Mixed reaction to USDA action on GIPSA rule

The Hagstrom Report
Mike Brown
The Hagstrom Report |

There has been continued mixed reaction to the Agriculture Department’s decision to withdraw the interim final Farmer Fair Practices rule — also known as the competitive injury rule and Grain Inspection, Packers and Stockyard Administration (GIPSA) rule — and announced no final rule will be issued.

National Chicken Council President Mike Brown said he was pleased USDA withdrew the Farmer Fair Practices rule.

“We are also pleased that USDA decided not to issue a final rule on the performance based poultry grower ranking system, a system where more efficient farmers are paid premiums based on their performance,” Brown said.

“Rather, the department will continue to study this and we look forward to continuing to work with USDA to help explain the merits of a system that has benefited farmers, chicken processors and consumers for seven decades,” Brown said.

“This is a victory for America’s cattle and beef producers — and it’s a victory for America’s consumers,” said Colin Woodall, the senior vice president for government affairs at the National Cattlemen’s Beef Association.

“Agriculture Secretary Sonny Perdue deserves a great deal of thanks and credit for this smart decision. The proposed rule would have crippled cattle producers’ ability to market their products through the value-added programs that help make American-produced beef the most delicious and nutritious in the world. This is a decision worthy of celebrating this evening with a top-quality steak.”

Sen. David Perdue, R-Ga., said, “President Trump’s rollback of these unnecessary rules is a win for Georgia’s agriculture industry. This action also sends a clear signal that President Trump and Secretary Perdue are serious about undoing Obama-era regulations that place an undue burden on rural America. I applaud the Trump administration for taking the concerns of rural America seriously by getting big government out of their way. The last thing that Georgia’s agriculture industry needs is more bureaucracy.”

But Sally Lee, program director at Rural Advancement Foundation International-USA, said, “We are outraged that the USDA is cancelling rules that would provide financial security and basic fairness for family farmers and their communities. Instead, they’ve chosen to side with Big Meat.”

“Farmers have made clear that they need protection from harmful and abusive practices that are standard in their industry,” Lee said.

“President Trump pledged that he would take a stand for them, but is instead taking another step in the opposite direction by cancelling the fair practice rule. I urge this administration to make good on his promise to protect rural communities, and immediately implement the interim final rule,” Lee said.

The National Sustainable Agriculture Coalition said, “This is truly a sad day for American farmers. Without the Farmer Fair Practices interim final rule on competitive injury, it will be virtually impossible for family farmers to defend themselves against unfair, deceptive, and discriminatory practices by packers and poultry dealers.”

“Farmers will lose even the most basic protections — protections that folks in any other profession would take as a given, like the ability to understand how their pay is calculated or the right to bring abusers to court without having to prove harm to an entire industry in the process,” the NSAC said.

“By withdrawing this rule, the administration is leaving GIPSA toothless and telling American family farmers to sit quietly while it ushers forward the further consolidation and degradation of their industries.

“Adding insult to injury, the merits on which the administration has based its withdrawal of the Interim final rule are flimsy at best —anyone familiar with this issue can see that the department has taken its talking points directly from the packers and aggregators,” NSAC said.

“The charges that this rule would lead to more consolidation, excessive litigation, and increased costs for producers are baseless. The decision to withdraw the rule is nothing more than a smokescreen to allow packers and integrators to further consolidate their power. The agribusinesses behind this decision are not interested in the fate of family farmers, in consumer choice, or in fairness. They are interested only in further increasing their own bottom lines, an interest this administration seems to share.”

National Farmers Union President Roger Johnson said, “It is deeply disappointing that USDA did not side with family farmers in the long-contested debate over rules for the Packers and Stockyards Act. The Farmer Fair Practices Rules offered a basic, yet important, first step to addressing the unfair practice that family farmers and ranchers face in the extremely consolidated meatpacking industries.

“The withdrawal of the competitive injury rule is unjustified, given the long-held, plain-language interpretation by the department that growers do not need to prove harm to the entire industry when seeking relief from poultry companies for unfair contract practices. It is particularly egregious given the abuses that poultry growers face in the vertically integrated marketplace.

“With this decision, USDA has given the green light to the few multinational meatpackers that dominate the market to discriminate against family farmers,” Johnson concluded. “As the administration has signaled its intent to side with the meat and poultry giants, NFU will pursue congressional action that addresses competition issues and protects family farmers and ranchers.”

Agriculture Secretary Sonny Perdue told reporters in a call from Spain that the rule was supposed to facilitate competition, but would have led to more litigation.

“I want to assure you USDA and GIPSA remain committed to fair practices and competitive markets,” Perdue said.