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NSAC Comment on the GIPSA Contract Reform Final Rule

December 8, 2011

National Sustainable Agriculture Coalition
For Immediate Release
December 8, 2011

Contact: Martha Noble or Ferd Hoefner, 202-547-5754

NSAC Comment on the GIPSA Contract Reform Final Rule

Washington, D.C. December 8, 2011 — USDA’s Grain Inspection, Packers & Stockyards Administration will issue a rule on Friday that finalizes selected provisions of the GIPSA rule proposed in June 2010 intended to increase protections for growers and farmers who produce poultry and hogs on contract.

The arbitration provision of the final rule is an improvement over the proposed rule.  Farmers who do not choose whether or not to be bound by an arbitration clause in a production contract are deemed by the rule to have declined to be bound by arbitration.

But the final rule also weakens important provisions of the proposed rule.  The proposed rule provided that a processor that requires a farmer to make initial and additional capital investments must also provide a reasonable opportunity for the farmer to recoup the investment over the life of the production contract.  The final rule limits the recoupment requirement to additional capital investments required after a production contract is entered into and omits the recoupment requirement for the initial capital investment.

The final rule also weakens a requirement that packer and processors provide poultry and livestock contract farmers with notice and a reasonable opportunity to remedy an alleged breach of a production contract.  The final rule includes a new broad exemption from the requirements if the packer or processor contends that food safety or animal welfare was concerned in the breach.  There are no safeguards or procedures in the final rule to ensure that packers and processors document these contentions.

The protections provided in this limited GIPSA final rule, which took more than one and one-half year to issue, are an important but very modest first step to ensuring farmers and ranchers a fair shake in dealing with meatpackers and poultry processors.  Major requirements enacted by Congress in the 2008 Farm Bill are on hold due to the inappropriate insertion of a legislative rider into the Fiscal Year 2012 agricultural appropriations bill at the behest of the packers prohibiting further action during this fiscal year.  We look forward to working with farmers and ranchers across the country and with the agency and the Administration to ensure that the major missing pieces become final rules as soon as possible.

The National Sustainable Agriculture Coalition is a grassroots alliance that advocates for federal policy reform supporting the long-term social, economic, and environmental sustainability of agriculture, natural resources, and rural communities.

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Categories: Press Releases

One response to “NSAC Comment on the GIPSA Contract Reform Final Rule”

  1. Tom says:

    The meat packers have bought the politicians. There was a rider on the last funding bill that did not allow the GIPSA rules that had the real teeth to go forward. Instead, the meat packers paid off PR firms, had Congress hold hearings where meat packers were the only witnesses, and where meat packers bought off members of Congress.

    We have the best Congress that money can buy. They repealed the rules that kept the investment banks from raping the economy through the commercial banking system and now they are reducing the ability of the economic rules that protect family farmers from the market power that meat packers abuse.

    When Congress is so bought off, no one really has a chance.

    Half of them should be in jail, not rewriting the rules for their 1% cronies who are capturing the wealth of the nation. Juries should hear these allegations and federal judges who want to play jury should be removed from office.