House committee: Packers and Stockyards rule went around Congress

WASHINGTON — Members of a House Agriculture subcommittee accused Agriculture Department officials of circumventing congressional intent in writing a proposed rule on the marketing of livestock and poultry on July 20 and urged them to extend a comment period on it.

The controversy concerns the implementation of a 2008 farm bill provision directing USDA’s Grain Inspection, Packers and Stockyards Administration to write a rule to establish greater fairness in the marketing of livestock and poultry. GIPSA published the rule on June 22 and established a comment period to expire on August 23.

House Agriculture Livestock, Dairy and Poultry Subcommittee Chairman David Scott, D-Ga., told Agriculture Undersecretary Edward Avalos at a hearing that the rule contained proposals that the farm bill conference committee had rejected as too radical.

“Is this an end run around Congress? Clearly this is a misstep,” Scott said, urging the officials to extend the comment period.

Scott was joined by other Democrats and Republicans, including former House Agriculture Chairman Bob Goodlatte, R-Va. who suggested that the committee might take action to stop USDA from implementing the rule.

Rep. Leonard Boswell, D-Iowa, who chaired the subcommittee during the 2008 farm bill debate, told Avalos and GIPSA Administrator J. Dudley Butler, “You operated within your authority” but added that a compromise might be in order.

House Agriculture Chairman Collin Peterson, D-Minn. said afterward that Avalos and Butler “are not exceeding their authority,” but he added that they should extend the comment period until after USDA and the Justice Department hold a joint workshop on concentration in the meat industry Aug. 27 in Fort Collins, Colo. Peterson added, however, that small packers are worried that the proposal might make it difficult for their value-added businesses.

Comments

The Ranchers-Cattlemen Action Legal Fund-United Stockgrowers of America and the National Farmers Union, which fought hard to get Congress to address the issue of concentration in the meatpacking industry in the farm bill, have praised the rule, saying it would lead to GIPSA enforcing the 90-year-old Packers and Stockyards Act to protect independent farmers and ranchers from unfair and deceptive practices by meatpackers. But the American Meat Institute, the National Cattlemen’s Beef Association, the National Pork Producers Council and other livestock and poultry industry groups have charged that the rule will cause major disruptions in business.

The major industry groups have asked USDA to extend the comment period for another 120 days on the grounds that the scope of the proposed rule and the lack of an adequate economic analysis of its impact on the livestock industry warrant an extension. Peterson told reporters an extra 60 days would be appropriate.

But R-CALF USA and the National Farmers Union oppose an extension.

“Extending the comment period into the fall calf season will give leverage for packers to offer lower prices to producers as a fear mechanism, as we have seen in the past with rules such as country of origin labeling,” NFU President Roger Johnson wrote in a letter to Agriculture Secretary Tom Vilsack.

Concerns

Avalos said the committee the rule reflected Vilsack’s concern about the loss of farmers and ranchers in rural America.

“The rule is about helping these folks,” Avalos said. “For years we have operated on the status quo and we have lost farmers.”

Butler said the rule was to address “a degradation” in rural America, but he and Avalos had trouble answering questions on how the provisions would work.

Rep. Randy Neugebauer, R-Texas, the ranking member on the subcommittee, said, “Rural America is not shrinking due to marketing activities. It is due to productivity. Unfortunately that has caused a shrinking of the population.”

Rep. Walt Minnick, D-Idaho, asked whether a provision forbidding a packer to sell an animal to another packer would mean that a packer who owned a feedlot in Kansas and a packing plant in Washington State would have to move the animals to Washington state for slaughter rather than sell them to a nearby packer.

“I want to know what this silly rule is going to do,” Minnick said.

Butler acknowledged that as the rule is written the packer would have to ship the animals for slaughter. But Avalos noted that the rule is only in the proposal stage and said the final rule will reflect the public comments.

“It is a proposed rule,” Avalos said. “We are encouraging input.”

Tags: livestock, legislation, beef, farm