USDA Issues Proposed GIPSA Rule Changes

Yesterday USDA's Grain Inspection, packers and Stockyard Administration or GIPSA announced the updating of three specific measures that USDA says will protect farmers from unfair treatment.

USDA Secretary Tom Vilsack said there has been some misunderstanding of the rule by the livestock industry which applied a much more expansive definition that USDA intended.

Vilsack: "We never intended the 2010 proposals to preclude the use of alternative marketing arrangements but we were designing these rules to try and respond to the comments we received and provide further assurances that packers could continue — under appropriate circumstances — to offer premiums to producers in order to encourage the production of meat products that were valued by their customers. This new proposal I will say has been significantly modified from the 2010 proposal and should allay the concerns and fears that this is somehow going to preclude or prevent value-added contracts, breed certification, source verification or product-method certification. That is not the intent. The intent is to provide great clarity a sharper brighter line so folks know exactly know what they can and cannot do, where they will or will not expose themselves to potential liability. We believe that certainty is going to make it easier for the industry."

Soon after the USDA news release was issued both the National Pork Producers Council and the National Cattlemen's Beef Association issued their own news releases stating that these opposed rules would be "devastating" according to the NPPC as well as being described as "destructive" by NCBA.