Tester, Grassley blast USDA rollback on GIPSA rules

Havre Daily News staff

U.S. Sen. Jon Tester "vehemently disagrees" with USDA's decision to rollback protections that prevent consolidation in agriculture, a release from his office said.

In a bipartisan letter to USDA Secretary Sonny Perdue signed by the Montana Democrat and Sen. Chuck Grassley, R-Iowa, Tester slammed the agency's decision to withdraw two rules related to the Packers and Stockyards Act, commonly referred to as the "GIPSA rules."

"The industry has consolidated for decades into its current structure that enables a handful of companies to have extraordinary market power," Tester and Grassley wrote. "Recognizing that fact, Congress intentionally instructed the Secretary of Agriculture to promulgate new rules in the 2008 Farm Bill to ensure a better functioning marketplace for farmers and ranchers in the livestock and poultry industry."

Tester hosted a series of Farm Bill listening sessions across Montana this year with family farmers and ranchers, the release said.  During these listening sessions, Tester has raised concerns about the consolidation of Montana family ranches and discussed policies that will strengthen opportunities for local producers.

The proposed rule would have allowed producers to sue over perceived "unfair, unjustly discriminatory or deceptive practices" and giving "undue or unreasonable preferences or advantages."

The National Pork Producers Council praised the rollback, calling it a big win for pork producers.

"Elimin-ating 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," NPPC President Ken Maschhoff said in a press release. "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.

R-CALF USA, a national independent cattle producer organization based in Billings, blasted the rollback and praised Tester and Grassley for their letter.

"We applaud Senators Grassley and Tester for standing up for America's farmers and ranchers in the wake of Secretary Perdue's action of catering to the multinational meatpackers and their entrenched corporate trade associations," R-CALF CEO Bill Bullard said in a release.

Sen. Pat Roberts, R-Kan., chair of the Senate Committee on Agriculture, Nutrition and Forestry, praised the rollback.

"Today, rural America has received long-awaited good news," said Roberts said in a release. "In the heartland, farmers and ranchers applaud the rollback of the 'GIPSA' rules." 

"The Obama administration spent the better part of a decade ignoring the calls from farmers, ranchers and agriculture economists warning of the billion-dollar blow this rule would have levied against American agriculture," he added.

Other groups, like R-CALF, disapproved of the decision.

"I am disappointed. I'm not surprised. I don't think anyone is truly surprised. But yes, we're very disappointed," said Don Stull, vice president of the Organization for Competitive Markets. "Sen. Roberts has sided with multinational agribusiness corporations to the detriment of farmers and ranchers."

In their letter, Tester and Grassley wrote the opposite of Roberts' comments, saying the instructions in the 2008 Farm Bill were to prevent unfair activity.

"The lack of economic opportunities in rural America creates real challenges for growth and economic development," they wrote. "For the economy in rural America to prosper, people who live, work and invest there must be able to survive and thrive so they can reinvest earnings into their communities. That is the most effective way to create additional jobs and lasting opportunities for the next generation.

"Many of our constituents believe the current practices of multi-national livestock corporations, one of which is being investigated for unprecedented corruption, allow them to exploit farmers and ranchers," the senators continued. "The industry has consolidated for decades into its current structure that enables a handful of companies to have extraordinary market power."