WASHINGTON, D.C. — Last week a U.S. House-Senate Conference Committee approved language in an agricultural spending bill that would prevent the USDA from implementing controversial parts of the GIPSA (Grain Inspection, Packers & Stockyards Administration) rule, which is an attempt at reforming livestock and poultry marketing.

The National Cattlemen’s Beef Assoc. (NCBA) and other groups were happy with the outcome of the vote on the bill, which was cast Nov. 17.

“We stand firm behind those members of Congress who were willing to listen and understand the concerns of cattlemen, leading trade organizations, economists, consumers and others,” said NCBA Vice President of Government Affairs Colin Woodall. “This was a vote in favor of innovative family-owned farms and ranches.”

“The vague definitions (in the rule) would open the door to an increased number of lawsuits because mere accusations, without economic proof, would suffice for USDA or an individual to bring a lawsuit against a buyer,” said Robbie LeValley, a cow-calf producer from Colorado.

“This would have been a trial lawyer’s bonanza. I am relieved that USDA will not move forward with this rule as originally written. Congress not only heard us, but they also understood the far-reaching unintended consequences this rule would have created.”

USDA Secretary Tom Vilsack expressed disappointment in this latest development. “We sent a proposal to OMB (White House Office of Management and Budget) that represented a first step in the finalization of that process,” he said, in a published report. “It was focused on the 2008 farm bill definitions, it was focused in part on a fairer system for poultry producers.

“If we are, in fact, being prevented from carrying out our responsibilities, that’s an unfortunate circumstance, but we will do whatever we can do, whatever Congress allows and authorizes us to do to ensure as best we can fair markets. I would be remiss if I didn’t suggest that we will be disappointed if we cannot respond to the concerns that have been expressed by producers across the country.”

The proposed GIPSA rule was published in the Federal Register June 22, 2010. The rule was proposed in accordance with requirements of the 2008 farm bill, as well as under GIPSA’s authority to enforce the Packers and Stockyards Act.

The National Pork Producers Council said the rule was meant to address five specific issues: criteria for determining whether an undue or unreasonable preference or advantage has been given to any producer; whether a poultry dealer has provided enough time for a grower to remedy a breach of contract that could result in contract termination; whether a poultry dealer has given reasonable notice of any suspension of delivery of birds to a grower under a contract; when a requirement of additional capital investment during the life of a contract constitutes a violation of the Packers and Stockyards Act; and factors that comprise a fair use of arbitration, including notification and the option for producers to opt out of automatic arbitration to resolve disputes.

Packers and processors complained about the proposed rule, however, and lobbied against it. They said it went far beyond what the 2008 farm bill required. A concern, they said, was it would require packers and contractors to keep written records to document and justify any price difference or contract term differences, without providing guidance as to what constitutes an acceptable justification.

Woodall said the NCBA is committed to working with USDA to assist in providing “clarity and clear definition in future rulemaking in order to prevent unintended consequences from putting family-owned farmers and ranchers ... out of business.”