US meatpackers denounce controversial fair play rules

Meat bodies call the GIPSA rules 'draconian' and warn of a 'cascade of litigation'

Government litigation set up to protect farmers from “egregious retaliatory practices” have been criticised by American meat boards, which suggest regulation could inflict billions of dollars of financial damage.

The US Department of Agriculture’s (USDA) Grain Inspection, Packers & Stockyards Administration (GIPSA) announced updated regulation to protect the rights of farmers when dealing with meat processors.

Both the North American Meat Institute (NAMI) and the National Chicken Council (NCC) submitted vehement comments to GIPSA to ditch the so-called Farmer Fair Practices Rule – an interim final rule and proposed legislation.

Chicken body the NCC called the rules “draconian” and said they represented an “abuse of federal regulatory authority”.

‘Negative’ impact

In comments submitted to GIPSA, NCC president Mike Brown warned the agency it had failed to consider the “negative consequences” the regulation could have for consumers, innovation, competition and food safety.

We are particularly troubled that the interim final rule and proposed rules appear designed to increase uncertainty and costly litigation – GIPSA even admits that substantial litigation will ensue – with no quantifiable benefits,” said Brown.

The strongly-worded comments come after an interim final rule that the US Congress blocked for six years, but failed to block last year left an opening for GIPSA policy to move ahead in the final weeks of President Obama’s tenure.

‘Cascade of litigation’

Under the interim final rule, a disgruntled livestock grower will not have to prove harm to competition when challenging a practice by a meatpacker.

Meat groups warned the rule change would lead to a “cascade of litigation” brought under the Packers and Stockyards Act – a law itself established in 1921 to prevent meatpackers from manipulating the market.

Meat bodies have claim the policy changes go against US President Donald Trump’s regulatory reform agenda. GIPSA has not selected laws to be removed as part of the new litigation, a number of meat associations claim.

NAMI president and CEO Barry Carpenter said that if the rules were not withdrawn, the meat industry would be rendered “less competitive” and they would hurt profitability.

GIPSA is conducting an administrative end-run to accomplish what it has failed to do before the courts and before the Congress,” NAMI said in a statement.

The impact of that litigation, or the threat of it, will be to undermine and likely roll back the significant progress made by the livestock and meat and poultry industry in meeting consumer demands during the past quarter century.

The National Turkey Federation also cited concerns: “Our overriding concern is that the increased legal and regulatory uncertainty created by these rules will make it difficult for the industry to reward growers with a premium price for premium performance.

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