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‘Disaster’ law for the meat industry delayed

Oscar Rousseau

By Oscar Rousseau+

12-Apr-2017

Opponents of the GIPSA farm bill warn it could lead to a 'cascade of litigation'
Opponents of the GIPSA farm bill warn it could lead to a 'cascade of litigation'

A controversial rule governing fair trade practices in the US meat industry, set to come into force in April, has been delayed for six months.

The White House has deferred the so-called interim final rule of the Grain Inspection, Packers and Stockyards Administration (GIPSA) for 180 days – a move met with delight across the American meat industry.

The new rule, set up to protect farmers when selling livestock to meat processors and originally due to come into force on 22 April, has been described as a “disaster” for the meat industry by opponents of the Obama-era policy.

Still without a new secretary under the Donald Trump administration, the US Department of Agriculture (USDA) delayed the rule, as the government seeks comment on whether it should be scrapped. If not, it will now come into force on 19 October 2017.

News of the delay to the controversial policy was welcomed by a number of meat trade associations, which have been vociferously opposed to the GIPSA rule.

This is another step toward common sense and away from counterproductive government intrusion in the free market,” said the National Cattlemen’s Beef Association (NCBA) president Craig Uden.

That said, while a delay is welcome, ultimately this rule should be killed and American cattle producers should be free to market our beef without the threat of government-sanctioned frivolous lawsuits.

The North American Meat Institute (NAMI) warned that the interim final rule would do nothing but damage the meat industry and make lawyers richer.

Why is the GIPSA rule controversial?

Under the interim final rule, the USDA or a farmer would no longer need to prove true economic harm has been dealt, as is currently the case. Instead, they only need to say they were treated unfairly to file a lawsuit against anyone who buys their livestock. Many meat trade associations claim this could lead to a "cascade of litigation".

‘Deep consequences’

Allowing the interim final rule to become effective would simply line the pockets of trial lawyers, while making our industry less competitive and our livestock producer-partners less profitable,” said Barry Carpenter, president and CEO of NAMI.

The interim final rule also is inconsistent with a Presidential Executive Order on reducing regulations and controlling costs, which requires that two regulations must be identified for repeal before a new regulation may move forward.

National Chicken Council president Mike Brown commended the USDA for delaying the rule and said comments filed on 24 March by the meat industry could have sparked a change of tact inside government.

With this extension notice, it is clear the administration has recognised this is a complicated and controversial issue with deep economic consequences for American poultry and livestock producers,” said Brown.

The comments filed have obviously had an impact, and we thank the department for postponing the effective date to allow for a more thorough and meaningful review.

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