The National Pork Producers Council in comments submitted again urged the U.S. Department of Agriculture to withdraw a regulation related to the buying and selling of livestock. It also delivered to the agency comments from 630 pork producers and others in the pork industry, opposing the regulation and asking that it be withdrawn.
The comments were on an interim final rule of the so-called Farmer Fair Practices Rules, which was written by USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA). The interim final rule is set to become effective Oct. 19. (NPPC in late March submitted comments in opposition to the broader Farmer Fair Practices Rules.)
The interim final rule would broaden the scope of the Packers and Stockyards Act (PSA) of 1921 related to using “unfair, unjustly discriminatory or deceptive practices” and to giving “undue or unreasonable preferences or advantages.” Specifically, the regulation would deem such actions per se violations of federal law even if they didn’t harm competition or cause competitive injury, prerequisites for winning PSA cases.
In its comments, NPPC said the rule “is illegal and in conflict with the clear direction of every federal Circuit Court of Appeals that has reviewed the Packers and Stockyards Act, was improperly promulgated, is not supported by the Administrative Record and will have a destructive impact on the meat sector by harming the very farmers GIPSA is entrusted to protect.”
USDA in 2010 proposed several PSA provisions – collectively known as the GIPSA Rule – that Congress mandated in the 2008 Farm Bill; lawmakers rejected a provision that would have eliminated the need to prove a competitive injury to win a PSA lawsuit. Additionally, eight federal appeals courts have held that harm to competition must be an element of a PSA case.
“The Interim Final Rule promulgated without any justification, will trigger a torrent of lawsuits against members of the pork industry and create uncertainty that will stifle investment and innovation without providing any identifiable benefits to consumers,” NPPC said. “In doing so, it will harm U.S. pork producers and their employees and customers, reversing decades of growth and job creation by the U.S. pork industry.”
An Informa Economics study found that the GIPSA Rule today would cost the U.S. pork industry more than $420 million annually – more than $4 per hog – with most of the costs related to PSA lawsuits brought under the “no competitive injury” provision included in the interim final rule.
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