South Dakota Lawmakers Leading
In Efforts To Restrain Packers

PIERRE, S.D. — South Dakota's state legislature has taken the lead among several states seeking to curb packers' power.

Farmers and ranchers who mobbed the South Dakota Capitol in recent days had another victory to celebrate Monday when the House passed a bill that puts provisions of the federal Packers and Stockyards Act into state law.

Supporters said that will allow the state attorney general to enforce antitrust allegations against meatpackers, who are suspected by many livestock producers of unfairly holding prices down. No one spoke against the bill on the House floor, and it goes next to Gov. Bill Janklow.

The measure is needed because federal officials have ignored the 1921 Packers and Stockyards Act, said Rep. Roland Chicoine, D-Elk Point.

The bill says meatpackers may not conspire with others to buy livestock or control livestock prices.

``We cannot let corporate powers threaten our free and open markets by secretly trading goods between themselves in an effort to drive down prices on the open market,'' Chicoine said. ``We cannot let the packers simply dictate the prices our independent producers receive.''

SB164 says meatpackers may not give special advantages or preferences to those who sell them livestock. Farmers and ranchers have long complained about special contracts that the firms have with large feedlots; critics say the contracts are written so that the terms may not be disclosed by feedlot owners.

The legislation also says packers may not manipulate livestock prices, create monopolies or engage in unfair, discriminatory or deceptive practices.

Rep. Deb. Fischer-Clemens, D-Mitchell, said the bill will help ensure that farmers and ranchers are treated fairly.

``Senate Bill 164, if it were condensed to its most simple explanation would likely read: Thou shalt not steal,'' she said.

``When corporate greed and intimidation threaten the liberty of the marketplace, it is our duty to protect the marketplace so our independent producers can negotiate fair prices,'' Fischer-Clemens added.

Chicoine, who is a retired farmer, said the bill also fits well with legislation signed Monday by Janklow requiring packers to report prices they pay for livestock. Some have worried that the price-reporting measure could backfire on the agriculture industry, but throngs of farmers and ranchers descended on the Capitol to demand its passage.

``If the packers refuse to buy South Dakota livestock just because they have to report prices, then I think they are in clear violation of the federal law,'' Chicoine said. ``And that allows our attorney general to investigate and press charges.''

Janklow had said earlier that he didn't like the price disclosure bill, but said he would sign it.

``We need to say to those who are manipulating the marketplace, do not press down upon the brow of the American livestock producer this crown of thorns,'' railed Rep. Ron Volesky, D-Huron, during the final two-hour debate on the price-reporting bill.

``Do not crucify American agriculture on a cross of corporate secrecy and corporate greed,'' he continued.

The bill not only requires packers to report the prices they pay each day, it also says they may not discriminate in prices paid for similar animals. Those who receive discriminatory prices may sue packers for triple damages.

The measure provides $1000 daily fines for packers who fail to fully report prices.

Even opponents said the legislation is a good idea, but they worried that it could backfire if packers refuse to buy livestock in South Dakota or change their pricing structure so that animals fetch even lower prices. It is taking a chance for South Dakota to pass such a law if other states do not, opponents said.

``We stand the risk to pay a great penalty,'' warned Rep. Larry Diedrich, R-Elkton, a farmer who voted against the bill. ``We have to assume that we are to be the only state that's going to pass this.''

The debate was interrupted on two occasions by thunderous applause and whooping from the crowd in the gallery overlooking the House. To ensure that there were no problems, several uniformed and plainclothes officers mingled in the throng.

Afterward, Terry Etzkorn, who ranches east of Pierre, said he was relieved that the bill passed.

``We've got to start someplace,'' he said. ``Nothing's perfect.''

Many who raise livestock are worried that the bill may harm the industry, but they have strongly urged approval of the bill, said Rep. Mike Koehn, R-Hot Springs.

``They're willing to take the risk, the reason being that doing nothing, they're guaranteed to go out of business,'' he said.

A state price-reporting law will give U.S. Sen. Tom Daschle, D-S.D., additional leverage in Washington for a similar federal law, others said.

``We have one opportunity for him to lead the charge to regain the markets for our producers,'' said Rep. Al Waltman, D-Aberdeen, adding that other states are sure to follow suit with similar laws.

``By not reporting, packers make more money,'' said Rep. Doug Kazmerzak, D-Erwin. ``If you have nothing to hide, then don't worry.''

Another bill aimed at trimming packers' wings failed to fly.

The South Dakota House last week killed a bill 45-24 that would have forbidden any packer with annual sales of at least $10 million from owning livestock.

Those who supported the bill argued that packers can force livestock prices down when they have their own animals to pad operations, killing their livestock when supplies are tight in order to keep market prices down.

Opponents, however, argued that HB1233 is unnecessary.

Rep. Pat Haley, D-Huron, said the bill would put the Legislature on record in support of financially squeezed farmers and ranchers who are at the mercy of large packers.

``We need to do something to help the farmers and ranchers of this state,'' he said in support of the bill.

But Rep. Mike Broderick, R-Canton, said the bill doesn't extend a warm welcome to those who want to do business in South Dakota.

``This is a free enterprise system, and it seems like we've been targeting industries, corporations, and economic development to the point where I'm afraid South Dakota is going to have a black eye from the standpoint of economic development,'' Broderick said.

(Recently, the vice president for procurement at IBP reportedly referred to South Dakota as "the soon to be socialist state," leaving little doubt how his company views developments there. — Ed.)

Haley disagreed. ``Do not confuse a monopoly ... with free enterprise,'' he said of the meatpacking industry.

Others said the bill isn't needed because of a constitutional amendment passed by voters last November that says large corporations cannot own or raise livestock in South Dakota.

``It's a done deal, guys,'' said Rep. Ted Klaudt, R-Walker. ``The protection is there.''

And the Kansas House last Thursday narrowly rejected a similar proposal designed to restrict packer power in that state.

Supporters described the Kansas proposal as a state antitrust law for agriculture that would help family farmers, but opponents saw it as an attack on free enterprise.

The proposal would have prohibited packers from owning hogs or cattle if they sold $20 million or more worth of meat annually. Rep. Bruce Larkin, D-Baileyville, offered it as an amendment to a bill designed to make it easier for companies to file annual reports and other documents with the secretary of state's office.

The vote on the amendment was 59-61, and Larkin said it was close enough to encourage him to offer a similar proposal later. The House passed the bill without amendments, 122-2, sending it to the Senate.

Larkin said his proposal was a response to falling cattle and pork prices, which he blamed on packers' power in the market.

``We see farmers going broke, losing massive amounts of money,'' Larkin said. ``I think it's time we do something as a state to help farmers and consumers.''

Opponents said the amendment would encourage packing companies to move their plants from Kansas. Rep. Sharon Schwartz, R-Washington, called Larkin's proposal ``anti-business.''

``It would be devastating to the state,'' she said.