Groups press administration to act on new regulation

By TIM HEARDEN

Capital Press

On the first anniversary of a proposal for sweeping new regulations for how meat packers buy and sell livestock, proponents of the rules urged President Barack Obama and the USDA to act.

In a conference call with reporters early June 22, representatives from the National Farmers Union, the Western Organization of Resource Councils and other groups urged an end to what they called packers' "virtual monopoly" in livestock and poultry markets.

"The Obama administration needs to act now to implement and enforce the GIPSA rule," NFU president Roger Johnson said, adding he's encouraging producers to call on the administration to get the rule out.

"This rule is critically important to farmers and ranchers," he said. "We have a very, very consolidated marketplace in the livestock industry right now. We need the industry to be competitive again."

Weiser, Idaho, beef producer Mabel Dobbs said meat-packing interests have been "pounding on the administration and Congress" since the U.S. Grain Inspection, Packers and Stockyards Administration unveiled regulations aimed at bringing more fairness to the prices producers receive for their animals.

The proponents argued that during the presidential campaign, Obama promised to give family and independent farmers fair access to markets, control over their production decisions and transparency in prices.

The groups lament that four multinational companies still control about 85 percent of the U.S. fed cattle market and assert that unfair practices have contributed to the loss of more than a half million ranchers over the last 30 years.

"It's time for livestock producers and consumers to speak up for this rule," said Dobbs, who represents the Western Organization of Resource Councils.

Speakers also included Minnesota hog producer Darwin Boch of the Land Stewardship Project and Mike Weaver, president of the Contract Poultry Growers Association of the Virginias in Fort Seybert, W.Va. The producers accused packers of an array of abuses, such as showing preferences among providers and forcing contract growers to spend thousands of dollars on facility upgrades they didn't need.

Dobbs and her husband, Grant, ran 1,000 head of cattle and lost their ranch years ago. Now they've come back on a smaller scale, and Dobbs said she wants to be sure prices are fair so her granddaughters can continue to ranch.

"Twenty-plus years later, there's still no fair cattle market in which to participate," she said.

The conference call was the latest salvo in a bruising political battle over the proposed GIPSA rule, which was introduced on June 22, 2010.

Responding to concerns about increasing consolidation in the livestock and poultry industries, the rule would add new sections to the Packers and Stockyards Act of 1921 setting broad new controls over how animals are bought and sold.

For instance, packers would be barred from acquiring livestock from other packers, producers would be able to recoup up to 85 percent of the cost of required capital investments and an arbitration system would be set up to handle disputes between packers and producers.

Under the rule, farmers and ranchers would no longer have to prove that an unfair business practice harmed the entire marketplace, but only their own operations, Johnson said.

A public comment period on the rule was extended last year after more than 60,000 written comments were submitted. The rule also dominated discussion at an August 2010 workshop on industry consolidation conducted by U.S. Agriculture Secretary Tom Vilsack and Attorney General Eric Holder.

The National Cattlemen's Beef Association, the National Pork Producers Council and other livestock and poultry groups have argued the rule would cause major disruptions in business. But the NFU and the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America support the rule, having long pushed Congress to address the issue of concentration in the meat-packing industry.

Lately the battle lines over GIPSA have shifted to the halls of Congress, as the House of Representatives on June 16 passed an agriculture appropriations bill that bars the USDA from finalizing the proposed regulations.

The vote followed a letter last month from 147 House members -- including more than a dozen from the West -- urging Vilsack to withdraw the proposal and replace it with a new one.

"At a time when cattlemen are wondering why the federal government seems determined to put them out of business, it is encouraging to see the U.S. House of Representatives push back on government overreach into the private marketplace," NCBA president Bill Donald said in a statement.

USDA spokesman Jim Brownlee said earlier this month it's still early in the appropriations process, which also will involve the Democrat-controlled Senate. The USDA is still evaluating the submitted comments and conducting an economic impact analysis.

"At some point, we have to act," Johnson responded on June 22. "The ship is sinking. We need action to plug some of the holes here. We're just encouraging the administration to speed this up and get this rule out as quickly as possible."

Online

Grain Inspection, Packers and Stockyards Administration livestock rule: www.gipsa.usda.gov