Spending Measure Puts 'GIPSA Rule' on Hold
Language in ag funding bill stops development of final regulation. Cattlemen's groups come out on both sides of the action — for and against.
Livestock and poultry organizations last week praised House lawmakers for approving an agriculture funding bill that prevents the U.S. Department of Agriculture (USDA) from finalizing 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 (FDA) 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 Ag 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 criticized USDA's failure to conduct an in-depth economic impact study of the proposal before it was published.
Several livestock and poultry groups expressed strong support for the House action:
"The National Pork Producers Council is grateful that the House is requiring USDA to take a timeout on the GIPSA rule, which as proposed is bad for farmers and ranchers, bad for consumers and bad for rural America," said NPPC President Doug Wolf. "And contrary to the proclamations from some general farm groups, the vast majority of livestock and poultry producers strongly oppose this regulation, which would cost them millions of dollars and lead to thousands of lost jobs."
"At a time when cattlemen are wondering why the federal government seems determined to put them out of business, it is encouraging to see the U.S. House of Representatives push back on government overreach into the private marketplace," National Cattlemen's Beef Association (NCBA) President Bill Donald said. "If this rule is implemented, family farmers and ranchers have the most to lose, with consumers riding shotgun. This rule will kill jobs and consumer choice and will depopulate rural America. Jobs on the ranch will be lost and trial lawyers will be the only ones to reap rewards. The Senate needs to follow suit by stopping funding for this rule."
"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," said Mike Brown, president of the National Chicken Council. "Now we hope that the U.S. Senate will see the wisdom in the House action and follow suit."
"The more than 1,000 family farmers who raise turkeys in this country rely on production and marketing contracts to make a living," said NTF President Joel Brandenberger. "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."
Said American Meat Institute (AMI) President J. Patrick Boyle, "We appreciate the House of Representatives' recognition that the proposed GIPSA rule is a costly and misguided regulation that ignores its congressional mandate and court rulings from across the land. We hope that the Senate will take the same action so that USDA will do what it appears reluctant to do: write a rule that is consistent with congressional intent and that will not force meat and poultry companies and livestock producers across the country to dismantle the model that has made our U.S. meat and poultry production system competitive and the envy of the world."
"Congress is exactly right to ask that USDA give its proposed rule a reassessment," said National Meat Association CEO Barry Carpenter. "The negative consequences of not doing so will have an enormous economic impact on the industry and be felt disproportionately by innovative, independent operators who rely on marketing arrangements to create a unique product."
The organizations consistently have criticized 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.
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.
A study by John Dunham and Associates estimated the proposal's costs to be far higher than USDA initially suggested. Those findings are available at www.MeatFuelsAmerica.com/GIPSA.
Not all agree: R-CALF castigates house
In a release dated June 16, R-CALF noted that 217 Republicans voted "Aye," with not a single Democrat joining their ranks, to pass the FY 2012 Agriculture Appropriations Bill (H.R. 2112).
During debate over H.R. 2112, only one lone member of Congress demonstrated the courage to admonish the powerful meatpacker lobby that detests the GIPSA rule, said the R-CALF release. In her statement from the floor, Congresswoman Marcy Kaptur (D-Ohio) denounced Congress' effort to prevent USDA from protecting U.S. farmers and ranchers against the unfair, unjustly discriminatory and deceptive trade practices of the highly concentrated meatpackers.
Kaptur told Congress, "And while ranchers, farmers and producers are increasingly being squeezed out of the markets, and small, local slaughterhouses continue to close, large consolidated players manipulate the rules to favor their own business operations, and meat prices rise. Congress simply can't stand by silent. So on behalf of the millions of farmers, ranchers and producers that struggle every day to survive as they face the gargantuan task of competing against monopolistic entities, I oppose the base language in 721 (the section of H.R. 2112 that prohibits GIPSA from finalizing the GIPSA rule)."
Kaptur did not stop there. She said their action of killing the GIPSA rule would imperil the economic stability of the nation's independent livestock farmers and ranchers. "By allowing section 721 to remain in the bill, the House is standing with the few big meatpackers and against the many thousands and thousands of producers," Kaptur said.
In her closing remarks, Kaptur said Congress was once again kowtowing to the corporate meatpacker lobby to the detriment of U.S. farmers, ranchers and consumers.
"After the 2002 Farm Bill, this committee (Congress) prevented USDA from implementing an important provision of law known as the country-of-origin labeling," Kaptur said. "It was the same consolidated meat packing industry crying from the rafters with claims of exaggerated economic costs which was behind the meat labeling COOL delay. We seem to have returned to the dark days, recycling the same talking points.
"It took us almost eight years and, finally, consumers now have the legal right to see where their meat comes from, which is what the vast majority of the American people wanted. So on behalf of the millions of farmers, ranchers and independent producers, I pledge to continue this fight and to prevent a similar eight years of delay and confusion on USDA competition rules in the meat industry," Kaptur concluded.
R-CALF USA CEO Bill Bullard said U.S. cattle farmers and ranchers are grateful for Kaptur's courage in standing up to the handful of powerful meatpackers that are working aggressively to capture the entire livestock supply chain away from independent farmers and ranchers.
"It is alarming that only one member among the 435-member Congress has the courage to stand up for open and competitive livestock markets," Bullard said. "This clearly demonstrates how a handful of powerful, corporate meatpackers can effectively intimidate and manipulate members in the U.S. House of Representatives."
"We will now focus on the U.S. Senate to restore GIPSA's ability to finalize the competition rule as, unlike in the House, the U.S. Senate has historically been far less inclined to cower to the self-interests of the corporate meatpackers that are trying to chickenize our cattle industry by eliminating our competitive marketing system," he concluded.
Note: Voting results for H.R. 2112 are available at http://clerk.house.gov/evs/2011/roll459.xml.
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