USDA Puts Forward Modified GIPSA Rule


by Jerry Hagstrom, DTN Political Correspondent

CANNES, France (DTN) — Consumer and agricultural groups are starting to react to the Agriculture Department’s modified version of its proposed changes to the Grain Inspection, Packers and Stockyards rule.

USDA sent the version Thursday to the Office of Management and Budget for review, but by Friday there was conflicting reactions to USDA’s approach by Food and Water Watch, a consumer group, and the National Farmers Union.

The provisions will be published in the Federal Register in the coming weeks, a USDA source said Friday in an email. DTN learned the following about the revised rule:

– Decisions about what to include in these rules and how to modify the contents have been guided by the comments received and the updated cost benefit analysis.

– The final rule contains provisions required by the 2008 farm bill (the sections related to suspension of delivery of birds, additional capital investment criteria, breach of contract and arbitration) in addition to a section on swine and poultry sample contracts.

– There will also be a separate interim rule, which contains a modified version of the section on poultry tournament systems and would be open to additional public comment.

– USDA estimates show that these two rules combined have a cost of less than $100 million.

– There are several provisions from the original proposal that USDA is no longer pursuing, including the section on packer-to-packer sales and packer buyers and the records retention section.

– The remaining provisions from the June 22, 2010, proposed rule remain under consideration.

The National Cattlemen’s Beef Association, the American Meat Institute, the National Pork Producers Council and the National Chicken Council have been critical of the initial proposed rule, while the National Farmers Union, R-CALF USA and Food and Water Watch were generally supportive.

But Food and Water Watch said in a news release Friday that, “While the final rule could make several important improvements for contract poultry and hog producers, USDA has abandoned the portions of the proposed rules that would help independent cattle and hog producers. By submitting this deficient final rule, the Obama administration has broken the 2008 campaign pledge to ‘issue regulations for what constitutes undue price discrimination.’”

The news release continued, “The 2008 farm bill directed USDA to provide protections to poultry growers from some commonplace contract practices used by poultry companies to manipulate prices paid to growers and to prevent them from having access to the courts to settle contractual disputes.

“The farm bill also directed USDA to finally determine which meatpacker practices are unfair to hog farmers and cattle ranchers under a nearly century-old law — the Packers and Stockyards Act — that has been largely unenforced,” Food and Water Watch said. “Most of the poultry provisions are included in the rule that went to the White House yesterday, but none of the livestock provisions survived to the final rule.”

The consumer group added, “The exact details of the final rule are not available, but it is clear that the administration has caved to meat industry pressure to abandon independent hog and cattle producers to unfair treatment at the hands of the large meatpackers. Cattle and hog producers should not have to wait another year or two for USDA to consider what is fair and unfair pricing; they have already waited more than 90 years since the Packers and Stockyards Act directed the agency to prevent unfair meatpacker abuses in 1921. USDA should immediately finish the livestock provisions and make them final.”

The National Farmers Union had a different perspective.

“The portions of the original rule that have been included in the final rule will provide poultry and pork producers with a degree of protection from abuse by integrators and processors,” said Farmers Union President Roger Johnson.

But he added that “USDA did not yet forward to OMB the most critical parts of the rule, which include a clearer definition of USDA’s interpretation of competitive injury. The competitive injury definitions address the fundamental problems that have plagued the livestock and poultry industries.”

Johnson continued, “NFU is encouraged to see parts of the GIPSA rule advanced, but much more work has yet to be done. The most critical aspects of the GIPSA rule must be finalized in order to prevent further damage to rural America.”

The South Dakota Stockgrowers also sent a press release late Friday.

“To our great disappointment, the provisions to stop packer to packer sales, stop buyers from buying for more than one packer, and the recordkeeping requirements that we worked for have not been included in the rule at this time. The rule does contain some of the provisions regarding litigation and provides protections for poultry and hog operators,” the stockgrowers said. The organization added it will send out a formal statement on Monday.


© Copyright 2011 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.

Posted with DTN Permission by Haylie Shipp


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