The Pandemic as a Catalyst for Reform of Meat Processing and Production Regulation: Trump's Invocation of the DPA Highlights Need for a Changed Balance of State and Federal Control over a Critical Industry
Written by Stephanie Kelemen, J.D., Georgetown University Law Center (expected 2022)
In times of deep uncertainty and hardship for many Americans, it is hardly comforting to learn that, “the food supply chain is breaking” in the eyes of Tyson Foods’ Board Chairman. Yet the recent spread of COVID-19 to Northeast Iowa posed a grave threat to the nation’s meat supply as Tyson Foods shut down its Waterloo plant in response to a spike in cases among employees. Tyson was initially hesitant to close the plant but yielded in the face of pressure from the local sheriff and local politicians concerned about an outbreak in the area. By the time the plant closed, 1,031 employees had tested positive for the virus, three had died, and the virus had spread to a local nursing home following visits from Tyson employees.
The closure did not last long as critics sounded the alarm over the impacts of closing a plant responsible for nearly 4% of the nation’s pork supply, especially with other processing plants following suit. Prior to the closure, Governor Reynolds issued an executive order stating that local governments do not have the authority to order business closures, but this advisory could not prevent Tyson from shutting down a factory voluntarily. Thus, in a rare occurrence for the food industry, the federal government stepped in and used its authority under the Defense Production Act to order meat plants to stay open.
Despite the negative ramifications for workers and plant localities, President Trump faced an indisputable dilemma given the nation’s reliance on a small handful of pork processing facilities. When Secretary Perdue confirmed meat plants would be running within the week, President Trump responded, “You’re going to have to push them. Push them more.” Even the brief processing facility closures created significant disruptions in the industry. While retailers are facing meat shortages, swine farms are euthanizing pigs as they run out of capacity to keep pigs that were scheduled to be taken to processing plants. The backlog has caused the price for animals on the hoof to drop while processed meat prices are soaring, a dynamic which President Trump commented may warrant further action from the federal government.
Commentators have come down on both sides, but whether President Trump had the correct response to the crisis is not the most important question. Instead, the nation should be asking why we now face a choice between these two unsavory options. One leading cause is that the federal government’s involvement, though warranted, comes several years too late. By allowing state governments to take the lead on food industry legislation, the federal government has enabled a paradigm that leaves our food system vulnerable.
Differing state regulatory schemes have caused a geographic concentration of certain types of food production, meaning a local disruption can have a disproportionate impact on the nation’s food supply chain. This effect is further exaggerated by the trend toward large corporate farming operations, a trend that has led to a decrease in the total number of hog farms despite an increase in annual hog sales. Today, Iowa is the hog capital of the nation, accounting for over 30% of the nation’s hog sales. Even still, Iowa was the fastest growing state in terms of hog sales between 2007 to 2012. This worsening geographic concentration is likely to continue without federal government intervention.
Though this market distortion is attributable to several types of state regulation, such as zoning and animal cruelty laws, variations in state “right-to-farm” statutes may be largely responsible for the heightened concentration of the hog industry. Right-to-farm laws evolved to prevent nuisance lawsuits against farmers with existing operations in rural areas. All 50 states have right-to-farm laws, but the seemingly small differences have attracted corporate farming operations to certain states, such as Iowa, which are especially farm-friendly. In fact, Iowa’s right-to-farm statute prohibiting nuisance suits against animal feeding operations says that it is “intended to promote the expansion of animal agriculture in this state.” The protections provided to animal feeding operations are so broad that Iowa is the only state to have ever had its right-to-farm statute ruled unconstitutional in certain circumstances.
In a 2004 case, Gacke v. Pork Xtra LLC, homeowners living near a pork processing plant sued for nuisance and claimed the statute had effected a taking of their property. The Iowa Supreme Court created a three-prong test to determine if a plaintiff has the right to sue, finding the right to farm provision unconstitutional as applied to Gacke’s request for relief. In a 2018 case, the Court upheld Gacke and clarified that each prong of the test must be met for the plaintiff to have the right to sue, most notably requiring that the plaintiff had “resided on their property long before any animal operation was commenced” on neighboring land AND “had spent considerable sums of money in improvements to their property prior to construction of the defendant’s facilities.” The high bar created by this test has provided considerable protection to farming operations, especially when contrasted with many states which do not prohibit nuisance suits brought against farming operations that have been in existence for less than a year prior to the plaintiff’s land use.
In many cases, the requirement that there be no animal operation before the plaintiff resided on his or her property has protected farming operations that grew from small family farms, which frequently have little impact on neighboring land, to large corporate operations, which frequently host concentrated animal feeding operations (CAFOs). States which have created a high barrier to nuisance suits have distorted the market by externalizing the costs associated with CAFOs, making corporate farming appear more efficient than it is. Beyond emanating unpleasant smells and noise, residents in communities with swine CAFOs are known to suffer from an array of health conditions. Swine feeding operations can wreak havoc on the local environment through water and air pollution, sometimes killing nearby wildlife. Worse still is the disproportionate impact of hog feeding operations on disempowered communities. In North Carolina, the second-largest swine state, hog CAFOs are concentrated in low-income, minority communities in the so-called Black Belt, a region named for its ties to slavery.
Though the federal government has had some impact on the food industry in the form of environmental regulations, it has largely neglected its role to act where the states are separately incompetent. Often, it has deferred to state enforcement of federal rules. Critics have pointed to lax enforcement of the Clean Water Act and Clean Air Act against CAFOs as enabling a “race to the bottom among states.” For example, some states have prohibited local governments from using zoning authority to step in to handle odor issues.
The food industry is simply too important to be left for state and local governments to squabble over. Given the dysfunction exemplified by the recent pork crisis, the federal government should take an active role to ensure the nation will not go hungry. Some states have attempted to protect local communities by passing legislation prohibiting corporate farming, but in South Dakota Farm Bureau, Inc. v. Hazeltine, the Supreme Court struck down the legislation on Dormant Commerce Clause grounds. Because the Dormant Commerce Clause comes into play when there is no federal legislation and “the burdens imposed on interstate commerce are clearly excessive in relation to the putative local benefits,” the Court set a precedent of labeling farming regulation as an area reserved for the federal government.
If states cannot say no to corporate farming, they should also be prevented from offering perverse incentives to corporate farming operations. Because both types of regulation have the potential to distort market dynamics such that corporate farms cluster in several states, Congress needs to step in to impose uniform farming regulation by passing legislation that restricts either farming practices or the ability of states to protect corporate farming operations. Federal regulation that preempts especially broad right-to-farm laws will disincentivize large farming operations, breaking up the concentration of animal feeding operations in a small number of plants and localities. Though meat processing plants do not create the same opportunities for nuisance suits, the effect will trickle up the food supply chain as processing plants are generally located in close geographic proximity to feeding operations.
The U.S. may be unlikely to face food production issues from a global pandemic in the near future, but the consolidated nature of the meat industry, which President Trump cited as the cause for concern over factory closures, leaves the nation vulnerable to threats such as a natural disaster, worker strike, or even terrorist attack. By contrast, the EU has successfully handled this concern through centralized agricultural regulation. Through a combination of standardized environmental and animal welfare laws as well as import duties for certain food products, the EU has internalized the costs of mass farming. The resulting market fragmentation has enabled the EU food market to continue relatively unaffected by the COVID-19 crisis. Thus, the recent events surrounding pork factory closures should serve as a call to action for the federal government to break up geographic food conglomerates. If Congress preempts state right-to-farm laws, agricultural operations will no longer be incentivized to cluster in just a few states. Additionally, the costs associated with massive farming operations will be internalized, as neighboring residents and municipalities bring nuisance suits, incentivizing a decrease in average farm size. Though there may be other ways to ensure food security, this minor intervention by the federal government could allow market efficiencies to correct our broken system.