Sunday, December 10, 2023

USDA withdraws GIPSA rule on competitive injury, unfair practices

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By Barbara Olejnik

Poultry Times staff

GAINESVILE, Ga. — USDA has withdrawn two rule that would have been implemented by the department’s Grain Inspection, Packers and Stockyards Administration (GIPSA) — a move welcomed by several poultry industry groups.

The two rules included an interim final rule on competitive injury, and a proposed rule on unfair practices and undue preferences.

The interim final rule, the Farmer Fair Practices rule, would have established that it is not necessary to demonstrate that an unfair practice harms the entire market in order to prove a violation of the Packers and Stockyards Act.

The proposed rule regarding unfair practices would have clarified what GIPSA views as practices that violate the Act and would have established criteria to protect legal rights of farmers.

The interim rule was scheduled to go into effect Oct. 19. USDA’s notice withdrawing the two rules was issued following review of industry and public comments on the rules.

A third proposal would have established criteria that GIPSA would consider in determining whether a live poultry dealer has engaged in a pattern or practice to use a poultry grower ranking system unfairly.

National Chicken Council President Mike Brown said, “I want to thank Secretary Perdue for USDA’s thorough and meaningful review of these controversial rules that would have opened the floodgates to frivolous and costly litigation. It is clear the administration took into account the thousands of comments it received and recognized these rules would have come with deep economic consequences for American poultry and livestock producers.

Brown added, “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. 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.”

Commenting on the withdrawal of the rules, Secretary of Agriculture Sonny Perdue stated, “Obviously I want to assure you the USDA and GIPSA remain committed to fair trade practices, financial integrity and competitive markets.”

“My goal at this point is to make sure that in the industry — both those on the production side and those on the buying/processing side — that we abide by the USDA motto, and that’s ‘Do right and feed everyone,'” Perdue added.

Also commenting on USDA’s withdrawal of the interim final rule was the North American Meat Institute.

NAMI President and CEO Barry Carpenter said, “We appreciate Secretary Perdue and the agency carefully considering the many comments submitted, including strong opposition from many livestock and poultry producers who recognized the interim final rule would have greatly harmed the entire industry.

“The secretary and his staff recognized the considerable harm the rule would have done to those farmers and ranchers, as well as consumers, retailers and meat packers and processors,” Carpenter added.

The American Farm Bureau Federation also supported withdrawal of the rules

AFBF President Zippy Duvall said withdrawal of the livestock portion of the GIPSA rule “is good news for farmers and ranchers.” The Livestock Scope rule “would have disrupted key market arrangements in our livestock sectors.”

AFBF also urged USDA to continue work “to achieve more fairness for growers” and to “stop predatory practices that continue in the chicken industry.”

Secretary Perdue’s home state of Georgia, the nation’s top poultry producer, includes more than 5,000 chicken growers.

Georgia Senator David Perdue (R), the secretary’s cousin, said USDA’s action was “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.”

The interim final rule (IFR) was originally published in October 2016, near the end of the Obama administration, and was set to take effect in February 2017, before it was delayed by the new administration.

In announcing withdrawal of the IFR, USDA’s notice stated that “The proposed rule, however, would inevitably general litigation in the livestock and poultry industries. Protracted litigation to both interpret this regulation and defend it serves neither the interests of the livestock and poultry industries nor GIPSA.”

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