Ag Policy Blog

Grassley, Tester Press Ag Secretary to Implement GIPSA Rule

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Sens. Charles Grassley, R-Iowa, and John Tester, D-Montana, asked U.S. Secretary of Agriculture Sonny Perdue to move forward on implementing Grain Inspection, Packers and Stockyards Administration, or GIPSA, rule, in a letter to Perdue on Wednesday.

Grassley was livid earlier this week when told by agriculture journalists about USDA's proposal to withdraw the rule.

"We vehemently disagree with that decision," the senators said in the letter.

"The lack of economic opportunities in rural America creates real challenges for growth and economic development. For the economy in rural America to prosper, people who live, work, and invest there must be able to survive and thrive so they can reinvest earnings into their communities. That is the most effective way to create additional jobs and lasting opportunities for the next generation.

"Many of our constituents believe the current practices of multinational livestock corporations, one of which is being investigated for unprecedented corruption, allow them to exploit farmers and ranchers. The industry has consolidated for decades into its current structure that enables a handful of companies to have extraordinary market power.

"The department of agriculture was called 'the people's department' by President Lincoln because of the important role it plays every day in the lives of farmers and the American people. We look forward to working with you and the department to ensure everyone in agriculture is getting a fair shake so rural America can thrive again."

The livestock marketing rules under GIPSA date back to language in the 2008 farm bill. The rules were controversial throughout President Barack Obama's administration.

Early proposals from USDA drew fire from major industry groups and Congress. The rules were then blocked by Congress. Lawmakers refused to fund any efforts to advance the rules. Congress relented in the fiscal year 2016 funding bill and USDA advanced the rules again.

The three rules were dubbed as the "Farmer Fair Practices Rules."

The rules included an interim final rule on how USDA wanted courts to interpret a provision of the Packers and Stockyards Act. Courts have ruled in cases between poultry growers and poultry companies that a grower has to demonstrate a company's action against the individual grower harmed the entire poultry market.

Since the 1980s, USDA used the standard in beef or pork cases that a livestock producer doesn't have to show harm to competition to bring a Packers and Stockyards case against a company. USDA has pushed to apply the same language to poultry contracts.

Another proposed rule would have given producers more rights when dealing with marketing contracts. The rule would ensure packers can't retaliate against producers who show their contracts to attorneys. The rule also would have prevented packers from giving undue price preferences in marketing contracts.

The final proposed rule would have restructured the tournament payment system by giving USDA authority to determine if a ranking system for poultry growers' prices is fair or unjustly discriminatory, or deceptive. The poultry industry has opposed any USDA rules that could create problems with the company tournament systems.

Read the Grassley, Tester letter here:…

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