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New rules aimed at limiting US meat processing market power

Beef Central, 27/12/2016

The US Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA) has announced an update in regulations that ‘protects the rights of farmers’, according to the agency.

The Farmer Fair Practices Rules falls under the US’s Packers and Stockyards Act and seeks to level the playing field for farmers against meat packers.

In his last five weeks as US Secretary of Agriculture, Tom Vilsack said that US poultry growers in particular were vulnerable to market risks and concentration in the processing sector. All too often, processors and packers wielded the power and farmers carried the risk, he said.

The Farmer Fair Practices Rules consist of an interim final rule and two proposed rules which reinforces the USDA’s position “that it is not necessary to demonstrate that an unfair practice harms the entire market in order to prove a violation of the Packers and Stockyards Act.”

Many US industry groups and policy makers have been vocal in their dissatisfaction with the move, especially making it in the last days of the Obama Administration. The rule changes could open up the pork industry and other livestock segments to even more vertical integration, because of the costs of more regulation, the US National Pork Producers Council said.

The National Cattlemens Beef Association officials believe the rules could jeopardise the livestock industry across the country.

“As we have consistently stated, if adopted, this rulemaking will drastically limit the way our producers can market cattle and open the floodgates to baseless litigation,” NCBA president Tracey Brunner said.

“In a time of down cattle markets, the last thing USDA needs to do is limit opportunity. The fact of the matter is, we don’t trust the government to meddle in the marketplace.”

A new US Secretary of Agriculture will be appointed by the Trump Administration early next year, and could review and remove the temporary rules.

 

 

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