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Agricultural News

Greatly Stripped Down GIPSA Rule Heading to OMB

Fri, 04 Nov 2011 06:58:18 CDT

Greatly Stripped Down GIPSA Rule Heading to OMB It appears that the opponents of the so called GIPSA rule that would have impacted the marketing of livestock in the United States have prevailed in their quest to minimize the impact of the proposal on the cattle and hog producers in the US.

No official word has come from USDA as of yet- but we have been getting indications that officials are ready to move a modified version of the GIPSA rule to the next step- which may be sending it as early as today on to the Office of Management and Budget for their blessing.

There has been a lot of speculation that the USDA would strip out the most controversial parts of the proposed rule- and that would result in little impact on the cattle and hog producers of this country- while poultry operations would be subject to more change coming from the amended marketing rule, which was originally proposed back in June 2010. That apparently is the case.

Industry reports now tell us that the rule has been split up into three parts and only two parts are being sent to the OMB for their review.

Part 1 will be a Final Rule that contains only some of the provisions expressly required under the 2008 Farm Bill. Those provisions appear to include primarily poultry-related provisions such as provisions that address the suspension of delivery of birds, additional capital investment criteria, breach of contract and arbitration as well as a section on sample contracts for swine and poultry.

Part 2 will be an Interim Rule, which will contain a modified version of the section in the proposed rule that addressed tournament pricing systems in the poultry industry. The Interim Rule will also have a new public comment period before it becomes final.

USDA is indicating that it is abandoning provisions in its proposed rule that would have prohibited packer-to-packer sales, prohibited a packer buyer from buying for more than one packer, and the requirements that packers must retain records.

USDA is indicating that all the other provisions in the proposed rule will remain at USDA for further consideration, meaning USDA will not send the sections on prohibiting undue preferences or advantage, or the section that clarifies that producers do not have to prove harm to the entire industry if they are harmed by a packer's unfair buying practices.

At this point, it does not look like any of our other key cattle issues have gone through USDA's clearance process, so they likely will not be submitted to OMB for a while. It appears that USDA is not backing off of these proposals forever- but for now- they appear to be going NOWHERE.

As of early Friday morning- no livestock groups have issued statements about these developments on GIPSA- but those statements are expected to roll in later on Friday.

The GIPSA Rule was proposed in June 2010 by USDA- we prepared an extensive "primer" on the GIPSA proposal last fall offering links to the actual rule, arguments for and against it- and more. Click here for that overview of the GIPSA from the fall of 2010.



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