At issue is a rule proposed in June 2010 by USDA’s Grain Inspection, and Packers and Stockyards Administration (GIPSA) that would fundamentally alter the relationships between meat and poultry processing companies and their livestock and poultry suppliers. No detailed economic impact analysis was done by GIPSA when the proposed rule was first published because the agency claimed that the rule was not economically significant. Three private analyses, including one commissioned by AMI, have found that the proposal far exceeds the threshold that would require GIPSA to conduct a more comprehensive analysis. AMI estimates the proposal’s cost at $14 billion.
After 115 House members wrote in October 2010 to Agriculture Secretary Vilsack urging such an analysis, the Secretary agreed in late 2010 to conduct one. Now, in this most recent letter, lawmakers are asking for a firm timeframe for completion of that analysis and a withdrawal and re-proposal of the rule once the analysis is complete.
“The sheer number of signatories on this letter is a testament to the growing concern on Capitol Hill about the proposed GIPSA rule. Congress is asking a fundamental and essential question: when will USDA tell us the price tag on this rule?” said AMI President and CEO J. Patrick Boyle. “We applaud the lawmakers, also, for reiterating that USDA exceeded its Congressional mandate in the proposed rule and that the proposal must be redrawn and re-written consistent with that mandate.”
“Congress is exactly right to ask the Secretary to go back to the drawing board. There was no economic analysis, as should have been required with a proposal of this magnitude, and this rule will have a significant impact on the industry. The negative consequences will be felt disproportionately by innovative, independent operators who rely on marketing arrangements to create a unique product,” said National Meat Association CEO Barry Carpenter.
Boyle noted that a third of House members signed the letter – something he called “almost unprecedented.”
“We thank each of these 147 lawmakers for their commitment to good government, and particularly Rep. Jim Costa (D-CA) and Rep. Reid Ribble (R-WI) who initiated the effort,” Boyle said. “The letter’s signatories together represent districts that comprise the vast majority of rural America and together, their districts risk nearly 50,000 jobs if this rule is implemented as written.”
To view the letter, go to http://www.meatami.com/ht/a/GetDocumentAction/i/69368.
Source: AMI, NMA