The regulation (GIPSA rule) was prompted by the 2008 Farm Bill. But as 147 House members recently pointed out in a letter to Agriculture Secretary Tom Vilsack, the proposed rule goes beyond the intent of Congress and includes provisions specifically rejected during debate on the Farm Bill. Lawmakers also criticized USDA’s failure to conduct an in-depth economic impact study of the proposal before it was published.
“At a time when cattlemen are wondering why the federal government seems determined to put them out of business, it is encouraging to see the US House of Representatives push back on government overreach into the private marketplace,” said National Cattlemen’s Beef Association President Bill Donald.
Mike Brown, president of the National Chicken Council, said: “We have consistently urged USDA to go back to the drawing board and produce a rule that responds to its instructions from Congress rather than trying to destroy the existing system as the proposed rule does. Now we hope that the US Senate will see the wisdom in the House action and follow suit.”
“This rule is so flawed it can’t be fixed, and Congress is right to try and scrap it, insisting that GIPSA go back to the specific provisions agreed to in the 2008 Farm Bill,” said National Turkey Federation President Joel Brandenberger.
“Congress is exactly right to ask that USDA give its proposed rule a reassessment,” added National Meat Association CEO Barry Carpenter. “The negative consequences of not doing so will have an enormous economic impact on the industry and be felt disproportionately by innovative, independent operators who rely on marketing arrangements to create a unique product.”
The organizations consistently have pointed out the proposed USDA regulation would restrict marketing agreements between producers and processors, dictate the terms of production contracts, require additional paperwork, create legal uncertainty and limit producers’ ability to negotiate better prices for the animals they sell.
According to a study conducted by Informa Economics, the GIPSA rule would result in job losses of nearly 23,000, with an annual drop in gross domestic product by as much as $1.56 billion and a yearly loss in tax revenues of $359 million.
The study also found that the regulation would impose on the livestock and poultry industries “ongoing and indirect” costs – eventually borne by producers and consumers – of more than $1.64 billion, including nearly $880 million to the beef industry, more than $400 million to the pork industry and almost $362 million to the poultry industry. A John Dunham and Associates study estimated the proposal’s costs to be far higher than USDA initially suggested.