In answer to the question by Paul Rebers:
"Some of the local family farmers I have talked to would like to see a
total  ban on the ownership of livestock by packers..   Can this be done on
a state level?"

This message was distributed earlier this week:

From:
Iowa Farmers Union
Legislative Update

Vertical Integration Bill Passes Senate
House Debate Expected Immediately

The Iowa Senate unanimously passed Senate File (S.F. 2309) regarding
vertical integration of the livestock industry.  The bill comes on the heels
of a district court decision allowing Smithfield Foods, a giant North
Carolina based packer, to continue close financial dealings with
Prestage-Stoecker Farms.

The bill tightens Iowa's current packer feeding law by  prohibiting indirect
ownership, control, or operation of a swine operation.  It also prohibits
direct or indirect financing of a swine operation or contract feeding of
swine by a packer.  The bill prohibits packers from obtaining benefits of
production from feeding swine by assuming production risk and prohibits
packers from receiving the net revenues from feeding swine in Iowa.  It also
prevents large investors in packers from controlling swine production.

The bill updates thresholds to exempt small processors. The bill would allow
a packer until June 30, 2004 to divest in order to comply.

The bill also includes a new provision allowing farmer owned and controlled
processing.  Current law only allows farmer cooperative processing.  The
bill would allow a new business with 60% ownership from swine producers to
process hogs.  A single producer would be limited in investment (up to no
more than 10% for smaller facilities, less for larger facilities).  Packer
investment would be prohibited and no less than 25% of the daily slaughter
would be required to be spot cash market purchases from producers who are
non-owners of the facility.

Smithfield Foods has retained prominent lobbyists in the statehouse and has
urged their contract growers to call and write repeatedly to their
legislators and to legislative leadership.

Call and write immediately to urge legislators to pass this important piece
of legislation to prevent vertical integration of the livestock industry.
Your action is needed now!

Support S.F. 2309
Farmers, not packers, should raise livestock.
In 1994, Iowa had 29,000 hog farmers.  In 2001, Iowa had 10,500.
Captive supplies (livestock that the packer controls or owns) drives down
prices for livestock raised by family farmers
Only four packers control 59% of all swine processing

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