A House Agriculture subcommittee has blasted top USDA officials on the department's proposed rule on livestock marketing practices, with some members from both political parties arguing that USDA overreached and went far beyond Congress' intent expressed in the 2008 farm bill.
The matter concerns the proposed rule on livestock marketing practices announced by the Grain Inspection, Packers and Stockyards Administration (GIPSA) on June 18, with a public comment period originally scheduled to end Aug. 23. That comment period was subsequently extended to Nov. 22.
Livestock Subcommittee Chairman David Scott (D-Ga.) told Agriculture Under Secretary Edward Avalos that he heard "a very passionate, very serious outpouring of concern from this committee." Scott said his subcommittee was in agreement that USDA had "overstepped its boundaries."
Scott said parts of the 2008 farm bill that were "soundly rejected in the legislative process in the House and the Senate" during its debate in both the House and the Senate now show up in the GIPSA proposal.. "For you, and the department to arbitrarily go against the wishes and intent of Congress is serious," said Scott.
Both Scott and ranking subcommittee member Randy Neugebauer (R-Texas) said they are troubled that the proposed rule amending the Packers and Stockyards Act ( PSA ) goes beyond the intent of the 2008 farm bill. The legislation authorized GIPSA to issue rules clarifying certain provisions of the PSA and implementing new ones related to capital investments, arbitration and poultry contracts.
Agriculture Committee Chairman Collin Peterson (D-Minn.), who attended the hearing, and other subcommittee members voiced concerns about the broad scope of the rule and its likely adverse effects on the livestock and poultry industries. One panel member said the rule would put livestock producers in his district out of business. Some lawmakers who participated in crafting the 2008 farm bill pointed out that Congress chose not to act on some proposals now included in the GIPSA rule because they believed they would disrupt and destroy the U.S. livestock industry.
The proposed rule would limit pork producers' options in selling pigs to processors, according to the National Pork Producers Council. "Several of the rule's provisions go further than what was required by the farm bill," said NPPC President Sam Carney. "NPPC believes the proposed rule is overly broad and very vague, with many terms not well defined. As written, it appears the rule would have a negative effect on the ability of pork producers to enter into arrangements to produce hogs under contracts and to sell hogs through marketing arrangements."
The forcefulness of the comments from members of both parties made clear that the final rule will likely contain some major changes from those that many in the industry, and the panel members, believe are draconian in nature.
When USDA announced that it was extending the GIPSA rule comment period for 90 days, Edward Avalos, USDA's Under Secretary for Marketing and Regulatory Programs, said, "In recent days, it has become apparent that there are misunderstandings about what is actually proposed in the rule." He later said he thought he would "take this opportunity to provide some important explanations. This rule does not limit or prohibit marketing agreements, the use of premiums, or other value-added activities. The rule does not require anyone to do business with any particular person or require packers to pay all producers the same price."
Reactions to the 90-day extension were decidedly mixed. For example, the American Farm Bureau Federation said it is "pleased" by the decision because it would give the organization more time to analyze the complex proposal. But the National Farmers Union issued a statement saying it is "disappointed" with the extension because it will provide "leverage for packers to offer lower prices to producers as a fear mechanism. In addition, said NFU President Roger Johnson, "This rule is for the protection of the producers and USDA has allowed for a sufficient amount of time to comment. Further extending the deadline is proof that USDA is buckling under the pressure of industry."
