The Biden administration has unveiled a desperate $1 billion plan intended to fight rampant inflation by attempting to increase competition in the meat and poultry industry.
“Over the last few decades, we’ve seen too many industries become dominated by a handful of large companies that control most of the business and most of the opportunities—raising prices and decreasing options for American families, while also squeezing out small businesses and entrepreneurs,” a fact sheet from the Biden administration read.
“The meat and poultry processing sector is a textbook example, with lack of competition hurting consumers, producers, and our economy.”
The administration has differed blame for issues like inflation and the supply chain bottlenecks on to the companies rather than accepting responsibility for their role in them.
For example, they attempted to blame the supply chain bottlenecks on an oligopoly of four meatpacking companies which control 85% of the packaged beef market, 70% of the pork market, and 54% of the poultry market. Those processors buy from farmers and sell to retailers, making them “a key bottleneck in the food supply chain,” the statement said.
“When dominant middlemen control so much of the supply chain, they can increase their own profits at the expense of both farmers—who make less—and consumers—who pay more,” the statement continued.
“Even as farmers’ share of profits have dwindled, American consumers are paying more—with meat and poultry prices now the single largest contributor to the rising cost of food people consume at home,” it went on.
“And, when too few companies control such a large portion of the market, our food supply chains are susceptible to shocks. When COVID-19 or other disasters such as fires or cyberattacks shutter a plant, many ranchers have no other place to take their animals. Our overreliance on just a handful of giant processors leaves us all vulnerable, with any disruptions at these bottlenecks rippling throughout our food system.”
“The Biden-Harris Administration will dedicate $1 billion in American Rescue Plan funds for expansion of independent processing capacity,” the statement read.
The Biden administration’s directive is the result of several weeks of rhetoric blaming corporations for supply chain problems and rising inflation.
President Joe Biden expressed shock on Monday that the cost of ground beef was so high, blaming consolidation in the meat market among the top processors.
The president recalled a conversation he overheard between his wife, first lady Jill Biden, and a friend, while he was sitting in the kitchen at home.
“She was saying, ‘Do you realize it’s over 5 dollars for a pound of hamburger meat?!’ 5 dollars?” Biden recalled.
“Well this is partly, you know, the pound of beef today costs 5 bucks compared to less than 4 bucks before the pandemic,” the president continued.
“I’ve said it before and I’ll say it again. Capitalism without competition isn’t capitalism, it’s exploitation,” Biden said.
Last month, White House Press Secretary Jen Psaki put the blame on the “greed” of “meat conglomerates” who were “jacking up prices during a pandemic” to take advantage of consumers, she said.
Massachusetts Democratic Senator Elizabeth Warren also blamed corporations for rising prices. “Giant grocery store chains force high food prices onto American families while rewarding executives & investors with lavish bonuses and stock buybacks. I’m demanding they answer for putting corporate profits over consumers and workers during the pandemic,” Warren tweeted.
Author: Kyle Nodin