WASHINGTON, April 11, 2017 – The Department of Agriculture will delay implementation of a controversial rule in the meat and livestock sector and give the new administration more time to think it over.
According to a USDA release, the Grain Inspection, Packers and Stockyards Administration will delay implementation of the Farm Farmer Practices Rule – known in shorthand as the GIPSA rule for the agency charged with its governance – for 180 days. That would bump the effective date – originally April 22 – back to Oct. 19.
“The extension allows ample time for stakeholders to review the effects of the Scope Interim Final Rule on their operations, and ensures maximum opportunity for dialogue across every segment of the livestock, meat, and poultry industries,” Randall Jones, GIPSA’s acting administrator, said in a statement.
The change will be posted in the Federal Register on Wednesday after a stakeholder announcement from GIPSA Tuesday morning. In addition to delaying the effective date, GIPSA will also ask “the public to comment on four possible actions USDA should take in regards to the disposition of the Interim Final Rule.”
The rule – originally finalized by the Obama administration in December – was intended to level the playing field between contract growers and the companies with which they work. The December rollout was cheered by cheered by some but vigorously opposed by many of the nation’s meat and livestock groups.
While the rule is meant to address concerns of vertical integration in the sector, some producer groups say its regulations will only exacerbate the issue when companies opt to control the production on their own rather than contracting it out to a producer.
In a statement, National Chicken Council President Mike Brown welcomed the news, saying the Trump administration has clearly “recognized this is a complicated and controversial issue with deep economic consequences for American poultry and livestock producers."
Ken Maschhoff, president of the National Pork Producers Council, said the provision in the rule “eliminating the need to prove injury to competition” would result in an “explosion” of lawsuits pursuant to the Packers and Stockyards Act, an ultimately costly and unintended consequence of the GIPSA rules.
“That would reduce competition, stifle innovation and provide no benefits to anyone other than trial lawyers and activist groups that will use the rule to attack the livestock industry,” he said. “For those reasons, we’re asking the administration to withdraw the rule.”
While livestock groups primarily stand opposed, the rule has support from a number of ag organizations. In December, American Farm Bureau Federation President Zippy Duvall said the regulations “take an important step toward leveling the playing field in the poultry industry by ensuring companies follow the law and treat farmers fairly, without disrupting beef and pork markets.”
Also at the time of USDA’s initial rollout, Allan Sents with the U.S. Cattlemen’s Association said the rule was “an important step to advance competition and true price discovery in the cattle market.” Paul Wolfe with the National Sustainable Agriculture Coalition said the established competitive injury threshold in the rule was too high.
“The idea that contract farmers should have to prove injury to the whole sector in order to receive compensation for having been the victim of an anti-competitive practice is an impossible standard,” Wolfe said at the time.
Mike Weaver, president of the Organization for Competitive Markets, said Tuesday that USDA should “stop playing games at the expense of the American family farmer” and implement the rule.
“It’s obvious USDA has a deaf ear to America’s family farmers,” Weaver said, noting that the GIPSA rule has taken public comment three times.
The rule has also been unpopular on certain corners of Capitol Hill. Senate Ag Committee Chair Pat Roberts, R-Kan., said in a release that he hopes the next secretary of agriculture – presumably former Georgia Governor Sonny Perdue – will “fully analyze the effects of the rule and consider the recently submitted public comments.”
“The Obama administration made the imprudent decision to finalize this rule on their way out the door,” Roberts continued. “I hope the Trump administration’s USDA will finally heed the concerns of farmers and ranchers and the Congress to get rid of this unneeded and unwanted rule.”
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