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Agricultural News

USDA Decision to Dump Farmer Fair Practices Rules Upheld by Federal Court

Fri, 28 Dec 2018 06:01:48 CST

USDA Decision to Dump Farmer Fair Practices Rules Upheld by Federal Court A Federal Court has ruled against the Organization for Competitive Markets and their quest to bring back the so called Farmer Fair Practices Rules- put into place by the Obama Administration as they headed out the door in 2016.

OCM sued the Trump Administration's USDA after US Secretary of Agriculture Sonny Perdue said that the outgoing Obama administration’s proposal in December 2016 to establish regulations already partially mandated by a 2008 farm bill would conflict with legal precedents. That would likely result in more litigation in the livestock and poultry industries, and prevent innovation in farming, the government argued. That interim final rule would have made it easier for farmers and ranchers to prevail in cases where they claim packers treat them unfairly in contracts because it would have essentially eliminated the need for proof of competitive harm.

USDA told the Federal court that implementation of the Farmer Fair Practices Rules would have represented a change in USDA’s regulatory approach and would have conflicted with the courts’ historic interpretations of the Packers and Stockyards Act (PSA).

Just ahead of Christmas, the Eighth Circuit denied Organization for Competitive Markets’ petition for review. The court found that the USDA gave “rational reasons for its decision to withdraw.” Furthermore, the USDA’s rollback was only a return to a policy that had been in place before the Obama administration changed the rules.

“An agency’s decision to retain the status quo is more easily defensible than a shift in policy would be,” U.S. Circuit Judge James Loken wrote in the 13-page order. “Here, USDA explained that it was withdrawing the interim final rule and taking no further action on the proposed regulations because the proposed regulatory change of course would generate protracted litigation, adopt vague and ambiguous terms, and might prevent innovation and foster vertical integration that would hinder new market entrants.”

The final paragraph of the ruling pushed any action back on Congress- "We are wary of becoming the ultimate monitorof Congressionally set deadlines, as “courts are not charged with general guardianship against all potential mischief in the complicated tasks of government.” FCC v. Pottsvillle Broad. Co., 309 U.S. 134,146 (1940). Congress gave USDA anambiguous directive in the 2008 Farm Bill. USDA made extensive efforts to comply, promulgating three final regulations and a proposed regulation on the fourth controversial subject it declined to finalize. Congress has demonstrated on-going interest in the issue, can determine that its di rective has been unreasonably delayed, and take appropriate actio n.“ t must be remembered that legislatures are ultimate guardians of th e liberties and welfare of the people in quite as great a degree as the cour ts.” Missouri, Kansas, & Texas Ry. Co. v. May, 194 U.S. 267, 270 (1904). For these reasons, we deny the petition for review in its entirety."

U.S. Circuit Judges William Benton and Bobby Shepherd joined the decision.

The Farmer Fair Practices Act is a signature issue for the OCM- click or tap here to read their backgrounder on the subject. It is reported that OCM is considering their legal options after the Eight Circuit threw out their lititgation against USDA.



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