USDA proposes new rule under Packers & Stockyards Act to clarify ‘unfair practices’

The USDA has proposed a new rule under the Packers and Stockyards Act that Ag Secretary Tom Vilsack says will better protect farmers, ranchers, and other market participants.

Vilsack made the announcement during an event hosted by the Center for American Progress on Tuesday. “Today we provide an enforcement tool that I think will provide for greater balance in the relationship between farmers and the integrator,” he says. 

The Secretary says the proposed rule is designed to create the opportunity to develop new and better markets. “And that translates to an opportunity for more farmers to have an opportunity for their operation to remain successful and profitable,” he says. The rule would expand transparency, making it easier for farmers to understand the contracts they are making. 

Vilsack says the administration has worked to ensure that farmers couldn’t be discriminated against or retaliated against. “We made sure that the tournament system would operate fairly and that there would not be any specific deductions that caught the farmers by surprise,” he says.

Ethan Lane, vice president of government affairs with the National Cattlemen’s Beef Association says it is a direct attack on producer profitability and creates criteria that would deem any innovation or differentiation in the marketplace improper. Lane says those practices are central to how cattle producers around the country differentiate their products in the marketplace, derive premiums, and attempt to be profitable. “USDA is attempting yet again to undermine that,” he says.  “To get everybody back to some point where they are all receiving the same price for their cattle, regardless of quality in some sort of a misguided attempt to achieve fairness in the marketplace is disappointing, but not unexpected.”

Vilsack says the proposed rule is based on USDA’s extensive administrative case law and builds off precedent established under other unfair practices law.

Julie Anna Potts, president and CEO of the Meat Institute says this is a blatant attempt to pick winners and losers in the market place.  “Under these proposed rules, everyone loses, the livestock producer, the packer, and ultimately the consumer,” she says. 

The proposed rule will be published in the Federal Register for public comment for 60 days.

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