#NationalFoodDay : Trump Kills Obama GIPSA Rule Protecting Small Farmers From Big Agribusiness

by Ike Obudulu Posted on October 24th, 2017

Washington, DC,  USA:  Trump administration last week rescinded Obama GIPSA ‘Farmer Fair Practices Rules’ that protects independent farmers from behemoth agribusinesses. National Food Day is committed to supporting fair conditions for food and farm workers, supporting sustainable farms and limiting subsidies to big agribusiness, protecting the environment and animals by reforming factory farms, expanding access to food and alleviating hunger, reducing diet-related disease by promoting safe healthy foods, and also promoting health by curbing junk-food marketing to kids.

The Trump administration is ending an Obama-era litigation rule for farms that would have made it easier for independent farmers to bring lawsuits against big food companies they raise chicken and other livestock for.

A day before it was set to take effect, Agriculture Secretary Sonny Perdue decided not to move forward with an Obama-era interim final rule of the Farmer Fair Practices Rules, which was written in 2016 by the U.S. Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA). The agency also announced it will take no further action on a proposed regulation of the Farmer Fair Practices Rules.

The Grain Inspection Packers and Stockyard Administration said it has decided not to take any action “at this time” on another rule proposed in December, which mapped out what criteria the Agriculture secretary can consider when determining whether the tournament system for poultry growers is fair.

The Farmer Fair Practices Rules aimed to make it easier for farmers to bring companies like Tyson Foods, Pilgrim Pride and Perdue to court over what they say are unfair, deceptive and retaliatory practices. The interim final rule prevented farmers from having to prove in court the company’s actions not only harmed them individually, but also harmed competition throughout the entire industry.

The interim final rule would have broadened 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, it would have made such actions per se violations of federal law even if they didn’t harm competition or cause competitive injury, prerequisites for winning PSA cases. (The proposed rule would have defined the terms in the interim final rule.)

USDA in 2010 proposed several PSA provisions – collectively known as the GIPSA Rule – that Congress mandated in the 2008 Farm Bill. Although lawmakers did not include a provision eliminating the need to prove a competitive injury to win a PSA lawsuit, the agency included one in its proposed regulation.

Advocates say the interim final rule marked the first step in creating a culture of accountability, particularly in the poultry industry, where they say farmers are forced to compete against each other in what’s often a rigged system.

Sally Lee, a director of the contract agriculture reform program at the farm advocacy group RAFI-USA, said big companies provide farmers with the chicks, feed and veterinary services to raise birds to slaughter weight — about six pounds for broiler chickens.

Under the tournament system currently in place, farmers are then pooled together and ranked by who raised the biggest birds for the least amount of cost to the company.

Lee said those who cost the company the least make more than the average base pay promised in their contract, while those who cost the company more make less. She said the weight of the birds largely depends on how much feed the farmer is given and if the chicks were healthy to begin with.

National Farmers Union (NFU) is a strong supporter of the GIPSA Farmer Fair Practices Rules.

“It is deeply disappointing that USDA did not side with family farmers in the long-contested debate over rules for the Packers and Stockyards Act. The Farmer Fair Practices Rules offered a basic, yet important first step to addressing the unfair practice that family farmers and ranchers face in the extremely consolidated meatpacking industries,” Roger Johnson, National Farmers Union (NFU) president. “The withdrawal of the competitive injury rule is unjustified, given the long-held, plain language interpretation by the Department that growers do not need to prove harm to the entire industry when seeking relief from poultry companies for unfair contract practices. It is particularly egregious given the abuses that poultry growers face in the vertically integrated marketplace.

“With this decision, USDA has given the green light to the few multinational meatpackers that dominate the market to discriminate against family farmers. As the administration has signaled its intent to side with the meat and poultry giants, NFU will pursue congressional action that addresses competition issues and protects family farmers and ranchers.”

Ken Maschhoff, National Pork Producers Council president supports the Trump administration move.

“Eliminating the need to prove injury to competition would have prompted an explosion in PSA lawsuits by turning every contract dispute into a federal case subject to triple damages,” Maschhoff said. “The inevitable costs associated with that and the legal uncertainty it would have created likely would have caused further vertical integration of our industry and driven packers to own more of their own hogs.

“That would have reduced competition, stifled innovation and provided no benefits to anyone other than trial lawyers and activist groups that no doubt would have used the rule to attack the livestock industry.”

Also in support of Trump, Mark Dopp, senior vice president for regulatory and scientific affairs and general counsel for the North American Meat Institute, said the rule would have been “extremely detrimental” for the meat industry.

Dopp noted the rule contradicted the rulings of eight federal appellate courts, which all said an injury to competition was necessary to bring a claim under the Packers and Stockyards Act. Fear of litigation from lowering the burden of proof, he said, would have kept companies from entering into individualized contracts with farmers.

Independent Farmers complain that the Big Agri-corporations use retaliatory business practices against farmers who speak up, saying they’re being treated unfairly — claims those companies have disputed. In the meantime, farmers seeking to take those companies to court must prove corporate wrongdoing that harms competition across the industry, not just individual damage.

The regulations which the Trump administration have now ended, came out during President Barack Obama’s final weeks of office and sought to make it easier for those farmers to take legal action.

Happy National Food Day.

Author

Ike Obudulu

Ike Obudulu

Versatile Certified Fraud Examiner, Chartered Accountant, Certified Internal Auditor with an MBA in Finance And Investments who has both worked for and consulted with some of the world's largest companies on main street and wall street in over 20 countries, Ike brings his extensive reporting and investigations experience to bear on his role as Chief Editor.
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