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Reaction to USDA's GIPSA proposal

Reaction to USDA's GIPSA proposal

NFU, OCM encourage Trump administration to adopt greater protections for family farmers, ranchers.

On Jan. 10, USDA published a new proposed rule specifying four criteria USDA's Agricultural Marketing Service would consider when determining whether "an undue or unreasonable preference or advantage has occurred in violation of the Packers and Stockyards Act."

The latest proposal omits an effort that would have made it easier for livestock farmers to win lawsuits against meat processors, Politico reports. Farmers have said there is an impossibly high bar to prove in court that the companies treated them unfairly or discriminated against them.

The dispute is part of a decade-long controversy over GIPSA rules. The 2008 farm bill directed USDA's Grain Inspection, Packers and Stockyards Administration to strengthen legal protections for contract farmers. But since then, several attempts to finalize new rules were either blocked by Congress or withdrawn by Agriculture Secretary Sonny Perdue, according to Politico.

"While Congress and the USDA have spun their wheels for more than a decade, farmers have continued to endure anticompetitive practices with few defenses," said National Farmers Union President Roger Johnson.

NFU encouraged the Trump administration to adopt greater protections for family farmers and ranchers.

"With almost no oversight, just a handful of corporations have taken control of the poultry and livestock markets," Johnson said. "This has made for an extremely lopsided relationship between meatpackers and processors and those who sell to them, where the former sets almost all of the terms and the latter has no choice but to accept them. This has left farmers susceptible to substantial discrimination and abuse."

The Organization for Competitive Markets says the newly proposed rule doesn't address the undue or unreasonable preference conduct of packers and fails to highlight which packer actions are unfair, unjustly discriminatory or deceptive, WNAX reports.

Julie Anna Potts, North American Meat Institute president and CEO, told the Arkansas Democrat-Gazette that the rule must protect marketing agreements that provide stability to the industry. If longtime requirements soften, Potts said, "frivolous lawsuits could flood the courts and hurt the producer-processor relationship, ultimately harming those the law is intended to protect."

USDA has opened a 60-day comment period on the proposed rule. The deadline to submit comments is March 13, 2020.

For more information, contact S. Brett Offutt, Chief Legal Officer/Policy Advisor; Packers and Stockyards Division, USDA AMS Fair Trade Practices Program; phone: 202-690-4355; or email: S.Brett.Offutt@ams.usda.gov.

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