Between the Lines

Between the Lines By David Lias A quarter of a million dollars.

That's what South Dakota's Secretary of Agriculture Darrell Cruea estimates his office will need in extra funds just this year to properly process all of the reports his office is receiving from meatpackers now that a new state law requires the packers to provide information on the prices paid for livestock.

Chalk it up as the latest example to come to light of what you get when the state Legislature passes a bad law. We all have to pay the price.

Like I mentioned a couple weeks ago, it was disheartening to see that not long after July 1 arrived (the date the law went into effect) cattle producers actually suffered. The law is so ambiguous that meatpackers had to change their purchasing methods to make sure their businesses practices were still legal.

It took a recent federal court ruling to finally straighten out that mess. The judge, in fact, threw out part of the statute, stating that a portion of the measure forbidding price discrimination by meatpackers is an illegal restraint on interstate trade.

Rules that will be the framework for the law, along with the official reporting forms, will not be ready until after an Aug. 6 hearing.

"We need some form that you can make heads or tails out of," Cruea told the Associated Press, adding that the voluminous information received so far is difficult to analyze and would do farmers and ranchers little good.

"We need to get this data condensed so its usable and can be assimilated."

The intent of the price-reporting law, which was upheld Monday by a federal judge, is to provide the livestock industry with more complete information on the value of their animals. Farmers and ranchers say that will put them in a better bargaining position with meatpackers.

They have been acting like they've won a great victory this week, despite the fact that part of the law has just been thrown out in court.

It's as if no one has taken the time to realize that the portion of the law that remains intact isn't as effective as some lawmakers, including Frank Kloucek, D-Scotland, would lead us to believe.

The new law does not cover the purchase of South Dakota livestock that will be slaughtered in other states. If I understand the law correctly, if a packer purchases livestock for slaughter in another state, the law doesn't apply to them. I have a hunch that's not what farmers, ranchers and lawmakers meant to happen, but this is how this law reads.

It's not an uncommon practice these days for the managers of business to do a bit of brainstorming each year and formulate a vision statement that defines goals for bringing about success in the future.

What's the vision statement of South Dakota's leading industry? State lawmakers can easily come up with lofty goals that sound nice. Fair prices for livestock taken to markets. Greater trade opportunities. Price reporting to make sure farmers and ranchers aren't getting the shaft from those evil, greedy, big corporate meatpackers.

What ever happened to free enterprise? Did it ever occur to anyone that the good old law of supply and demand � which can't be controlled by state Legislatures or court rulings � still is and hopefully always will be a major factor in our farm economy?

It appears that farmers, ranchers and lawmakers are ready to turn their backs on free enterprise, although you seldom hear them admit it. You seldom hear lawmakers like Kloucek talk about the days when producers and packers alike were able to conduct business the good old American way. Free enterprise meant loose regulation of the meatpacking industry. Soon, large companies were swallowing up small companies. Small companies were suffering at the time, because, ironically, farmers were prospering. Livestock prices were high and small packers couldn't compete.

It's like those familiar drawings we've all seen of a small fish about to be swallowed by a larger fish that's about to be swallowed by an even larger fish.

Now a mere handful of packers control nearly 80 percent of the market. Prices are low. Free enterprise suddenly doesn't look that good. Producers are crying foul.

It appears that Kloucek and others are ready to continue passing more and more legislation to inflict more and more legal requirements upon the meatpacking industry. As he and others transform our agricultural destiny, one can't help but the get the feeling that restraint of trade, not free enterprise, will define agribusiness in South Dakota.

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