The Fence Post: Organization for Competitive Markets case for Farmer Fair Practices Rule to be heard Sept. 26

by Staff Report | September 20, 2018

The Organization for Competitive Markets reports that the Eighth Circuit will hear the case regarding the USDA pulling the GIPSA updates, on September 26 at 9 a.m. in St. Louis, Mo.

According to OCM, The Farmer Fair Practices Rule (GIPSA Rule) would have allowed farmers to hold agribusinesses accountable for practices like retaliation, bad faith cancellation of contracts, or collusion efforts to force farmers out of the market. Despite the long history of these abuses in the poultry and livestock industry, USDA halted the rule, making it effectively impossible for farmers to bring unfair practices claims. By eliminating rules designed to level the playing field for family farms, the Administration has instead given large multinational corporations the upper hand.

OCM filed the petition for review in December of 2017.

OCM claims that USDA Secretary Sonny Perdue “illegally withdrew critical protections intended to shield family farmers and ranchers from predatory and retaliatory practices by big agribusiness corporations.” The lawsuit seeks to reinstate protections and stop major meat and poultry producers who contract with farmers from engaging in deceptive and abusive practices, they said.

The hog and beef industries have dramatically changed in recent decades, OCM said.

While some say this is just a sign of the times, OCM believes that the fundamentals of a competitive marketplace are at stake. “Since 1980, 90 percent of U.S. hog farmers and 41 percent of U.S. cattle producers have gone out of business, and over 1 million U.S. farmers have been driven off the land. 71 percent of America’s poultry farmers now live below the federal poverty level. A huge contributor is the fact that our livestock and poultry agribusiness anti-monopoly law, called the Packers & Stockyards Act, is not being enforced, and farmers are not protected from predatory and retaliatory practices by the largest livestock and poultry processing companies,” said the group’s website.

Under the current rules, an individual producer who is harmed by another industry participant (for example, a cattle feeder who is “blackballed” by the packer buyers) has no recourse because the feeder would need to prove harm to the industry. Harm to an individual feeder or producer is not considered a violation of the current Packers and Stockyards rules.

The Farmer Fair Practices rules would have given individual producers the right to ask for a hearing with USDA if they were harmed by a buyer or another member of the industry.