July 30, 2010
Bowing to pressure from a group of large-scale livestock and poultry packers and processors and House Agriculture Committee members who are aligned with them, USDA’s Grain Inspection, Packers & Stockyards Administration (GIPSA) announced on July 26 that it is extending the public comment period on proposed rules for the Packers & Stockyards Act by 90 days. Public comments are now due by November 22, 2010.
As NSAC reported last week, the proposed rules implement the directive of Congress in the 2008 Farm Bill that USDA issue administrative rules to clarify and strengthen the measures of the Act that protect farmers and ranchers. The proposed rules would clarify conditions for livestock and poultry packers and processors compliance with the Act. They would also provide farmers and ranchers with a fairer marketplace and conditions for livestock and poultry production.
GIPSA has posted a question and answer document for the proposed rule. The document addresses in detail many of the questions raised in the House Agriculture Committee hearing. One example is the potential effect of the proposed rules on the use by packers and processors of forward contracts, formulas, and livestock buying based on a grid. GIPSA emphasizes that these practices will still be allowed, with premiums and discounts offered to producers also allowed. The proposed rules, however, would require that packers and processors document the reasons for offering the premiums and discounts and treat all livestock sellers of the same type and quality of animal equally.