USDA News

The U.S. Department of Agriculture Oct. 17 announced it is withdrawing the Grain Inspection, Packers and Stockyards Administration interim final rule regarding the scope of the Farmer Fair Practices Rules of the Packers and Stockyards Act, and will not finalize the rules.

The rules, often called the Farmer Fair Practices Rules, were intended to enhance the power of livestock growers in relationships with buyers and processors.

While the GIPSA rules on Unfair Practices and Undue Preferences in Violation of the Packers and Stockyards Act won’t be finalized, GIPSA’s proposed rule on Poultry Grower Ranking Systems is still under consideration.

Colin Woodall, the National Cattlemen’s Beef Association's senior vice president for government affairs, said in a release, “This is a victory for America’s cattle and beef producers—and it’s a victory for America’s consumers. Agriculture Secretary Sonny Perdue deserves a great deal of thanks and credit for this smart decision.

“The proposed rule would have crippled cattle producers’ ability to market their products through the value-added programs that help make American-produced beef the most delicious and nutritious in the world. This is a decision worthy of celebrating this evening with a top-quality steak.”

The United States Cattlemen’s Association President Kenny Graner said his group was disappointed with the announcement.

“The proposed and interim rules sought to maintain competition in the marketplace; withdrawing the rule is a win for multi-national packers and fails to put U.S. cattle producers first,” Graner said. “USCA has been committed to seeing through necessary clarifications to the Packers and Stockyards Act and a withdrawal of the rule does not solve the problems in today’s marketplace.

“Anti-competitive buying practices and the lack of true price discovery remain critical issues to our industry and ones that must be addressed. The issues remain the same, regardless of (the) announcement, and USCA will look to work with industry, Congress, and the administration on addressing the loopholes still remaining by the result of withdrawing the rule.”

National Pork Producers Council President Ken Maschhoff, a pork producer from Carlyle, Illinois, said, “We’re very pleased that the secretary will withdraw these bad regulations, which would have had a devastating impact on America’s pork producers. The regulations would have restricted the buying and selling of livestock, led to consolidation of the livestock industry—putting farmers out of business—and increased consumer prices for meat.”

National Farmers Union President Roger Johnson responded to the announcement, saying, “It is deeply disappointing that USDA did not side with family farmers in the long-contested debate over rules for the Packers and Stockyards Act. The Farmer Fair Practices Rules offered a basic, yet important first step to addressing the unfair practice that family farmers and ranchers face in the extremely consolidated meatpacking industries.

“The withdrawal of the competitive injury rule is unjustified, given the long-held, plain language interpretation by the Department that growers do not need to prove harm to the entire industry when seeking relief from poultry companies for unfair contract practices. It is particularly egregious given the abuses that poultry growers face in the vertically integrated marketplace. 

“With this decision, USDA has given the green light to the few multinational meatpackers that dominate the market to discriminate against family farmers. As the administration has signaled its intent to side with the meat and poultry giants, NFU will pursue congressional action that addresses competition issues and protects family farmers and ranchers.”

Senate Agriculture Committee Chairman Pat Roberts, R-KS, commended USDA for rolling back the rule.

“Rural America has received long-awaited good news,” Roberts said in a news release. “In the heartland, farmers and ranchers applaud the rollback of the ‘GIPSA’ rules.

“The Obama administration spent the better part of a decade ignoring the calls from farmers, ranchers, and agriculture economists warning of the billion dollar blow this rule would have levied against American agriculture,” Roberts said.

“Secretary Perdue’s actions today demonstrate the Trump administration’s commitment to promoting economic prosperity and reducing regulatory burdens in rural America.”

House Agriculture Committee Chairman Mike Conaway, R-TX, and House Agriculture Livestock and Foreign Agriculture Subcommittee Chairman David Rouzer, R-NC, also praised the decision.

“After nearly a decade of battling partisan and contentious GIPSA reforms, America’s livestock, poultry and packing industries can breathe a sigh of relief,” Conaway said.

“(This) decision helps restore both Congressional intent and common sense by ensuring American producers have the freedom to market their products without the threat of frivolous lawsuits,” Conaway said.

“I appreciate the Trump administration’s dedication to regulatory reform through the rollback of unnecessary and burdensome regulations like these. I am particularly thankful for Secretary Perdue’s leadership on this effort and look forward to working with him to ensure that other problematic regulations like the organic livestock rule meet the same fate.”

Said Rouzer, “Excessive regulations with questionable legal backing ultimately lead to a wave of lawsuits and to years of litigation. The withdrawal of the GIPSA rule brings years of regulatory uncertainty in our livestock, poultry and packing industries to an end. I applaud the Trump administration, along with Secretary Perdue, for their hard work on behalf of rural America to roll back these cumbersome regulations,” Rouzer said.

Larry Dreiling can be reached at 785-628-1117 or ldreiling@hpj.com.

(1) comment

Tom Terry

So they have gutted the Packers and Stockyards Act (PSA). What else is new? The political elite love to give their cronies presents to repay them for their patronage. Meanwhile, the economic harm done to participants in the economy because of the abuse of market power (the chief problem with lack of competition in the markets) by the meat packers. This law was written to prohibit meat packers from capturing the value of family farmers with their market power. Now they have to pay no price for it even though they break enumerated provisions in the PSA that are meant to protect the market.

To make it worse, the whole idea of proving harm to competition is, well, economic illiteracy. If meat packers capture the value from family farms by exercising market power, they gain lower prices and continual supply from famuily farmers. The continual supply comes in because the family farmers are never allowed to get the value of their investment and are forced into huge investments that hold them hostage to the meat packers. Breaking the prohibitions in the PSA ARE HARMS TO COMPETITION. It gives meat packers lower costs because they are using their market power to capture other participant's value. It creates a barrier of entry to any real competitor on their level. It also allows collusion of the same circumstances by other meat packers to do the same. IT IS HARM TO COMPETITION by definition.

You just can't fix stupid. Money in our political system makes sure that it stays. It is part of the reason Congress has such a low rating by the public. They are too busy tilting the economy and existing laws in the favor of their cronies. Yes, one of the persons shot in the Congressional baseball game was an imbedded crony from Tyson. It seems more and more unlikely that we will be able to fix the corruption in Washington D.C. Some of the federal judges in these cases are serving on the wrong side of the bench although I think life time sentences are definitely earned.

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