By MEGGIE I. FOSTER
Associate Editor

WASHINGTON, D.C. — Last week, the U.S. House of Representatives approved legislation to fund the USDA, yet it denied money for the controversial Grain Inspection, Packers and Stockyards Administration (GIPSA) rule on livestock and poultry marketing.

On Thursday, representatives voted 217-203 in favor of providing appropriations for the USDA, the Food and Drug Administration and related agencies for fiscal year 2012, which begins Oct. 1, 2011. However, lawmakers followed through on action to reject provisions that would provide new protections for livestock producers against unfair, fraudulent or retaliatory practices.

The controversial proposal, opposed by many ag groups, was prompted by the 2008 farm bill. Original language of the GIPSA rule was designed to ensure a level playing field for all producers by providing additional protections against unfair practices and addressing new market conditions not covered by existing rules.

Many farm organizations and legislators, however, believed the rule went well beyond the intent of Congress. In fact, just last month 147 House members pointed out in a letter to Agriculture Secretary Tom Vilsack that the proposed rule included provisions specifically rejected during debate on the farm bill, and failed to conduct an in-depth economic impact study of the proposal.
“At a time when cattlemen are wondering why the federal government seems determined to put them out of business, it is encouraging to see the U.S. House of Representatives push back on government overreach into the private marketplace,” said National Cattlemen’s Beef Assoc. (NCBA) President Bill Donald. “If this rule is implemented, family farmers and ranchers have the most to lose with consumers riding shotgun.

“This rule will kill jobs and consumer choice and will depopulate rural America. Jobs on the ranch will be lost and trial lawyers will be the only ones to reap rewards. The Senate needs to follow suit by stopping funding for this rule.”
Organizations such as the NCBA, National Pork Producers’ Council (NPPC), National Chicken Council (NCC), National Turkey Federation (NTF), National Meat Assoc. and American Meat Institute applauded the House vote last week, while R-CALF (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) voiced its disappointment in the action of Congress to pitch the GIPSA rule.

R-CALF USA CEO Bull Bullard believes the House decision sends a powerful message of corporate profits over the well-being of family farmers and ranchers, to the American people. In fact, Bullard suspects the meatpackers have enlisted the aid of key Congressional members to help them avoid laws that prohibit meatpackers from engaging in unfair trade practices against U.S. farmers and ranchers.

On the contrary, NPPC is “grateful that the House is requiring USDA to take a timeout on the GIPSA rule, which as proposed is bad for farmers and ranchers, bad for consumers and bad for rural America,” said NPPC President Doug Wolf.
“And contrary to the proclamations from some general farm groups, the vast majority of livestock and poultry producers strongly oppose this regulation, which would cost them millions of dollars and lead to thousands of lost jobs.”
According to a study conducted by Informa Economics last year, the GIPSA rule would result in job losses of nearly 23,000, with an annual drop in gross domestic product by as much as $1.56 billion and a yearly loss in tax revenues of $359 million.

The study also found the regulation would impose on the livestock and poultry industries “ongoing and indirect” costs – eventually borne by producers and consumers – of more than $1.64 billion, including nearly $880 million to the beef industry, more than $400 million to the pork industry and almost $362 million to poultry.

“The more than 1,000 family farmers who raise turkeys in this country rely on production and marketing contracts to make a living. If the final rule were implemented, it could result in a fundamental change in the way turkeys are raised in this country, a change that may not benefit farmers,” said NTF President Joel Brandenberger. “This rule is so flawed it can’t be fixed, and Congress is right to try and scrap it, insisting that GIPSA go back to the specific provisions agreed to in the 2008 farm bill.”

Overall, many ag organizations criticized the proposed USDA regulation, pointing out it would restrict marketing agreements between producers and processors, dictate the terms of production contracts, require additional paperwork, create legal uncertainty and limit producers’ ability to negotiate better prices for the animals they sell.

“We have consistently urged USDA to go back to the drawing board and produce a rule that responds to its instructions from Congress rather than trying to destroy the existing system as the proposed rule does,” said Mike Brown, president of the NCC. “Now we hope that the U.S. Senate will see the wisdom in the House action and follow suit.”

Steve Foglesong, past president of NCBA and a cattleman from Illinois, hopes this action sends a strong signal to the USDA that “they are treading on thin ice. They don’t have the backing of the House and hopefully, the Senate is likely to follow.”

Foglesong didn’t offer any speculation on which way the Senate may be leaning, toward or against the extension of the USDA budget and GIPSA provision. “You never want to predict how smoothly it will sail. I hate to predict where we’re going to land with this,” he said.

On working with Senate lawmakers, Wolf added, “We don’t expect it to be easy. We expect to work hard. There are fewer numbers, so that makes a big difference.”