USDA Proposes Sweeping Changes in Undue Preferences Rule Mandated by 2008 Farm BillFriday, June 18, 2010
(American Meat Institute)
USDA today unveiled a proposed rule that, if adopted, would result in sweeping changes to how livestock are marketed and procured by meat packers. The proposed rule, characterized by Agriculture Secretary Tom Vilsack as “aggressive,” was mandated by the 2008 Farm Bill.
The proposed rule includes several new provisions:
A producer would not be required to prove a harm to competition when bringing a claim about an alleged anti-competitive practice;
Criteria would be established for what constitutes undue preferences or unreasonable advantages;
Dealers who operate as packer buyers would only be permitted to purchase livestock for the packer that identifies that dealer as its packer buyer;
Packers would be prohibited from purchasing, acquiring or receiving livestock from other packers;
Producers required to provide capital upgrades to their facilities would have to be given the opportunity to recoup 80 percent of the cost of a required capital investment;
A “clear and conspicuous print” requirement in contracts to ensure producers are provided the option to decline the use of arbitration to settle a dispute; and
Packers, swine contractors and live poultry dealers would be required to provide sample copies of contracts to the Grain Inspection, Packers and Stockyards Administration (GIPSA) within 10 business days and these contracts would be made available on GIPSA’s website for review.
AMI expressed strong concern about the potential impact of these changes.
“USDA is attempting to turn the clock back
on the livestock and meat marketing practices
that have made the U.S. meat production system
the envy of the world and that have delivered
the most abundant and affordable meat products
available to the American consumer,” said AMI
Senior Vice President of Regulatory Affairs and
In an outline of the rule, USDA wrote that a
GIPSA will consider comments on the proposed rule until August 23, 2010. Comments may be sent via email to email@example.com or sent by mail to Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW, Room 1643-S, Washington, D.C. 20250-3604. Copies of the proposed rule and additional information can be found at: http://click.icptrack.com/icp/relay.php?r=39934748&msgid=240006&act=36YG&c=590864&destination=http%3A%2F%2Fwww.gipsa.usda.gov%2F by clicking on Federal Register.
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