GIPSA decision makes advocates fear Perdue will be a pro-business regulator

GIPSA decision makes advocates fear Perdue will be a pro-business regulator

By Jenny Hopkinson

10/17/2017 08:11 PM EDT

It was one of Agriculture Secretary Sonny Perdue’s first major farm policy moves since taking office, but advocates for small farmers are worried that scrapping proposed GIPSA protections for poultry growers could be a sign of things to come.

Perdue was in Spain on Tuesday morning when a pair of Federal Register notices announced USDA was discarding two of three proposed rules that would have been implemented by the department’s Grain Inspection, Packers and Stockyards Administration.

Perdue withdrew an interim final rule that would have lowered the bar for producers of poultry and other livestock to sue the meatpacking or processing companies with which they have contracts. And USDA also will take no further action on a proposed rule to shield contract growers from unfair practices.

The rules were among the most high-profile pending regulations that confronted Perdue when he took office in April, and presented him with a lose-lose situation, pitting small farmers against processors and large agribusiness interests. Now, farmers and advocates are concerned Perdue’s decision means he and President Donald Trump will continue to side with agribusiness interests on other regulatory matters.

"I’m thoroughly disappointed and surprised that Trump hasn’t seen fit to help the little guys and the American family farmers, as he promised he would do as he was campaigning," said Mike Weaver, a West Virginia poultry grower and president of the Organization for Competitive Markets. "This is a tremendous letdown to small family farmers and middle America."

As for Perdue, who has pledged to run a more farmer-friendly department, Weaver said: "He’s demonstrated today that he’s a company man."

Perdue defended the decision while on a conference call with reporters Tuesday, arguing the measures would have done too much to invite "unnecessary and unproductive litigation.

"Obviously I want to assure you the USDA and GIPSA remain committed to fair trade practices, financial integrity and competitive markets," the secretary said.

"My goal at this point is to make sure that in the industry — both those on the production side and those on the buying/processing side — that we abide by the USDA motto, and that’s ‘Do right and feed everyone,’" he continued, promising vigilance in looking after the needs of contract growers.

"And we’ll be watching that our producers individually and collectively are not disadvantaged by unfair, uncompetitive rules that they operate under, and I look forward to doing that," he added.

USDA officials had said next to nothing about the department’s plans for the GIPSA rules since Trump took office. The interim final rule was set to take effect on Thursday — a date that had been pushed back twice from March — forcing Perdue’s hand. The department also opened and then extended public comment periods for the proposed rules.

The trio of regulations had previously been placed on the Unified Agenda’s inactive list, raising questions about the fate of the remaining draft rule, which pertains to poultry-grower ranking systems, a common industry practice through which growers’ payments are based on performance. Jake Wilkins, a USDA spokesman, told POLITICO that officials are still reviewing comments and working to determine if regulation of the ranking systems is necessary.

The rules have drawn harsh criticism from poultry companies, processors and other livestock groups, which contend the regulations would have prompted a flood of lawsuits and caused uncertainty for growers and integrators alike.

On the other side of the argument, contract farmers — a segment of the industry that includes more than 5,000 chicken growers in Perdue’s home state of Georgia, the country’s top poultry producer — generally supported the measures, arguing that producers in their situation require greater protection from unfair practices in an industry where power is concentrated at the top.

Perdue’s decision drew praise from livestock groups and key farm-state Republicans.

"Today, rural America has received long-awaited good news," Senate Agriculture Chairman Pat Roberts said in a statement. "In the heartland, farmers and ranchers applaud the rollback of the ‘GIPSA’ rules."

House Agriculture Chairman Mike Conaway offered an equally laudatory response, as did groups like the National Pork Producers Council and the National Chicken Council.

Closer to home for the secretary, Sen. David Perdue (R-Ga.) said his cousin delivered a "win for Georgia’s agriculture industry" because of the anti-regulatory nature of the decision.

"This action also sends a clear signal that President Trump and Secretary Perdue are serious about undoing Obama-era regulations that place an undue burden on rural America," David Perdue continued. "I applaud the Trump administration for taking the concerns of rural America seriously by getting big government out of their way. The last thing that Georgia’s agriculture industry needs is more bureaucracy."

But advocates and groups representing farmers were especially disappointed in the decision in light of Trump’s campaign-trail commitments to stand up for farmers and the working class — and they saw it as a harbinger of potential future pro-agribusiness regulatory moves.

"Farmers have made clear that they need protection from harmful and abusive practices that are standard in their industry," Sally Lee, program director at Rural Advancement Foundation International-USA, said in a statement. "President Trump pledged that he would take a stand for them, but is instead taking another step in the opposite direction by canceling the fair-practice rule."

USDA doesn’t have many major regulatory deadlines looming, but the organic animal-welfare rule has been delayed until Nov. 14. How Perdue will handle that regulation is not clear, but he can still delay it. The administration would have to go through a formal rulemaking to take it off the books or to change it.

Later this month Perdue faces a Trump-imposed deadline to submit a report from the Interagency Task Force on Agriculture and Rural Prosperity, an effort that Trump created by executive order and that Perdue is leading.

The report is expected to propose ways to boost the rural and agricultural economies, in part by identifying regulatory burdens on farmers and rural communities that could be targeted. Trump gave the task force 180 days, or until this Saturday, to finish its review.

Some advocates saw Perdue’s GIPSA decision as a prelude to anti-regulatory moves that could be proposed by the task force.

"I think we will continue to see this type of thing down the line, where they judge things to run counter to the goals of the administration and the positions of the big industry players," said Greg Fogel, policy director for the National Sustainable Agriculture Coalition. "And they will target those things. I don’t expect them to be different at the end of their regulatory review process."

Concerns over the scrapped rules also are being amplified by Perdue’s plan to merge parts of GIPSA, which has been a standalone agency within USDA’s regulatory mission area, into the Agricultural Marketing Service as part of his broad reorganization of the department. AMS is tasked with marketing and promoting U.S. agricultural products.

"You are … getting rid of core protections for farmers at the same time you are getting rid of agency oversight for those protections," Fogel added. "Put those two things together and it’s kind of a tough sell to say that the administration still cares and is looking out for small farmers."

Helena Bottemiller Evich, Catherine Boudreau and Christine Haughney contributed to this report.

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