June 17, 2014
Ed. Note (April 21, 2016): On Tuesday April 19, 2016, the House Appropriations Committee convened to debate and pass their FY 2017 House Agriculture Appropriations bill. This bill funds the major programs and functions of the U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA). Perhaps most concerning of the riders passed, was the “GIPSA Rider”, introduced by Representative Andy Harris (R-MD), which prohibits USDA from protecting poultry, hog, and cattle farmers against anticompetitive, deceptive, fraudulent, retaliatory and other abusive business practices by multi-national meat processing companies. The Senate’s appropriations bill was passed without the inclusion of the rider. NSAC and our members will continue to fight to keep this deleterious rider from the final, joint appropriations bill. Though the following post was originally published in 2014, all of the background information is still relevant, and the same obstructionist methods have been used in 2016 to weaken farmers’ rights and protections.
With the annual Congressional appropriations cycle underway, there has once again been a lot of talk in Congress about the so-called “GIPSA rider.” The GIPSA rider refers to a legislative provision tacked onto the annual agriculture funding bill. In this case the rider is a package of policies that severely limits USDA’s ability to protect farmers’ basic rights — like the right to free speech or freedom of association — in their dealings with large meatpacking and poultry companies.
The big picture issue is that a small handful of huge meat and poultry companies have been able to use their market power to get away with the fraudulent, deceptive, and anti-competitive and abusive practices that have allowed them to profit at the expense of small, independent farmers for years. To address this problem, the 2008 Farm Bill required USDA to write regulations, under the Packers and Stockyards Act, to provide basic protections for farmers who do business with these companies. But when USDA tried to write the regulations, the meat and poultry companies launched a full -scale attack to get Congress to prevent USDA from finalizing those farmer protections.
This effort by some in Congress to use the annual appropriations process to stop USDA’s efforts to provide protections for livestock and poultry farmers is called the “GIPSA rider,” which is a reference to USDA’s Grain Inspection Packers and Stockyards Agency (GIPSA), the agency in charge of enforcing the Packers and Stockyards Act.
Below we provide some of the basic background on this issue and detail an amendment pending in the House of Representatives in support of farmers and fair practices. In a second post, we provide additional details on the market competition and contract reform rules that the GIPSA rider is attempting to forestall.
Background in Brief
The Packers and Stockyards Act is the primary law governing livestock and poultry markets. The goal of the Packers and Stockyards Act — which became law way back in 1921 — is to make livestock and poultry markets open, transparent, and competitive and to protect farmers and ranchers from fraudulent, deceptive and abusive practices in their dealings with the meat industry.
The 2008 Farm Bill directed USDA to issue regulations to help define and enforce the Packers and Stockyards Act. Though the law has been on the books for decades, it has never gone through the rulemaking process that is normally part of the basic implementation of any statute. The lack of rules has made it very difficult over the years to enforce key portions of the Act.
Hence, the corrective action that Congress took in the 2008 Farm Bill was critical and long overdue. It held out the promise of having clear ground rules that are necessary to prevent unfair, discriminatory, and deceptive practices within the livestock and poultry industries.
USDA issued the proposed rules in 2010. To date, however, only a very few of those proposed rules have been finalized. The delay, in large part, has been due to the riders attached to the annual appropriations bills ever since the proposed rules came out. In essence, the big meat and poultry companies have used the backdoor approach of annual riders on the appropriations bills to reverse the decision made in the 2008 Farm Bill.
The Appropriations Committees do not have jurisdiction over policy, but only over spending. Hence, their job is to determine the annual funding level for GIPSA and its Packers and Stockyards Program, but not to determine what the policies are. The policy job is the responsibility of the Agriculture Committees.
In the lead up to what became the 2014 Farm Bill, the House Agriculture Committee passed a provision that would have repealed the 2008 Farm Bill section of the Packers and Stockyards Act, prevented any of the proposed rules from being finalized, forced the rescission of most of the rules that have already been finalized, and directed GIPSA to stop taking any action to enforce the law. Thankfully, this complete giveaway to the big meat and poultry companies was rejected in the House-Senate conference on the farm bill and therefore there is no repeal of the 2008 provision or interference with USDA’s job to enforce the law.
When Congress rejected the gutting of the Packers and Stockyards Act in the Farm Bill, that should have been the end of it. The authorizers have spoken, and the issue should not come up again until the next consideration of the Farm Bill in 2018. But such was not the case. The big companies went right back to work and convinced the House Agriculture Appropriations Subcommittee to put the rider back in play. Senate appropriators did not include the rider in their bill. Now both the House and Senate versions of the bill are headed for floor action.
With the floor debate over the agriculture funding bills for Fiscal Year 2015 looming before us, the House of Representatives sits poised to vote on this very policy that will prevent USDA from finalizing several commonsense rules that aim to protect the rights of farmers. Worse, the so-called “GIPSA rider” would rescind rules that have already been finalized. First, however, the full House will have a chance to vote on an amendment to reduce the impact of the rider.
Attempt to Beat Back the House Rider
Although the agriculture spending bill (HR 4800) that is on its way to the House floor sometime this summer contains the awful GIPSA rider that will once again limit USDA’s ability to protect farmers rights, there is a glimmer of hope that Congress will finally start to chip away at these anti-farmer attempts.
Representative Chellie Pingree (D-ME) has introduced an amendment that will remove two of the most harmful provisions from the rider, allowing USDA to finalize a portion of these common sense rules.
So, what would the Pingree Free Speech and Transparency Amendment do?
It would strike the House language that prevents USDA from finalizing two important rules to ensure farmers have the right to free speech and transparency in how their pay is calculated.
Big meat and poultry companies don’t want any spotlight on the tactics they use to keep contract farmers under their tight control, so they really don’t like it when farmers talk to their Members of Congress or USDA officials about these abusive practices. Similarly, they don’t like it when farmers join together in associations to speak out about the abuses and insist on better treatment by the companies. As a result, it is very common for livestock and poultry companies to retaliate against farmers who speak out about their circumstances, or join together in associations to do so as a group. Such retaliation can include contract cancellation, cuts in their payments, delivery of diseased animals, or the indefinite suspension of delivery of animals or chickens to their farms.
Any of these actions can lead to severe economic distress, and in some cases bankruptcy for the farmers, who often go $1 million or more in debt to build the facilities on their farms to service these contracts. This fear of retaliation has been one of the major impediments to enforcement of the Act, and one of the reasons the Congress can plead ignorance to the plight of these farmers.
The payment methods used to pay poultry and livestock farmers are notoriously complicated and opaque. The lack of transparency often allows companies to shift costs to farmers and to manipulate prices without detection.
Not only is it common sense to allow farmers to know how their pay is calculated to help them make better management decisions, but it prevents livestock and poultry companies from manipulating an opaque system they control.
Action to Support the Pingree Amendment
If adopted and passed by a majority of members of the House of Representatives when the House Agriculture Appropriations Bill comes up for a vote on the House floor in the coming weeks, the Pingree amendment would remove the provisions currently contained in the House bill to protect farmers from retaliation and to create some transparency in how big meatpacking and poultry companies calculate a farmer’s pay.
NSAC has joined with our allies across the country — within the farm, faith, and rural communities — to stand in opposition to the House GIPSA rider and in support of the Pingree Free Speech and Transparency Amendment.
Click here to learn how you can take action and urge your Members of Congress to support the Pingree amendment and protect farmers’ rights.
Categories: Action Alerts, Competition & Anti-trust