WASHINGTON D.C. — Calls are coming from both sides over a controversial USDA regulatory proposal said to be aimed at leveling the playing field among producers and processors of poultry and livestock.

 

The issue was contentious enough for USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) in February to delay the effective date of the proposed rules for 60 days to gather further public comment. The expanded public comment period on what’s termed the Farmer Fair Practices Rules expired March 24.

 

The comments are being reviewed before a decision is made on whether to withdraw or impose the rules first proposed in 2010.

 

Kraig Roesch, acting deputy administrator for GIPSA, said when a decision will come down was not known, but it should happen after the new USDA secretary is officially in place.

 

“That’s just where we’re at in the process,” said Roesch.

 

Among the supporters is the last USDA secretary, Tom Vilsack, who said the rules were part of former President Obama’s initiative to create a level playing field for consumers and workers in areas such as pay equality and improving workplace health and safety.

 

“These new regulations aim to restore fairness to the way poultry farmers are paid for their work and create commonsense protections and reasonable reforms that balance the burden on poultry and livestock farmers seeking justice under the Packers and Stockyards Act,” said Vilsack.

 

The National Pork Producers Council (NPPC) and the National Cattleman’s Beef Assoc. (NCBA) were among those calling for USDA to withdraw the rules. Opponents claim the rules will threaten market incentives, quality of meat and poultry and increase the number of lawsuits. For the cattle industry alone, the rules would mean $954 million in extra costs, said Craig Uden, NCBA president.

 

“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,” he added.

 

Most concerning to NPPC is what it alleges to be a broadening the scope of GIPSA by making illegal actions that don’t harm or injure market competition. Ken Maschhoff, NPPC president, said the rules will restrict livestock transactions and lead to consolidation of the livestock industry, “putting farmers out of business and increase consumer prices for meat.

 

“The only people who would benefit from this heavy-handed government intrusion in the hog market are trial lawyers,” said Maschhoff, a pork producer from Carlyle, Ill.

 

Under the interim final rule, USDA or a producer no longer needs to prove true economic harm, but rather, one only needs to say they were treated “unfairly” to sue a packer or processor, said Uden. He called the rules “a trial attorney’s dream” that jeopardizes the Alternative Marketing Arrangements cattle producers use.

 

“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,” Uden said. “It seems only fair that the people who feed us receive fair treatment and the opportunity to earn a living in return for what they take on to feed our country.”

 

Vilsack said the rules bring fairness in cases in which processors controlling more than half of a market have power over growers and can suppress how much they pay for product or pit producers against each other.

 

“For example, if a chicken grower attempts to organize other chicken growers to bargain for better pay or publicly expresses unhappiness with the way they are treated by a processor, the grower can suffer retaliation,” he said.

 

Among those standing firm in support of the rules is the U.S. Cattlemen’s Assoc. (USCA), which claims protections are afforded to family farms and ranches from unjust and anti-competitive market behavior.

 

“The intent of this proposed rule and interim rules are sound and sorely needed. The proposed and interim rules would simply seek to maintain competition in the marketplace and prevent improper actions by the parties with bargaining power weighing heavily in their favor,” said Allan Sents, USCA Marketing Committee chair.

 

The Center for Rural Affairs urged that the rules be implemented as well. “For too long, the lack of clarity on what constitutes as unfair practices or undue burdens has unfairly limited poultry and livestock producers’ ability to conduct business with packers on fair and equal terms.

 

These rules represent an opportunity to level the playing field for hard-working poultry and livestock producers,” said Anna Johnson, policy program associate. She said the rules should have a positive impact on smaller-scale hog producers who in some instances gave up their hogs when the industry began favoring and prioritizing large-scale contract hog production.