin Amendment prohibiting binding arbitration clauses in agricultural contracts to help stem the tide of abusive contracts used by corporate agribusiness and allowing farmers to choose how to resolve disputes with agribusiness.

4. Support the Harkin Amendment authorizing production contract oversight by the Grain Inspectors, Packers and Stockyards Administration (GIPSA), and limited prohibition on confidentiality clauses in contracts.

5. Oppose any amendment that would weaken or strike the Wellstone-Johnson Country of Origin Labeling amendment passed by the Senate Ag Committee.

***********

Brief Summary of Amendments/Issues:

1. Packer Ownership amendment: The Wellstone-Grassley-Johnson-Thomas-Dorgan amendment will ban packer ownership of livestock. Packers use the cattle they own or control to force independent producers to take lower prices and to disrupt market rallies. This amendment will prohibit packers from owning livestock more than 14 days before they are slaughtered. All farmer owned cooperatives are exempt, and all farmer owned processors with less than two percent of the national slaughter are exempt.

2. Captive Supply amendment: The Dorgan-Johnson amendment banning captive supplies would eliminate the harmful market effects of captive supply livestock by turning the secret deals into an open, public market. Half or more of all cattle, and three quarters of all hogs, are procured under these kinds of agreements everyday. Packers can use these supplies to manipulate prices to the disadvantage of family famers and ranchers, and they use these types of agreements to favor the biggest industrial factory livestock operations. The Dorgan-Johnson amendment would prohibit formula price contracts where livestock is priced with a formula in relation to reported market price rather than negotiating a price. The amendment would also require all forward contracts to have a fixed base price (i.e. base price can be equated to a dollar amount the day the contract is entered into) and that the forward contracts must be traded in an open public market.

4. Arbitration amendment: The Feingold-Grassley-Harkin amendment provides farmer choice by prohibiting binding arbitration clauses in agricultural contracts. Mandatory binding arbitration clauses are used by companies to force farmers to give up their rights to settle a dispute in court. The contracts with arbitration clauses are either signed under duress--farmers have no other choice--or the farmer does not understand that he/she is giving up crucial rights. Prohibiting binding arbitration clauses allows farmers to choose whether to use the court system, arbitration or mediation after a dispute arises and after the farmer has consulted other professionals as to how to best protect his/her rights.

5. Production contracts and confidentiality: The Harkin amendment would bring production contracts within the scope of the Packers & Stockyards Act. It would also prohibit confidentiality clauses in contracts in a limited manner. As to production contracts, livestock producers who sell on the open market are protected by the P&S Act prohibiting unfair and deceptive practices. However, if those producers are in a production contract, they have no such protection. The Harking amendment eliminates this loophole. As to confidentiality, agribusiness drafted contracts often have clauses prohibiting farmers from showing the contract to anyone - for consulting or other reasons. The Harkin amendment would allow producers to show the contracts to legal and financial advisors or family members.

6. Country of origin labeling: The farm bill currently includes a provision on country of origin labeling which Senators Wellstone and Johnson, among others, worked for diligently. It requires labeling of red meat and produce as to country of origin and allows labels of "U.S. origin" only when the product was born/planted, raised/grown, and processed in the U.S. Industry and the commodity groups (NCBA, NPPC) want to either defeat or water down the provision so it is meaningless.

*****end*******