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Agricultural News

Organization for Competitive Markets Expresses Mixed Emotions on USDA's Version of GIPSA Rule

Fri, 04 Nov 2011 16:24:32 CDT

Organization for Competitive Markets Expresses Mixed Emotions on USDA's Version of GIPSA Rule The Organization for Competitive Markets praised the USDA for its decision to finalize some provisions of the GIPSA rule protecting poultry and swine producers but expressed concern that other provisions have been delayed and disappointment that key provisions making livestock markets more transparent and competitive have been eliminated.

The USDA's decision to finalize only a portion of the proposed GIPSA rule was announced late on Thursday, November 3, 2011. The proposed GIPSA rule is also known as the Producer Protection rule and as proposed provided for more fair contracting provision in poultry; record keeping requirements, justification for paying some producers more than others, a ban on packer-to-packer sales, and definitions of some terminology given in the Packers & Stockyards Act.

In its announcement, the USDA said that it would finalize certain provisions of the proposed rule related to suspension and delivery of birds, additional capital investment criteria, breach of contract and arbitration, and a requirement for packers to provide sample swine and poultry contracts. The USDA further announced that it would issue a separate Interim Rule which will address poultry tournament systems. The Interim Rule will be open for additional public comment. The original proposed rule received 66,000 comments in 2010. An economic analysis of these provisions shows a cost of less than $100 million for the two combined rules.

OCM is disappointed that the USDA chose to no longer pursue provisions banning packer-to-packer sales, limiting packer buyers and requiring a section on records retention. "Our members strongly feel that the packer sales provisions are essential to creating a fair, open, transparent and competitive marketplace," state OCM Executive Director, Anita Poole-Endsley.

OCM is particularly concerned that the 'harm to competition provision' in the proposed rule remains intact. Appellate Court Rulings have held that PSA requires a showing of harm to competition across the industry before harm to individuals or groups can be considered. Such provision is not contained in the plain language of PSA and the proposed rule differs with the courts on this matter. Requiring such a showing effectively makes violators of PSA immune to accountability for their action.



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