USDA decides not to move forward with proposed rules from GIPSA
The Trump administration has announced it will withdraw regulations related to the buying and selling of livestock, a move strongly commended by the National Pork Producers Council, which opposed the Obama-era rules.
Agriculture Secretary Sonny Perdue decided not to move forward with an interim final rule of the so-called Farmer Fair Practices Rules, which was written in 2016 by the U.S. Department of Agricultures Grain Inspection, Packers and Stockyards Administration (GIPSA). The agency also announced it will take no further action on a proposed regulation of the Farmer Fair Practices Rules.
"We're very pleased that the secretary will withdraw these bad regulations, which would have had a devastating impact on Americas pork producers," said NPPC President Ken Maschhoff, a pork producer from Carlyle, Ill. "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."
Colin Woodall, the National Cattlemen s Beef Association's Senior Vice President, Government Affairs, today released the following statement in response to USDA's decision to withdraw its controversial Grain Inspection, Packers and Stockyard Administration (GIPSA) interim final rule:
"This is a victory for Americas cattle and beef producers and its a victory for Americas 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 interim final rule would have broadened the scope of the Packers and Stockyards Act (PSA) of 1921 related to using unfair, unjustly discriminatory or deceptive practices and to giving undue or unreasonable preferences or advantages. Specifically, it would have made such actions per se violations of federal law even if they didn't harm competition or cause competitive injury, prerequisites for winning PSA cases. (The proposed rule would have defined the terms in the interim final rule.)
USDA in 2010 proposed several PSA provisions collectively known as the GIPSA Rule that Congress mandated in the 2008 Farm Bill. Although lawmakers did not include a provision eliminating the need to prove a competitive injury to win a PSA lawsuit, the agency included one in its proposed regulation.
"Eliminating the need to prove injury to competition would have prompted an explosion in PSA lawsuits by turning every contract dispute into a federal case subject to triple damages," Maschhoff said. "The inevitable costs associated with that and the legal uncertainty it would have created likely would have caused further vertical integration of our industry and driven packers to own more of their own hogs.".
"That would have reduced competition, stifled innovation and provided no benefits to anyone other than trial lawyers and activist groups that no doubt would have used the rule to attack the livestock industry."
An Informa Economics study found that the 2010 GIPSA Rule today would have cost the U.S. pork industry more than $420 million annually more than $4 per hog with most of the costs related to PSA lawsuits brought under the no competitive injury provision included in the interim final rule.
The long-awaited Interim Final Rule was set to go into effect on October 19th after several delays, and would have restored the rights of farmers and ranchers who are harmed by a meat packing or processing companys anti-competitive and unfair practices. It would have clarified and reiterated the USDAs longstanding position that not all violations of the Packers & Stockyards Act require a showing of harm or likely harm to competition. Under this rule change, an individual farmer or rancher would no longer have had to demonstrate that the entire U.S. market was affected by unfair practices inflicted on him or her and would have been able to seek a fair remedy.
The proposed rule, Unfair Practices and Undue Preferences in Violation of the Packers and Stockyards Act, would have established a list of practices that violate the rule and establish criteria that GIPSA would consider when determining whether a packer, swine contractor, or poultry integrator has engaged in conduct or action that violates the rule.
Mike Weaver, President of the Organization for Competitive Markets (OCM), offered the following statement:
"This withdrawal is a slap in the face to rural America and Americas farmers and ranchers. The administration is allowing multinational corporations led by foreign interests to hold Americas farmers and ranchers hostage with their monopolistic, retaliatory and predatory practices. The GIPSA rule represented a desperately needed change for farmers and ranchers and I am appalled that the administration would choose to support multinational corporate interests over those of our own farmers and ranchers, especially after campaigning on a promise to drain the swamp and Make America Great Again. Since the USDA cannot get the job done, we call on President Trump to issue an executive order to immediately implement the Farmer Fair Practices Interim Final Rule."
Story source: Releases from NPPC, NCBA & OCM