By Sara Wyant
© Copyright Agri-Pulse Communications, Inc.
WASHINGTON, June 28 - A Senate Agriculture, Nutrition and Forestry Committee hearing to explore the state of the nation’s $250 billion livestock sector, which Chairman Debbie Stabenow, D-Mich, described as a “major area for job and economic growth” quickly turned into an opportunity to bash U.S. agencies for over regulating the industry, along with debate over ethanol and trade policies.
Ranking member Pat Roberts, R-Kan., said the government is attacking the multi-billion dollar livestock industry with too many regulations, which will have far reaching implications on the economy worldwide.
“The livestock industry has been under regulatory attack—those are harsh words, I intend them to be -- from both the EPA and the Department of Agriculture,” This is especially true of the USDA as it applies to the proposed Grain Inspection, Packers and Stockyards Administration (GIPSA) rule.”
“During the last farm bill, we had a strong, spirited debate on many of the exact proposals that were included in the proposed rule, and we rejected them all, in some cases by substantial vote margins. So much for congressional intent,” Roberts added.
“The actions of USDA on this rule and the past activities of GIPSA Administrator J. Dudley Butler as a lawyer in the private sector call into question the department’s impartiality on this issue,” said Roberts.
“Butler made a career out of suing many in the livestock and processing sectors,” Roberts added, “The rule as proposed looks like a trial lawyers’ full employment act.” With customary flair, the Kansas Senator suggested that Agriculture Secretary Tom Vilsack put Butler in the “witness protection program.”
Butler did not testify, but USDA’s Chief Economist Joe Glauber, who is doing a cost-benefit analysis of the proposed GIPSA rule, did.
Glauber said analyzing the impact of the proposed rule is much more difficult, given “how the regulations could affect behavior by packers and integrators and how they do business.”
Sen. Mike Johanns, R-Neb., asked Glauber if he felt pressure to make his findings conform to the political views of the Obama Administration and USDA.
Glauber said Secretary Vilsack said he would have a “hands off policy… that he would allow me to do the analyis and that’s what I intend to do.”
Steven Hunt, CEO of U.S. Premium Beef LLC, said the proposed rule calls on USDA to scrutinize transactions where producers are paid more than an average price for their cattle, which could be harmful to producers of all sizes “but especially damaging to the smaller producers that the proposed rule is purportedly designed to help.
“Our records show that producers of all sizes have benefited from USPB’s value-based system. However, our smallest producers typically have earned the largest premiums per head.”
However, South Dakota pork producer Dennis Jones, representing the South Dakota Farmers Union, told senators the rule “will help to ensure fairness, transparency, protection and bargaining rights for producers, and should help to restore at least a degree of competition for agriculture markets.
“A lack of market power is but one of many reasons for a shrinking population of farmers and ranchers, but stronger enforcement and greater clarification of the PSA (Packers and Stockyards Act) should help to slow and hopefully reverse that trend,” Jones testified.
Sen. Chuck Grassley, R-Iowa, called out those in the livestock industry who badmouth ethanol as a key factor in raising feed costs, which Glauber noted are expected to remain high for “quite some time.”
“I just wonder if the people coming up in the next panel realize you can’t raise corn for $2.50/bushel,” Grassley asked. “Do you want corn or don’t you want corn? It costs about $4.00 to raise corn.”
Chairman Stabenow said she wanted regulatory certainty for large livestock operations. Regarding concerns about the proposed GIPSA: “I will be watching and working with USDA, my ranking member Sen. Roberts, and ontinue to work with stakeholders to find a workable solution that does not hinder economic development and regulation.”
To listen to highlights of the hearing: http://www.agri-pulse.com/Audio-Wednesday.asp
To watch Sen. Roberts’ opening remarks:
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