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Producers Express Frustration over GIPSA Rule

by 5m Editor
11 July 2011, at 12:16pm

US - Lawmakers as well as livestock and poultry producers have expressed their frustrations about the GIPSA rule during a hearing about its potential impact on small businesses and the Chairman has called for a revised RFA.

Lawmakers and livestock and poultry producers continued to express their frustration and concern over the livestock marketing rule proposed by USDA's Grain Inspection Packers and Stockyards Administration (GIPSA) in a hearing held last week by the House Small Business Committee Subcommittee on Agriculture, Energy and Trade.

American Meat Institute reports that, in opening remarks during the hearing entitled 'Regulatory Injury: How USDA's Proposed GIPSA Rule Hurts America's Small Businesses', Chairman Scott Tipton (Republican-Colorado) reiterated his call for a revised regulatory flexibility analysis (RFA), noting that the USDA has received more than 61,000 comments from stakeholders yet no comprehensive cost-benefit analysis has been performed.

Mr Tipton said: "Independent studies estimate that the proposed rule would deal a $1.5 billion blow to our nation's economy and directly cause a loss of 23,000 jobs. Clearly, our country cannot afford further economic injury of this magnitude."

Edward Avalos, USDA Under Secretary of Marketing and Regulatory Programs, acknowledged in his testimony that the proposal was not perfect and said USDA would consider the comments it has received and work to address the concerns.

This explanation, however, was not satisfactory to many of the lawmakers on the committee. All the representatives voiced concern relating to how the process was being handled by USDA. Several members on the subcommittee asked Under Secretary Avalos where the USDA was in the process and when a final rule could be expected. The Under Secretary said that GIPSA had never received comments on this scale and was unsure about when a final rule would be available. Several other members raised questions ranging from burdensome recordkeeping requirements to what the economic impact on rural America would actually be. The Under Secretary responded that an economic analysis would better answer those questions.

Also testifying was Robbie LeValley of LeValley Ranch, Hotchkiss, Colorado, who noted that value-based marketing has given her small family business the opportunity to compete for market share at the highest level.

Ms LeValley told the committee: "The consumer has been the one to determine the fair and justified price for the value added product, not USDA. As a result, I have been able to build a small business that supports the local economy and provides consumers with the products they want. Government intrusion into the marketplace is not the answer."

Gary Malenke, of Sioux-Preme Pork Products, Sioux City, Iowa, agreed.

He said: "This is a very tough business – for producers and for packers. Working together in partnership and cooperation will give us the opportunity to be successful together. We don't need to enroll GIPSA, a government regulatory agency, in our business plan – enhancing our partnerships with producers for our mutual benefit is a much better solution."

Joel Brandenberger, president of the National Turkey Federation, noted in his testimony that USDA's chief economist stated just the previous week that the rule met the requirements for an economic significant rule but the agency still has not sent the study to Congress for review as required.

He explained: "USDA now has agreed to conduct an economic assessment, and that is a positive development. Still, no one at the department has committed to submitting the study for public comment before finalizing the rule. This is an essential step if there is to be any level of confidence that the final rule truly has the interests of small family farmers and businesses at heart."

For more information on the hearing, including copies of submitted testimony, click here.