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USDA Unveils New Rules For Livestock Sales

WASHINGTON/REUTERS

U. S. cattle, hog and poultry producers will gain additional protection against unfair sales practices in a livestock-marketing rule unveiled June 18 by Agriculture Secretary Tom Vilsack.

Among other steps, the rule would bar meat packers from offering better prices to large feeders than smaller operators without good reason and give poultry producers more leverage in dealing with integrators who dominate the business.

“This proposed rule will help ensure a level playing field for producers by providing additional protections against unfair practices and addressing new market conditions not covered by existing rules,” said Vilsack in a statement.

One section of the rule was immediately controversial. It says that under the 1921 Packers and Stockyards Act, the foundation of the Agriculture Department’s fair play rules, growers can show a practice is unfair without having to provide anti-competitive intent.

The National Chicken Council, representing poultry processors, said USDA invited lawsuits by taking a position contrary to a series of court decisions. USDA said its new rule may prompt “judicial reexamination of this issue.”

The rule is open to a 30-day comment period that is one of the last steps to issuing a new regulation.

Producers have complained for years of difficulty in getting a fair price. The 2008 farm law directed the Agriculture Department to strengthen its rules on fair play in marketing.

USDA said the proposed rule would:

require poultry integrators to give growers the opportunity to recoup 80 per cent of the cost of improvements that it demands in producers’ facilities.

give poultry growers the opportunity to opt out of arbitration so a dispute can be taken to court.

prohibit packers from buying or receiving livestock from other packers or communicating purchase prices to competitors.

Information about the proposed rule was available on the Internet at http://www.gipsa.usda.gov.

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