Livestock and meat groups line up to urge the USDA to ditch so-called Farmer Fair Practices Rules – an interim final rule and a proposed regulation – that would “enable a torrent of lawsuits against members of the pork industry.”
Citing grave concerns that they would “cause serious harm to the pork industry,” the National Pork Producers Council in comments submitted today says the USDA should not finalize – or at least exempt pork producers from – regulations related to the buying and selling of livestock.
According to NPPC, the so-called Farmer Fair Practices Rules – an interim final rule and a proposed regulation – would “enable a torrent of lawsuits against members of the pork industry,” replace carefully negotiated contracts with standard terms that are unworkable, ignore crucial differences among the various sectors of the meat industry and raise serious constitutional concerns under the First Amendment.” The regulations were issued in the last weeks of the Obama administration by USDA’s Grain Inspection, Packers and Stockyards Administration.
“GIPSA’s one-size-fits-all approach would restrict livestock transactions, lead to consolidation of the livestock industry – putting farmers out of business – and increase consumer prices for meat,” says NPPC President Ken Maschhoff, a pork producer from Carlyle, Ill. “These regulations could impose staggering costs on the pork industry. The only people who would benefit from this heavy-handed government intrusion in the hog market are trial lawyers.”
NPPC is most concerned with the interim final rule, set to take effect next month, which would broaden the scope of the Packers and Stockyards Act on the use of “unfair, unjustly discriminatory or deceptive practices” and “undue or unreasonable preferences or advantages.” Specifically, the regulation would deem such actions per se violations of federal law even if they didn’t harm competition or cause competitive injury, prerequisites for winning PSA cases.
Pork producers aren’t the only ones making their GIPSA dissatisfaction known.
Craig Uden, president of the National Cattlemen’s Beef Association, says the rules stand to threaten market incentives, the quality of American beef the industry is known for, and will ultimately cost $954 million to the cattle industry.
“These rules are just as troubling as they were when USDA initially proposed them in 2010, after which Congress immediately stepped in to defund the rules, recognizing them as a flawed concept that limits producers’ ability to market their cattle and adding layers of crippling bureaucracy,” Uden says.
Two proposed rules and one interim final rule came out on Dec. 20, 2016, one month before the end of the Obama administration. The interim final rule regarding the scope of the Packers and Stockyards Act and the proposed rule regarding undue preference and unjust treatment have a direct negative impact on the cattle industry.
Alternative Marketing Arrangements reward cattle producers for producing the quality beef consumers demand. Under the interim final rule, USDA or a producer no longer needs to prove true economic harm but rather one only needs to say that he or she was treated “unfairly” to sue a packer or processor.
“This approach is counter to the decisions of seven federal courts of appeals and it is this change that ultimately makes the interim final rule a trial attorney’s dream and jeopardizes the Alternative Marketing Arrangements cattle producers utilize,” Uden says. “What incentive would a packer have to pay for superior cattle when they may be sued for rewarding quality? The industry will be forced back to treating all beef as commodity beef under a one-size-fits-all approach.”
The National Turkey Federation cited concerns: