USDA pulls GIPSA rule |

USDA pulls GIPSA rule

The Agriculture Department today will announce it is withdrawing the Grain Inspection, Packers and Stockyards Administration (GIPSA) interim final rule regarding the Scope of Sections 202(a) and (b) of the Packers and Stockyards Act, and will not finalize the rule on Unfair Practices and Undue Preferences in Violation of the Packers and Stockyards Act.

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

GIPSA's proposed rule on Poultry Grower Ranking Systems is still under consideration.

The U.S. Cattlemen's Association had long fought for the rule.

Jess Peterson, the Washington lobbyist for the group, said in a statement, "The U.S .Cattlemen's Association is disappointed in [Agriculture] Secretary [Sonny] Perdue's announcement. A lot of work and time went into making these needed clarifications to the Packers and Stockyards Act."

"Withdrawing these proposed rules does not make the problem go away, and in fact creates a loophole in which anti-competitive buying practices are not being properly addressed," Peterson said.

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"The lack of true price discovery and cash cattle trades continues to be a drag on the long-term viability of the U.S. cattle industry. Meat packers might have won the day on this one, but the problems remain and solutions are needed. The U.S. Cattlemen's Association stands ready to work with fellow cattle industry leaders, Congress and USDA to address the current loopholes within the Packers and Stockyards Act."

Other meat organizations had opposed the rule on the grounds that it would interfere with modern business practices.

"We're very pleased that the secretary will withdraw these bad regulations, which would have had a devastating impact on America's pork producers," said National Pork Producers Council 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."

The effective date for implementation of the interim final rule was scheduled for Thursday.

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

"Today, 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 Michaell Conaway, R-Texas, and House Agriculture Livestock and Foreign Agriculture Subcommittee Chairman David Rouzer, R-N.C., 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.

"Today's 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 Conaway.

"Excessive regulations with questionable legal backing ultimately lead to a wave of lawsuits and to years of litigation," said Rouzer.

"The withdraw 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.

USDA does not appear to have issued a news release, but Blake Rollins, director of the Office of External and Intergovernmental Affairs, sent the following statement to stakeholders:

"USDA and GIPSA remain committed to protecting fair trade practices, financial integrity, and competitive markets for livestock, meat, and poultry. After careful consideration of public comments, we are withdrawing the Interim Final Rule (IFR) regarding the Scope of Sections 202(a) and (b) of the Packers and Stockyards Act.

"As many public comments noted, the purpose of the act is to protect competition, not individual competitors. Additionally, the IFR conflicted with case law, which Congress has declined to overturn through legislation," Rollins said. "Withdrawal of the IFR is also consistent with President Trump's executive order to reduce regulations and control regulatory costs."

"We are taking no action at this time on the other rule proposed on December 20, 2016, regarding Poultry Grower Ranking Systems," Rollins said. "We continue to review the comments received and analyze current business practices to determine whether specific regulation is necessary to ensure that these systems are not unfair, unjustly discriminatory, or deceptive."

–The Hagstrom Report

To learn more about GIPSA, read our January story.

Comments from ag organizations:

Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America:

“His (US Secretary of Agriculture Sonny Perdue’s) action effectively insulates multinational meatpackers, like the crime-ridden, Brazilian-owned JBS corporation, from any liability for engaging in unfair cattle-buying practices. Perdue is granting these multinational meatpackers a license to retaliate against individual producers and engage in such unfair practices as giving preferential contracts to their favorite, corporate-aligned feedlots while subjecting independent farmer feeders to a highly volatile, ultra-thin, and dysfunctional cash market.

“His action of withdrawing the rule that would have empowered individual cattle producers to maintain the competitiveness of the marketplace by redressing harms inflicted on individual farmers and ranchers shows how out of touch the Secretary is with the realities of the fed cattle market. In that market, just four dominant meatpackers control 85 percent of the marketplace. These monopolistic monoliths can and do exact financial harm on individual cattle farmers and ranchers with impunity. The Secretary has now codified their anticompetitive actions.” –R-CALF USA CEO Bill Bullard

National Cattlemen’s Beef Association

“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.”

–NCBA Senior Vice President, Government Affairs, Colin Woodall

U.S. Cattlemen’s Association

“USCA is disappointed in today’s 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.”

“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.”

–USCA President Kenny Graner

American Farm Bureau Federation

“We thank Secretary Perdue for his diligent efforts on these rules. The livestock Scope rule would have disrupted key marketing arrangements in our livestock sectors.

“As to the Unfair and Undue Preferences rule, we encourage the agency to continue to work toward solutions that protect our farmers and ranchers from unjust practices and strengthen GIPSA’s ability to enforce these issues. In particular, we urge the department to continue working to achieve more fairness for growers. The USDA can and should stop predatory practices that continue in the chicken industry.”

–American Farm Bureau Federation president Zippy Duvall

South Dakota Farmers Union

“SDFU is deeply disappointed in today’s decision by the USDA and realizes the negative impact it will have on rural Americans. Withdrawing the rule shows little respect for family farmers and ranchers and a big win for multinational packers. This President and Administration has yet again let down the rural Americans who gave their support to get him into office to begin with. Leaving them to wonder when rural Americans will see a return on support from their own president.”

–S.D. Farmers Union President Doug Sombke