On Tuesday, the United States Department of Agriculture (USDA) announced that it would be not be implementing the “Farmer Fair Practice rules.”
The rules, also known as Grain Inspection, Packers, and Stockyards Administration (“GIPSA”) rules, were supposed to be put in place to promote fair and competitive trading practices.
However, now that the USDA will be officially withdrawing from the rules, this will have a devastating impact on contract farmers. While, for the meat industry this is a big win.
“Had the rules gone into effect this week, they would’ve made it a little easier for poultry and livestock farmers to sue processors or meatpackers over unfair treatment by updating language in the Packers and Stockyards Act of 1921 to clarify a stance USDA and GIPSA have long held: that farmers shouldn’t have to prove “competitive injury” (that their buyers have done something to impact all farmers in their position, as a class) in order to pursue legal action,” writes the “New Food Economy.”
The rules would have given farmers more power with their customers and the meat processors.
Contract farmers working for big companies are primarily paid for raising the birds. The companies provide the birds, their food, and even the medical expenses.
This evidently gives these companies tremendous power over the farmers.
“They dictate everything. We have no control over anything,” said Rudy Howell, a contract farmer for Perdue in North Carolina. “The only recourse you had was to go to GIPSA—and they can’t do nothing because Congress, every year the farm bill came up they put a rider on it, and [didn’t] give the money to enforce the laws.”
The implementation of the rules was delayed to President Obama’s last days in office and it was ultimately left to his predecessor President Trump to sign the rules into effect.
“We had a lot of hope, with the election of President Trump, that these rules would be implemented,” said Joe Maxwell, executive director of the Organization for Competitive Markets. “Placing America first over multinational corporate interests seemed to be a commitment made by him during his campaign. I believe many in the rural community have been credited for electing the President, and a lot of that was based upon the belief that these rules would be put in place—that family farmers and ranchers would be put first.”
Learn more about how this USDA decision impacts farmers here.