Biden seeks to lift limits on farmer deals with meat processors, tractor makers

U.S. President Joe Biden delivers remarks at the White House at a celebration of Independence Day in Washington
U.S. President Joe Biden delivers remarks at the White House at a celebration of Independence Day in Washington, U.S., July 4, 2021. REUTERS/Evelyn Hockstein

WASHINGTON, July 6 (Reuters) - President Joe Biden wants to give U.S. farmers more power in negotiating the sale of livestock to big processors and in deciding who repairs their tractors, the White House said on Tuesday.

The executive order, expected within days, will also address such competitive issues as delayed airline baggage, cellphone company practices and Pentagon contracts, a source briefed on the matter told Reuters.

The order would encourage the Federal Trade Commission to limit the ability of farm equipment manufacturers to prevent tractor owners from using independent repair shops or repairing their own equipment.

Reuters first reported the action on repairs earlier on Tuesday and the planned executive order last week.

White House Press Secretary Jen Psaki said on Tuesday the effort would help farmers "fight back against abuses of power by giant agribusiness corporations and give farmers the right to repair their own equipment how they like."

The FTC wrote a report for Congress in May that discussed "Right to Repair," addressing the limits that manufacturers put on who can repair items ranging from mobile phones to home appliances to cars. Such limits may also raise the price of those repairs.

The source said the scope of any "Right to Repair" rules would be set by the FTC.

Biden's order could encourage the FTC to lift further limits consumers face for repairing products they buy.

Some tractor manufacturers like Deere & Co (DE.N), AGCO Corp (AGCO.N) and CNHI (CNHI.MI) use proprietary repair tools and software to prevent third parties from performing some repairs. Shares of the companies fell on news of Biden's plans, first reported by Reuters on Tuesday.

John Deere said in a statement it "does not support the right to modify embedded software due to risks associated with the safe operation of the equipment, emissions compliance and engine performance."

It added that "less than 2 percent of all repairs require a software update, so the majority of repairs farmers need to make, can be made easily."

The FTC did not immediately comment.

The source said Biden and the U.S. Department of Agriculture (USDA) "believe farmers should have the right to repair their own equipment how they like."

Separately, Biden plans to direct the USDA to write rules to boost competition in agricultural industries, including one under the Packers and Stockyards Act making it easier for farmers to bring claims, the White House said. There will also be anti-retaliation protections for farmers who raise concerns about bad practices.

Biden will also direct USDA to issue new rules defining when meat can bear "Product of USA" labels, Psaki said.

Under current labeling rules, meat can be labeled "Product of USA" if it is processed in the United States, even if the livestock is raised overseas and then processed into cuts of meat at a U.S. facility.

Meatpacking has come under increased scrutiny after slaughterhouses closed temporarily during the start of the COVID-19 pandemic last year, boosting prices for meat sold by processors like JBS USA and Tyson Foods Inc (TSN.N) while lowering prices for farmers' livestock.

USDA Secretary Tom Vilsack has said he wants to make agricultural markets more fair and resilient after the pandemic highlighted how concentration in the sector can hurt farmers.

Four companies slaughter about 85% of U.S. grain-fattened cattle that are made into steaks, beef roasts and other cuts of meat for consumers

The USDA said in June it would start working on three rules to strengthen enforcement of the Packers & Stockyards Act, passed 100 years ago to protect farmers and ranchers from unfair trade practices.

Reporting by David Shepardson and Diane Bartz; additional reporting by Tom Polansek and Rajesh Kumar Singh; Editing by Chizu Nomiyama, David Gregorio and Howard Goller

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