U.S. Agriculture Secretary Tom Vilsack warned a House panel on Feb. 14 that unless Congress strengthens the federal Commerce Clause soon, “there’s going to be chaos” not only in commodity markets but also in regulatory jurisdictions across virtually all products, services, and statutory obligations.
Mr. Vilsack implored the House Agriculture Committee to spearhead a legislative remedy to counter a May 2023 ruling by the U.S. Supreme Court that upheld a California law that bans the sale of pork from hogs unless the animals are raised in a space that exceeds industry norms.
“I’m not sure that this Congress is going to be able to pass legislation, but, with due respect, I would suggest if we don’t take this issue seriously, we’re going to have chaos in the marketplace because there’s nothing preventing any state from doing what California did,” he said during a six-hour hearing on the stalled, expired five-year farm bill.
In 2018, California voters endorsed Proposition 12, the Farm Animal Confinement Initiative, which mandates “minimum space requirements based on square feet for calves raised for veal, breeding pigs, and egg-laying hens and bans the sale of (a) veal from calves, (b) pork from breeding pigs, and (c) eggs from hens, when the animals are confined to areas below minimum square-feet requirements.”
Almost all pork production in the United States takes place outside California. The state law applies to all pork, regardless of where it was produced.
The National Pork Producers Council, which represents the $26 billion U.S. pork industry, and the Biden administration challenged Proposition 12 as a violation of the dormant Commerce Clause, or Negative Commerce Clause, in the U.S. Constitution.
The clause prohibits states from enacting legislation that discriminates against or excessively burdens interstate commerce.
The Humane Society of the United States, among proponents of the law and respondents in the case before the Supreme Court, argued that states have the right to keep products they deem unsafe and “immoral” out of their markets, including pork from pigs confined under conditions considered harsh by some animal welfare advocates and animal rights activists.
In the court’s majority opinion, Justice Neil Gorsuch wrote that companies that choose to sell products in various states must comply with the laws of those states. There was no evidence, or claim, that the law discriminated purposefully against out-of-state pork producers, he wrote.
House Agriculture Committee Chair Glenn Thompson (R-Pa.), noting that several bills clarifying and bolstering the Commerce Clause have been introduced with little progress, said the Supreme Court in its ruling called on Congress to act.
American consumers are also doing so, he said, referring to preliminary data from a U.S. Department of Agriculture (USDA) study that documents that prices for pork products have increased by as much as 41 percent since the Supreme Court upheld California’s Proposition 12.
“The costs associated with Prop 12 are ‘widespread and extensive,’” Mr. Thompson said, citing the unpublished USDA Chief Economist Office study.
“That same study expressed, ‘These costs have a more severe impact on smaller independent operations’ and that ‘distress placed upon the entire production and marketing chain will lead to ever-increasing consolidation and concentration of the industry,’” he said.
Broader States’ Rights Context
Mr. Thompson said small, independent farmers, often working family-owned lands, tell him that “larger producers that were prepared to enter that market have found that the volume that they prepared for is not there in California” since Proposition 12 was upheld and enforced “so they’re dumping product into other states, crowding out small producers” and further accelerating the loss of farms and farmlands.He asked Mr. Vilsack to “speak to the economic harms from Proposition 12” and tell the committee, “with pork prices going up for consumers and costs going up for producers, who’s winning here?”
Mr. Vilsack said the roots of this regulatory issue are buried in the Articles of Confederation’s “theory and structure that states would basically govern their own activities within their borders,” an “experiment” that ended in “chaos.”
“And I think, frankly, that’s where we are potentially headed” unless Congress can put together a legislative remedy, he said.
“When each state has the ability to define for itself, and for its consumers, exactly what farming techniques or practices are appropriate, it creates the possibility of 50 different sets of rules and regulations, which obviously creates serious concerns for producers because they have no stability and they have no certainty,” Mr. Vilsack said.
He said it was unlikely that Congress, which has yet to pass a fiscal year 2024 budget and is four months late in adopting a five-year farm bill, can “create consistency” in crafting bipartisan legislation to address this issue within the broader context of states’ rights.
“If you apply this standard [upheld by the Supreme Court],” Mr. Vilsack said, “then you’re going to have to discuss some of the more difficult social issues—guns, abortion, et cetera. So I don’t envy the Congress trying to figure this out. I will tell you, though, that if it doesn’t figure it out, there’s going to be chaos.”
Small Farmers Pay Big Price
“We have to do our work in Congress. We have to pass something to preempt [California’s law],” Rep. Randy Feenstra (R-Iowa) said before joining Republicans in chastising the Biden administration for its own regulatory overreach in incorporating carbon-neutral policies adopted under 2021’s Bipartisan Infrastructure Law and 2022’s inflation Reduction Act into the proposed farm bill.But he said there seems to be a disconnect between what Mr. Vlisack is saying and what Mr. Thompson hears when he talks to producers around the country.
The biggest threat to independent, family-owned farms and American consumers is the Biden administration, according to Mr. Thompson.
He said that the “additional costs [producers] are bearing as a direct result of actions taken by this administration, between Department of Labor rules that have ... driven up the cost of labor, to the EPA’s war on crop-protection tools, to the threat of financial regulations that will increase cost of banking,” accelerate the “get bigger or get out” farmer diaspora the administration vows to reverse.
Independent farmers “have been forced into achieving economies of scale to be able to survive” because of the mushrooming costs of regulatory compliance, according to Mr. Thompson.
He said the administration has used the USDA to transform American agriculture by imposing a regulatory overlay of climate change and carbon-neutral regulations that are “putting the squeeze” on farmers and consumers.
