Pro business? Drop the GIPSA rule, says AMI

Responding to President Obama’s speech to the U.S. Chamber of Commerce calling on businesses to hire and invest, the American Meat Institute suggests a good place to start would be to drop the proposed GIPSA rule for livestock marketing.

AMI notes that the comment period on the rule closed in November and more than 60,000 comments were filed. USDA presumably is in the process of reviewing the comments.

In December 2010, Agriculture Secretary Tom Vilsack said the USDA would conduct a more extensive economic analysis of the rule in response to requests from industry and Congress. Several economic studies sponsored by industry groups indicate the rule would have negative consequences for livestock producers and the industry overall, but proponents of the rule question those results.

It remains unclear when, or if, USDA will release results of its economic analysis.

“The future direction of the proposed rule is uncertain, and if there’s one thing that American businesses cannot tolerate easily now it’s more economic uncertainty,” says AMI President J. Patrick Boyle. “Uncertainty kills investment and, in turn, economic growth.” 

Realistically, it seems doubtful the administration would simply drop the proposed marketing rules at this stage. USDA spent the summer conducting a series of “competitiveness workshops,” including one in August that attracted more than 1,200 participants to the Colorado State University campus in Fort Collins to debate the GIPSA rule.

Read “A hot day in Fort Collins” for a summary of the workshop’s proceedings.

During that meeting and in other comments, it became clear that Secretary Vilsack, U.S. Attorney General Eric Holder and other administration officials believe the current livestock marketing system is broken and that new regulations are necessary to “level the playing field” for small producers. And, of course, the rule has strong support from numbers of opinionated and vocal producers around the country.

It seems likely that once USDA completes its review of those 60,000 comments and analyses its own economic study, the agency will make some minor changes to the proposed rule to demonstrate responsiveness to all stakeholders, but a final rule similar to the current proposal is likely. Once implemented, at least some aspects of the final rule likely will face legal challenges that could linger in federal courts for years. So stay tuned.

Read more about the proposed rule from AMI.

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