US agriculture secretary Tom Vilsack announced that on June 22, this year’s USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) will publish a proposed rule, that would provide significant new protections for producers against unfair, fraudulent or retaliatory practices.
“Concerns about a lack of fairness and commonsense treatment for livestock and poultry producers have gone unaddressed far too long,” said Vilsack. “This proposed rule will help ensure a level playing field for producers by providing additional protections against unfair practices and addressing new market conditions not covered by existing rules.”
The proposed rules address concerns that have been discussed for many years and were developed at the direction of the 2008 farm bill, which requires USDA to carry out specific rulemaking to improve fairness in the marketing of livestock and poultry.©
Farm bill discussions
During farm bill discussions in 2007, over 200 organisations across the country urged Congress to include a livestock title to improve market fairness and competition for producers.©
Additionally, USDA identified other areas where new rulemaking is needed to ensure the marketplace is fair and competitive for producers.©Many of the concerns addressed in the rule were raised during the dozens of Administration Rural Tour stops attended by Secretary Vilsack last year, and the joint USDA-Department of Justice Competition Workshops held this year.©Additionally, GIPSA held three public meetings in 2008 to gather comments, information, and recommendations from interested parties.©
Consolidation and integration
Many of the concerns were related to increasing consolidation and vertical integration in the livestock and poultry marketplace, and shrinking farm numbers.©For instance, there were over 666,000 hog farms in 1980, but only roughly 71,000 today.©In the cattle industry, there were over 1.6 million farms in 1980, but only roughly 950,000 today.
©In the hog industry, producers received 50% of the retail value of a hog in 1980, but only 24.5% in 2009. For cattle, producers received 62% of the retail value of a steer in 1980, but only 42.5% in 2009.©In the poultry industry today, a grower makes $0.34 per bird, while the processing company however on average makes $3.23 a bird.
The proposed rule would provide the following protections: