GIPSA scares me. A lot. I agree with a comment made at NCBA Policy Forum at Cattle Industry Summer Conference that GIPSA is a shot at the packers that hits producers. Some of the following information is adapted from the NCBA Backgrounder, which offers more details.
As part of the 2008 Farm Bill, USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) was directed to issue regulations regarding poultry and swine contracts; arbitration use in contracts; and to establish criteria for the Secretary to consider in determining whether an undue or unreasonable preference or advantage has occurred in violation of the Packers and Stockyards Act. GIPSA released their proposed rule on June 22, 2010.
WHAT IT DOES
• Under the new definitions included in the proposed rule, “competitive injury” and “likelihood of competitive injury” are re-defined and made so broad that mere accusations, without economic proof, will suffice for USDA or an individual to bring a lawsuit against a buyer.
• The regulation requires buyers purchasing livestock through marketing arrangements to submit a sample copy of each unique type of contract or arrangement to GIPSA within 10 days of it being agreed to.
• New criteria require buyers to justify every single penny difference they offer to one producer over another. Inadequate justification for a price differential would give cattle producers yet another way to bring suit against another party.
• The proposed rule bans packer-to-packer sales of livestock.
• Order buyers will only be able to represent one packer.
WHY I’M SCARED
First, I’m concerned the proposed regulations will cause packers to withdraw marketing agreements. Quality of cattle varies and market premiums and branded programs allow producers to capitalize on extra value. Take these benefits away and our industry no longer has any incentive to improve. There also are some privacy issues with personal information contained in marketing agreements.
WHAT YOU SHOULD DO
USDA is taking comments from all interested parties. Send them yours. Examples will be on the NCBA website soon. Also, contact your representatives and request that they let the White House and Secretary of Agriculture know the proposed regulations will not work for cattle producers. Finally, show up for the Department of Justice livestock competition workshop in Fort Collins August 27 and make your voice heard.