WASHINGTON, Nov. 4 – The U.S. Department of Agriculture decided to abandon some of the most controversial provisions of the Grain Inspection, Packers and Stockyards Administration (GIPSA) proposed rule to reform livestock and poultry marketing practices, Agri-Pulse has learned.

The Department plans to forward the so-called GIPSA regulation to the White House Office of Management and Budget (OMB) for review on Friday, according to industry sources who were briefed on the matter on Thursday.

They offered conflicting accounts of which portions of the rule, as originally proposed, would be subject to OMB scrutiny, and whether a comprehensive cost-benefit analysis conducted by USDA Chief Economist Joe Glauber would accompany the submission.

Some sources indicate that USDA will recommend “final rule” status for language that addresses livestock and poultry contracting concerns raised by Congress in the 2008 Farm Bill. These provisions cover undue or unreasonable preference or advantage; reasonable notice to growers prior to suspension of delivery of birds, required facilities upgrades; termination of production contracts; and the use of arbitration to resolve a dispute. 

Others say that USDA will not define preferential treatment.

The Department, according to our contacts, will recommend that a section of the proposed rule that deals with tournament pay systems in the poultry industry be implemented as an interim final rule with a request for public comment.    

But some additional provisions sought by USDA to “ensure the marketplace is fair and competitive for producers,” as USDA described them in a June 2010 press release announcing the proposed regulation, have been dropped. They include prohibitions on packer-to-packer sales and exclusive arrangements between packers and dealers, and a requirement that packers must retain records. 

All other parts of the original proposal will remain at USDA for further debate, including a section that contains USDA’s interpretation of competitive injury.


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