AMI urges Obama to withdraw proposed GIPSA rule

by Meat&Poultry Staff
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WASHINGTON – President Obama’s speech on Feb. 7 to the US Chamber of Commerce in which he said he wants to partner with business and encourage business investment was welcome news to the American Meat Institute. AMI suggests an excellent first step would be to withdraw one of the most onerous and controversial rules ever proposed by the US Department of Agriculture: the livestock marketing rule published in June by USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA).

In November, the comment period on the proposed rule closed and generated more than 60,000 comments. The proposal also triggered a strong response from Capitol Hill, where 115 House members wrote Agriculture Secretary Tom Vilsack Oct. 1, 2010, saying, “The proposed rule is sweeping in its scope and would have major consequences in the marketing of livestock and poultry for producers and processors of all sizes. In order for Congress and the public to evaluate this rule and its implications with full transparency, a thorough economic analysis is necessary.”

“The future direction of the proposed rule is uncertain, and if there’s one thing that American businesses cannot tolerate easily now it’s more economic uncertainty,” said J. Patrick Boyle, AMI president. “Uncertainty kills investment and, in turn, economic growth.

“President Obama today said, ‘If there is a reason you don’t share my confidence, if there is a reason you don’t believe that this is the time to get off the sidelines – to hire and invest – I want to know about it,’” he added. “’I want to fix it.’ We are glad to hear those words. Our own economic impact analysis, which was necessitated by USDA’s failure to conduct one, showed that this proposal could cost 104,000 jobs and remove $14 billion from the GDP. The proposal also circumvents judicial precedent and goes well beyond the modest Congressional mandate included in the 2008 Farm Bill. We hope the President will move swiftly to fix this misguided regulatory end-run around Congress and the Courts.”

Bankers such as Mark Greenwood at Ag Star Financial have been outspoken about the chilling effect this rule will have on a banker’s willingness to lend money to livestock producers, providing further evidence of this proposal’s detrimental impact if finalized, Boyle noted. Greenwood published an op-ed in December in opposition to the rule.

“We’ve been telling anyone who would listen that this proposal stands to harm the US agricultural economy and the economy as a whole,” Boyle said. “We are gratified that the President has committed to listening to concerns like ours and we hope he will remove this impediment to investment and growth by withdrawing the rule.”

To read more about the rule, visit www.MeatAMI.com/gipsa.
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