Friday, November 11, 2011

Revisions in livestock-marketing rule please meatpackers, upset National Farmers Union

The U.S. Agriculture Department's submission of a scaled-back GIPSA (Grain Inspection, Packers and Stockyards Administration) proposal on livestock and poultry marketing reforms seems to make no one happy, Agri-Pulse reports: USDA "opted to pursue final regulatory clearance on portions of its original proposed rule that address only poultry provisions and some swine provisions."

In other words, the Obama administration is "leaving out major provisions strongly opposed by meatpackers but retaining new rules on poultry production and marketing," Meating Place reports. "Apparently gone is the ban on packer-to-packer sale of livestock, restrictions on price premiums based on standards for product quality, and limits on contract terms based on the number of animals sold. The biggest turnabout for the agency, however, may be the fact that it is apparently giving up its attempt to define 'competitive injury,' an important legal concept, as 'conduct (that) distorts competition in the market channel or marketplace.' This definition was included in the section that is apparently omitted from the final rule."

"USDA effectively did as a bi-partisan group of lawmakers demanded more than a year ago by removing controversial language. Supporters of the rule aren't happy and because of that were more prone to issue denunciations," Chris Clayton of DTN writes. "Livestock groups that wanted to kill the rule remain wary."

The revisions were sent to the White House Office of Management and Budget for final review. Those revisions "deal with poultry companies giving reasonable notice to growers prior to suspension of delivery those birds, poultry and swine production contracts that require facility upgrades, termination of production contracts and the use of arbitration to resolve contract disputes," Agri-Pulse reports.

Action was deferred on proposals that would define conduct by chicken integrators and meat processors that gives an unfair advantage. Agri-Pulse reports that Colin Woodall, vice president of government affairs for the National Cattlemen’s Beef Association, and an outspoken opponent of the GIPSA reforms as initially proposed, said in an interview "that provision – along with an easier burden of proof for competitive injury – are the ones that are going to make significant changes in the way marketing contracts are handled because of the litigation that could come from those.”

USDA notified industry stakeholders and farm-state lawmakers that it would be abandoning sections of the GIPSA rule concerning packer-to-packer sales and packer buyers and records retention. National Farmers Union President Roger Johnson said the rules will provide poultry and pork producers with protection, but he urged USDA to push for the most critical parts of the rule, which include "clearer definition of USDA's interpretation of competitive injury." (Read more)

The exact details of the final rule are currently unknown, but the executive director of Food & Water Watch, Wenonah Haulter, told Agri-Pulse: "It is clear that the administration has caved to meat-industry pressure to abandon independent hog and cattle producers to unfair treatment at the hands of the large meatpackers." (Agri-Pulse is subscription-only, but free trials are offered on its website.)

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