US House puts GIPSA rule on hold

Livestock and poultry organisations have praised House lawmakers for approving an agriculture funding bill that prevents the US Department of Agriculture (USDA) from finalising its proposed regulation on livestock and poultry marketing contracts.

The House voted 217-203 to pass legislation that funds USDA, the Food and Drug Administration and related agencies for fiscal 2012, which begins Oct. 1, but denies money for USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) to promulgate the livestock and poultry marketing regulation.

Known as the GIPSA rule, the regulation was prompted by the 2008 Farm Bill. But, as 147 House members recently pointed out in a letter to Agriculture Secretary Tom Vilsack, the proposed rule goes well beyond the intent of Congress and includes provisions specifically rejected during debate on the Farm Bill. Lawmakers also criticised USDA’s failure to conduct an in-depth economic impact study of the proposal before it was published.

National Chicken Council
Livestock and poultry groups have expressed strong support for the House action. “We commend the House for voting to rein in USDA’s GIPSA, which went far beyond its mandate from Congress in developing a rule on production and marketing of livestock and poultry,” said Mike Brown, president of the National Chicken Council.

“We have consistently urged USDA to go back to the drawing board and produce a rule that responds to its instructions from Congress rather than trying to destroy the existing system as the proposed rule does. Now we hope that the U.S. Senate will see the wisdom in the House action and follow suit.”

National Turkey Federation
“The National Turkey Federation is very pleased with today’s action by the House. After careful examination, our processor and grower members concluded the proposed GIPSA marketing rule will result in job losses and negatively impact turkey farmers in a variety of ways, including limiting their ability to enter into certain production and marketing agreements,” said NTF President Joel Brandenberger.

“The more than 1,000 family farmers who raise turkeys in this country rely on production and marketing contracts to make a living. If the final rule were implemented, it could result in a fundamental change in the way turkeys are raised in this country, a change that may not benefit farmers. This rule is so flawed it can’t be fixed, and Congress is right to try and scrap it, insisting that GIPSA go back to the specific provisions agreed to in the 2008 Farm Bill.”

The organisations consistently have criticised the proposed USDA regulation, pointing out that it would restrict marketing agreements between producers and processors, dictate the terms of production contracts, require additional paperwork, create legal uncertainty and limit producers’ ability to negotiate better prices for the animals they sell.

Job losses and costs
According to a study conducted by Informa Economics, the GIPSA rule would result in job losses of nearly 23,000, with an annual drop in gross domestic product by as much as $1.56 billion and a yearly loss in tax revenues of $359 million.

The study also found that the regulation would impose on the livestock and poultry industries “ongoing and indirect” costs – eventually borne by producers and consumers – of more than $1.64 billion, including nearly $880 million to the beef industry, more than $400 million to the pork industry and almost $362 million to the poultry industry.

Source: NPPC