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USDA Move to Publish Controversial and Outdated Six-Year-Old Rules Will Harm Livestock and Poultry Producers, Add Costs for Consumers

Wednesday, December 14, 2016

Washington, DC -- USDA’s announcement today that it will publish three components of a massive, stale, six-year-old proposed marketing rule is misguided and harmful to livestock and poultry producers, and to the 95 percent of American consumers who enjoy meat and poultry products, according to the North American Meat Institute.

 So controversial and burdensome was the rule when it was proposed more than six years ago and so numerous were its critics that Congress prohibited funding for its development and implementation – a prohibition that expired this year, providing an opening for the U.S. Department of Agriculture’s Grain Inspection and Packers and Stockyards Administration (GIPSA) to resurrect it.

 One of the rules, the “Clarification of Scope” rule, will be published in “interim final” form with an effective date just 60 days after publication in the Federal Register.  This rule would make the use of marketing and other contracting agreements between packers and livestock producers legally risky.  These agreements are often used by producers and packers to ensure an adequate supply of livestock or poultry products that meet the characteristics or attributes consumers demand, like organic, grass-fed, or raised without hormones.

The “Scope” rule flies in the face of the legal standard established by eight different federal appellate courts.  It also is a last minute gift to plaintiffs’ lawyers by making it easier to file specious lawsuits and win them.   

The interim final rule is a bureaucratic end-run not only around what the federal courts have repeatedly told USDA over the years, it also is an attempt to rewrite the Packers and Stockyards (P&S) Act without Congressional approval.  Congress amended the P&S Act less than three months ago on October 7, 2016.  When it did so, it affirmatively chose not to amend the section of the law this rule affects – even though GIPSA has been arguing for its interpretation, without success, for more than 20 years.  

“The practical effect of such a change will be to make it legally riskier to enter into marketing agreements, which in turn, will affect the supply of meat and poultry produced in ways consumers are seeking,” said Meat Institute President and CEO Barry Carpenter.  “This last-minute move to rush a rule out before an administration change will not only limit consumer choice, it is a kick in the teeth of innovative, consumer-focused livestock and poultry producers  who rely on these agreements to help manage business risk.” 

USDA also announced that it will re-propose rules on poultry tournament systems and unfair practices and undue preferences.  Although these proposed rules are also burdensome and controversial, they are not being fast tracked like the injury to competition interim final rule. 

 In September, the Meat Institute joined four other meat, poultry, and livestock groups in a letter sent to Secretary of Agriculture Tom Vilsack.  The groups told Vilsack, “Although GIPSA provided an opportunity for affected stakeholders to comment on the Proposed Rule, more than six years have passed since its publication.  If the agency relies only on the administrative record as it existed when the comment period closed in November 2010, it is affirmatively choosing to ignore the many changes in and evolution of the livestock, meat, and poultry industry during the past six years and would publish a rule on a record that can only be described as stale and not developed in a ‘timely fashion’.” 



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