Competing groups clash over USDA extending GIPSA comment period

By Agri-Pulse Staff

© Copyright Agri-Pulse Communications, Inc.

Washington, July 26 – USDA has responded to calls from Congress, the National Cattlemen’s Beef Association (NCBA) and other leading agriculture organizations to extend the comment period to allow for possible changes to the Grain Inspection, Packers and Stockyards Administration’s (GIPSA) proposed rule on livestock marketing. But other groups including the National Farmers Union and R-CALF USA strongly support the new rule and charge that by granting an extension, USDA is favoring meatpacker interests over producers. The proposed rule, announced June 18, suggests major changes to the way producers can market their cattle. The comment period will be extended for an additional 90 days, to November 22.

“Members of Congress from both sides of the aisle were very clear about the critical need to extend the comment period to allow stakeholders to thoroughly analyze the potential impacts of the rule,” said NCBA Vice President of Government Affairs Colin Woodall. “While it’s unfortunate USDA didn’t extend the comment period for a full 120 days as we requested, we’re pleased that stakeholders will have some additional time to further analyze this complex rule and its potential implications on the beef sector, which is the largest segment of the food and fiber industry.”

Woodall explained that “On the surface, this rule has the potential to take the beef industry back 30 years by stifling the innovative efforts of U.S. cattle producers to add value and enhance the quality and safety of their products for consumers in the United States and abroad.”

Steve Foglesong, president of NCBA and an Illinois cattle producer, sent a letter to GIPSA Administrator J. Dudley Butler earlier this month to stress the need for additional time to thoroughly analyze the rule’s potential legal and economic impacts on U.S. cattle producers. In the letter, Foglesong referred to language used by USDA Secretary Tom Vilsack regarding the proposed rule.

“The Secretary of Agriculture referred to this as one of the most sweeping reforms of the Packers and Stockyards Act,” stated Foglesong. “As such, it’s extremely important that we thoroughly understand the rule and both its intended, and unintended, consequences on the U.S. cattle community.”

During a July 20 House Agriculture subcommittee hearing on livestock, Democrats and Republicans expressed to USDA that the scope of the proposed rule goes well beyond what Congress intended under the 2008 Farm Bill. NCBA also reiterated that fact in writing to USDA.

The National Farmers Union (NFU), however, is sharply critical of the 90-day extension for comment on GIPSA's proposed rule, “Implementation of Regulations Required Under Title XI,” of the 2008 Farm Bill.

NFU charges that the proposed rule addresses concerns that have been discussed for many years and were developed at the direction of the 2008 Farm Bill which required USDA to carry out specific rulemaking to improve fairness in the marketing of livestock and poultry.

“Extension of this comment period gives leverage for packers to offer lower prices to producers as a fear mechanism, which we have seen in the past with rules such as Country of Origin Labeling,” said NFU President Roger Johnson. “NFU is an organization of producers and opposes the further extension of this comment period.”

The 2008 Farm Bill stated this rule was to be fully completed by June 18, 2010, another reason NFU is displeased with further extension of the comment period. NFU states that a 30-day extension would have allowed for plenty of time and included the allowance for comments at the USDA/Department of Justice workshop on the livestock industry in Fort Collins, Colo., to be held Aug. 27.

“This rule is for the protection of the producers and USDA has allowed for a sufficient amount of time to comment,” said Johnson. “Further extending the deadline is proof that USDA is buckling under the pressure of industry. The focus needs to be on the producers. While USDA is taking a step in the right direction with this rule, the process needs to be expedited instead of slowed down.”

Echoing NFU's concerns, a coalition of 66 farm, consumer, rural and rural development organizations from across the U.S. sent a letter to Congress in support of the new GIPSA rule to clarify how the agency intends to administer and enforce the nearly 90-year-old Packers and Stockyards Act of 1921 (PSA). The joint letter states that the PSA “makes it unlawful for packers, swine contractors, and live poultry dealers to engage in any ‘unfair, unjustly discriminatory, or deceptive practice or device,’ or to “make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect.”

In support of GIPSA’s rulemaking process, the group states their belief that “To delay the comment period is a little more than an effort to delay and ultimately derail the proposed rule itself…and the proposed rule is an appropriate first step to ensure that competition, not regulation or packer control, is the dominant force that directs the future of the U.S. livestock industries.”

R-CALF USA CEO Bill Bullard stated that “Unfortunately, GIPSA has never issued the regulations necessary to define these broad prohibitions in order to adequately enforce the protections for livestock and poultry producers, and as a result, the agency has been widely criticized by the Government Accountability Office, USDA’s own Inspector General, and outside stakeholder groups for its lack of enforcement of the PSA. The authors of the 2008 Farm Bill recognized that the PSA has not been properly administered or enforced and instructed GIPSA to use its existing authority to write regulations to define, among other things, the criteria for determining whether the unlawful practice of granting undue preference or advantage has occurred.”

According to the coalion, GIPSA has existing authority under Section 407 of the PSA to define criteria for determining when certain practices in the livestock and poultry sector will be viewed by GIPSA as a violation of the other prohibitions contained in the PSA.

“Very little attention has been paid to the ongoing concentration in the livestock industry and supply chain integration,” the letter states. “Now we find that competition in the livestock and poultry industry has all but disappeared, and as a result, unfair trade practices and manipulative marketing schemes have been institutionalized and now viewed by many as normal and natural.”

The group also urged Congress to identify from which segments of the multi-segmented livestock and poultry industries the opposition is coming from, meaning that it should be expected that the interests of livestock and poultry buyers (meatpackers) and livestock and poultry sellers (producers) would be in conflict over the Proposed Rule.

“The undersigned organizations either represent directly the interests of actual livestock and poultry producers, and/or are deeply concerned for the well-being of the producer segment of the U.S. livestock and poultry industries, which includes the well-being of the rural communities they support,” the letter states.

The letter concludes by urging Congress as a whole to protect “a just, transparent, and robustly competitive marketplace for livestock and poultry producers, as well as the rural communities those producers support,” and states that “we believe the GIPSA rulemaking process is critical to the achievement of that goal.”