New Rules From USDA Aim to Protect Livestock Producers

Kelsey Gee reported yesterday at The Wall Street Journal Online that, “The U.S. Department of Agriculture set new rules to protect farmers from anticompetitive business practices, ending a six-year battle between livestock and poultry producers and meatpacking companies that buy their products.

“Under one rule issued Wednesday, farmers can ask the USDA to intervene when they believe meatpackers have underpaid or treated them unfairly. Previously, farmers had to prove a meatpacker’s tactics hurt the entire market. Two more rules the USDA proposed would protect farmers from retaliation for speaking out against deceptive terms or inadequate pay and would define such unfair practices more clearly.

“Farm groups have tussled over the regulations since Congress proposed them as part of the 2008 Farm Bill, in part because they pit farmers against big meat companies. The USDA first proposed a similar set of rules in 2010, but progress was stymied after lawmakers blocked funding.”

Ms. Gee explained that, “The rules affect nearly one million chicken, cattle and hog producers in the U.S. as well as food giants like Tyson Foods Inc., Sanderson Farms Inc. and JBS SA that buy their livestock. Many farmers have direct contracts with a processor that could now be deemed discriminatory, some industry groups fear.”

The Journal article added that, “The rules are subject to a 60-day comment period, by which time a new agriculture secretary could be in place under President-elect Donald Trump.

“The National Pork Producers Council said it would ‘work with the Trump administration and the new Congress’ to repeal the rules.

“Many farmers said they hope the Trump administration will stand with smaller farmers and keep the new rules.”

Also yesterday, the House Agriculture Committee issued a news release on this development, which noted that, “Today, the U.S. Department of Agriculture (USDA) announced the release of three controversial Grain Inspection, Packers and Stockyards Administration (GIPSA) rules—one interim final rule and two proposed rules that will be open for a 60-day public comment period.

“The release follows a November 15th letter from Leader McCarthy and House Committee Chairmen cautioning the current Administration ‘against finalizing pending rules or regulations in the Administration’s last days’ and warning of Congress’ intent to scrutinize and overturn such actions if necessary.

“USDA’s actions also run counter to Chairman K. Michael Conaway’s (R-TX) suggestion to Secretary Vilsack in an October 20th letter that all three rules be withdrawn.”

In the release, Chairman Conaway indicated that, “I’m disappointed that the generally productive and non-partisan relationship I’ve developed with USDA over the past two years has culminated in a last minute effort to push through a partisan trio of rules—even despite assurances that they would be tabled for more thorough and appropriate consideration by the incoming Administration. It is particularly troubling given Congressional disapproval with the overreach of these costly rules dating back to their original proposal in 2010.”

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