New GIPSA chief stresses fair play
June 15, 2009
DES MOINES (DTN) – Dudley Butler, the new administrator for USDA’s Grain Inspection, Packers and Stockyards Administration, says he won’t be as bad for giant agribusinesses as some people have speculated, but he does plan to carry out a mandate from President Barack Obama to ensure agricultural markets are fair.
“Under our administration, at least in my lifetime, I have never known GIPSA to be part of the president’s agenda,” Butler said in an interview on Thursday at the World Pork Expo. “That’s probably for several reasons, but transparency is important to the administration. Fairness is important to the administration. Rural America is important to the administration. So we at GIPSA have a small part to try to ensure there is balance in the marketplace, that there is integrity and balance.”
An attorney from Benton, MS, who focused heavily on the poultry industry, Butler’s appointment last month and the confirmation of Christine Varney as antitrust chief at the Department of Justice have created rumblings about possible actions in agriculture issues such as packer concentration and antitrust. Agribusiness associations have been briefed to watch out while others who have shouted for reforms in the Packers and Stockyards Act have trumpeted the appointments.
“I get a feeling that there is going to be a lot more interest in the Packers and Stockyards Act in this administration,” Sen. Charles Grassley, R-IA, said Tuesday.
Grassley is co-sponsoring a bill in Congress that would create more transparency in livestock sales and improvements in spot markets. Grassley recently communicated with Varney on those topics, though he hasn’t visited with Butler yet.
Butler, 61, takes over an agency that critics say has a history of failing to do its job. Administrators are typically hauled before congressional committees to get chewed out for not investigating Packers and Stockyard complaints, or not bothering to refer investigative finds to USDA’s legal counsel. Butler promises a change in mindset at the agency.
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“We’re going to do something, I can tell you that,” Butler said. “But I don’t think I am as scary as I was portrayed to be.”
One columnist described Butler as an “anti-corporate activist,” but Butler emphasizes his background as an “agricultural attorney” who also raises cattle and row crops. He also has extensive history as a mediator and arbitrator, which Butler said demands a mindset of being fair to all parties.
“I am not anti-corporate at all,” Butler said. “I am anti-unfairness, if that’s corporate or non-corporate.”
Butler pulled out of his pocket a paper with GIPSA’s mission and quoted, “to protect fair-trade practices, financial integrity for competitive livestock markets, meat and poultry,” he said.
“That’s about as balanced a thing as you can get right there and that’s what we’re going to try to do,” he said.
A key focus now at GIPSA is to complete rulemaking on several provisions from the 2008 farm bill, notably involving fairness in termination of contracts, arbitration, and undue preferences in livestock sales. GIPSA is trying to finalize those new rules by the end of the year. Butler said he wants to make sure all facets of the industry get a chance to review and comment on proposed rules.
GIPSA also is examining some areas where concentration exists in the livestock and poultry industries and what can be done to cope with the lack of competition among major buyers. For instance, poultry farmers have been losing contracts in several states recently. As part of the mandate, or instruction from the farm bill, GIPSA was enlisted to write rules and regulations regarding termination and suspension of contracts.
“We’re looking at some of the areas that are most concentrated,” he said. “Obviously the most concentrated and vertically integrated area is the poultry industry. We have a got a situation now that is pretty paramount in Arkansas and Texas with the largest poultry company in bankruptcy.”
Agribusiness groups and others noted after Butler was named that he helped form the Organization for Competitive Markets, a group that has lobbied for reforms in the relationship between packers and livestock producers. Butler said he was involved in the original meetings to create OCM when producers in Mississippi were battling with a pork producer over contracts. Butler said he has not been a member of OCM for several years.
“That’s just picking out one thing,” he said.
Butler notes he was a member of the National Cattlemen’s Beef Association for several years and even served on NCBA’s task force on mandatory price reporting. Butler has also been a member of R-CALF.
Butler added that as a regulator GIPSA cannot swing the pendulum too far toward the companies or too far toward the farmers. A balance must be there.
“Something I really believe in strongly is authority has to be tempered by common sense,” Butler said.