In one of its biggest decisions since President Trump took office, the USDA killed an Obama-era proposal that would make it easier for livestock producers to prove unfair treatment at the hands of meat processors. “They’re just pandering to the big corporations,” said small-farm defender Sen. Chuck Grassley of Iowa, nearly shouting in his “violent opposition to what they are doing.”
There was no suggestion that the regulation, issued a month before President Obama took office, would be revived, either through a change of heart by Agriculture Secretary Sonny Perdue or through congressional action. Perdue told reporters that the USDA is committed to competitive markets. “We’ll be watching,” he said, for any unfair practices.
The chairs of the Senate and House Agriculture committees celebrated the demise of the so-called GIPSA rule, which takes its name from the agency that proposed it, the Grain Inspection, Packers and Stockyards Administration. The rule grew out of language in the 2008 farm law and was challenged for years by the largest cattle- and hog-producer groups. Those groups cheered the USDA decision. “A victory,” proclaimed the National Cattlemen’s Beef Association, saying Perdue “deserves a great deal of thanks and credit for this smart decision.”
Still pending at the USDA was a proposed rule that would set animal welfare standards for livestock on organic farms. The USDA had issued a six-month delay of the rule, until Nov. 14, and invited public comment on whether it should kill the rule, rewrite it, or let it take effect. The USDA also must decide at some point whether to proceed with a proposed organic checkoff program.
With the withdrawal of the GIPSA rule, livestock producers must show proof of harm to the entire market in order to win a complaint of anticompetitive practices. The proposed rule would have changed the standard to showing that unfair treatment was directed at a producer by a processor. Advocates of the proposed standard said it would level the playing field with processors, especially for poultry producers, who often raise broiler chickens in a “tournament” system that rates their performance. Some producers say they can lose a contract if they complain about the system’s terms.
The large livestock groups said the GIPSA rule would have invited lawsuits against premiums that are offered to producers who meet specific goals, such as animals with high-quality meat or animals raised using specific processes. Illinois farmer Ken Maschhoff, president of the National Pork Producers Council, said the GIPSA rule would turn “every contract dispute into a federal case subject to triple damages.”
The National Chicken Council said courts repeatedly have rejected the standard proposed by GIPSA for determining anticompetitive behavior.
To the National Farmers Union, the USDA decision was “a green light to the few multinational meatpackers that dominate the market to discriminate against family farmers.” The NFU, the second-largest U.S. farm group, said it would pursue action in Congress to address competition in agriculture. The National Sustainable Agriculture Coalition also said that the loss of the GIPSA rule would mean more power for processors. “Anyone familiar with this issue can see that the [Agriculture] Department has taken its talking points directly from the packers and aggregators.”
To see the Federal Register notices on the GIPSA rule, click here.