Courthouse News Service: Farmers Press Eighth Circuit to Clear Regulatory Hurdle

Protesters gather outside the Eighth Circuit on Sept. 26, 2018, in support of small farmers fighting a regulatory hurdle put in place by the Trump administration. (JOE HARRIS, Courthouse News Service)

by Joe Harris | September 26, 2018

ST. LOUIS (CN) – Small farmers still waiting on a years-old legislative promise lobbied the Eighth Circuit on Wednesday to dissolve a roadblock put in place by the Trump administration.

Intended to make it easier for large agribusiness corporations to be held accountable for discriminatory practices, the Farmer Fair Practice Rule allows small farmers to seek relief under the Packers and Stockyards Act merely by proving that the corporation’s actions caused individual harm, rather than competitive harm to the entire market.

The rule was adopted during the final days of Obama administration, but President Donald Trump’s Secretary of Agriculture Sonny Perdue kept it from taking effect and then scrapped the rule entirely in October 2017.

“The concern was that this rule as proposed would lead to unnecessary and unproductive litigation,” Perdue said in a conference call at the time with reporters from Europe.

Perdue argued that predatory business dealings “are moral actions that I don’t believe regulations and litigation actually solve.”

The Organization for Competitive Markets, a Nebraska-based advocacy group for farmers, filed a petition that December to have the Eighth Circuit review Pedue’s actions.

Defending that effort Wednesday at oral arguments in St. Louis, Democracy Forward attorney Karianne Jones said the rule was published to comply with a 2008 farm bill that originally carried a two-year deadline.

“The farmers need recourse and they need market power in what is becoming an increasingly concentrated market,” Jones said in an interview. “That’s what the rules were designed to do in the first place. That’s what Congress wanted to happen. They wanted to give farmers a way to fight back against unfair retaliatory practices and the department is sitting back and not giving the farmers the protection they need.”

Experts say the implications of the 2016 rule would be profound in particular for the chicken and pork industry, where farmers enter into long-term contracts with processors such as Tyson Foods and Pilgrim’s Pride that fix compensation at levels that can become unprofitable over time, forcing farmers into debt.

Presiding over oral argument this morning, U.S. Circuit Judges Duane Benton, James Loken and Bobby Shepherd repeatedly questioned attorneys from both sides about the court’s authority in intervening in a legislative matter.

“I think that the court is concerned that it only steps in on egregious cases, but we think this is an egregious case,” Jones said in an interview. “The agency is over eight years past its statutory deadline, is doing essentially nothing to move the rule forward, has not provided the court any meaningful plan to move the rule forward and we think in that kind of case and given the importance of these rules to farmers across the country that this is absolutely the egregious case for the court to step in.”

Weili Shaw represented the U.S. government. He argued that the Department of Agriculture has devoted a tremendous amount of resources to comply with the mandate.

Shaw told the court that the agency is planning on putting the matter on its 2019 agenda for implementation in 2020. Before any implementation, however, he said certain steps including an economic analysis, public comments, a consideration and response to those comments, and a review need to take place.

Shaw identified several unintended consequences with the rule as written, saying it gives undue influence and preference to a certain group over others. The agency needs time to work through those issues.

After the hearing, Shaw directed reporters to seek official comment with the Office of Public Affairs. That office has not returned a message seeking comment.

Outside of the courthouse, a group of a dozen protesters with the advocacy group Family Farm Action gathered in support of the challengers.

“We’re here supporting the farmers that are here today,” said Chelsea Davis, communications director of Family Farm Action. “It took a lot of courage for them to come out against big corporations and ask that Trump sign these orders. With the stroke of his pen he can implement these rules.”

The group held signs demanding that Trump fire Perdue. One man held a blow-up pen stating that “Trump can fix this.”

“It’s about simply having the opportunity to stand up and say we want fair prices for the products we are producing, we want to have a fair shot in the marketplace, and these rules allow them to do that without facing any harm from corporations who are really just about the bottom line and the bottom dollar,” Davis said. “We really need a fair playing ground. We don’t have that now and these farmers are at the mercy of the whims of these corporations.”