New Livestock Rules Cause House Ag Committee, Industry to Blow a Fuse

On Tuesday, a House Agriculture Subcommittee on Livestock, Dairy and Poultry held a meeting in the lead up to the 2012 Farm Bill that descended into a contentious complaint session by Democrats and Republicans alike over the new rules proposed by the USDA’s Grain Inspection Packers and Stockyards Administration (GIPSA). Many Ag Committee members take campaign donations from the industries that would be affected (in the 2010 cycle, House Agriculture Committee members have taken a combined $236,500 from the poultry and egg industry, and $281,611 from the livestock industry), and their reaction makes clear then that these rules could hold the potential for real reform.

The new rules came on the heels of a series of joint workshops between the USDA and the Department of Justice at which many poultry producers, dairy producers and other farmers complained of unfair contracts that left them in debt and beholden to a few key players in the industry. These major reforms aim to reverse the trend of decline in small and mid-sized farms, a current focus for the USDA. The AP (via ABCNews) described the new rules back in June this way:

The rules would place the sharpest limits on meat companies since the Great Depression, drastically lowering the bar that farmers and ranchers must meet to sue companies whom they accuse of demanding unfairly low prices.

The rules would dictate how meatpackers buy cattle on the open market, and prohibit them from showing preference to big feedlots by offering them special incentives not available to smaller producers.

They would also limit the control chicken companies have over the farmers who raise birds for them. The companies couldn’t require farmers to take on debt to invest in chicken houses, for example, unless farmers were guaranteed to recoup 80 percent of the cost.

The law would also make it easier to file suits under the Depression-era Packers and Stockyards Act by stating that farmers don’t need to prove industrywide anticompetitive behavior to file a lawsuit under the act.

Secretary of Agriculture Tom Vilsack acknowledged back then that these reforms were long overdue, saying “The reality is, the Packers and Stockyards Act has not kept pace with the marketplace … Our job is to make sure the playing field is level for producers.”

However, the livestock industry has brought their lobbyists out in full force, alarmed by the changes being pursued all around them: the potential for a ban on non-therapeutic use of antibiotics in livestock (via the FDA and Congress), which would require Confined Animal Feeding Operations (CAFOs) to dramatically rethink their practices; the new dietary guidelines released by the USDA, which suggest decreasing meat intake along with eating more vegetables and whole grains; and the current debate over whether or not to build a pipeline for corn ethanol, extending the fuel’s tax credit, and increasing the amount that can be blended into our gasoline, which would all most likely raise feed costs for livestock producers. Thus the livestock, poultry and egg industry has already spent over $700,000 on lobbying, and it probably won’t let up soon.

The House Ag Subcommittee seemed to echo the industry’s fears. Chris Clayton of the The Progressive Farmer quoted some of the committee members on Tuesday, including Subcommittee Chairman David Scott, D-GA, who said that USDA officials had “very, very seriously overstepped their boundaries.” House Agriculture Committee Chairman Collin Peterson, D-MN, along with others on the committee are pushing to extend the comment period for the proposal for a 120 days after the August 27th Department of Justice workshop on livestock in Fort Collins, Colorado — a stalling tactic which could result in the industry watering down the rule.

The response to the GIPSA rules is a big test for the USDA, which plays the confusing dual role of promoting and regulating agriculture. On Tuesday, USDA Undersecretary for Marketing and Regulatory Programs Edward Avalos was in the hot seat, and according to Clayton, was “stressing, repeatedly, that the livestock rule “is a proposed rule” and that USDA wants to hear from the industry.”

The industry has built relationships with politicians on the right and left and has been lobbying them with the profits it is trying to protect for years. Will reformers, who have long fought for just these kinds of reforms, turn the heat up from their side? If there is a silver lining for the reforms, it is that the Senate is more open to them. (excepting industry stalwart, Senate Agriculture Committee Chairwoman Blanche Lincoln (D-AR), whom Tom Laskawy at Grist predicts will lose in November in his though-provoking write up on the GIPSA rules controversy). But if major changes to the livestock industry are going to take hold, it will require voices from the public and the USDA holding its ground. We’ll stay on this story as it develops.

5 thoughts on “New Livestock Rules Cause House Ag Committee, Industry to Blow a Fuse

  1. Paula, I think you have it down. We have the best Congress money can buy and they sell out pretty cheap considering the benefits these companies rake in from them.

    These new GIPSA rules will help separate the wheat from the chaff. We really do need to get rid of some of that chaff in D.C.

    Those crying on the committee should have written these rules up IN THE LAST FARM BILL but lacked the courage to stand up for what is right. They would rather sell the interests of family farmers to those who are bribing them.

    I for one welcome finding out who the corporatists are in government.

    Tom

  2. The uproar over these proposed rules makes it painfully obvious that our elected officials are not concerned with what WE the voters want, but only with what THEY can get.

  3. As a small scale livestock producer (yes you can call it a family farm) I’d like it to be known that these proposed rule changes will have the opposite impact they are intended to.

    On our ranch, we work hard to create a premium product. The marketplace rewards us for differentiating ourselves. Under the proposed rule changes, the premium we receive for our product would be negated by the fact that producers with lesser quality-therefore less valuable- livestock would be able to file suit against our customers (cattle feeders) for the difference in price.

    Cattle feeders will have no incentive to purchase superior products which in turn will eliminate the incentive to produce higher quality products. At that point the only way to stay competitive will be to squeeze every last bit of efficiency out of cattle production systems.

    Before we jump to conclusions about agribusiness being in bed with congress, I’d advise you to take a long hard look at what exactly these proposed rule changes would mean for the livestock industry and in turn, the food industry.

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