Here is a summary of provisions that will not be included in USDA’s final GISPA rule, published on Dec. 8, 2011. A full review of the final rule is available here.
Value-Added Production and Premiums
The proposed rule included several provisions related to the potential use of price premiums and related contracts such as marketing agreements in a manner that are potential PSA violations. However, comments identified numerous concerns raised by the proposed regulations related to price premiums and defining certain production arrangements. Specifically, many felt that, taken together, the proposed regulations would increase litigation thereby jeopardizing the continued use of these agreements. The rapid growth of value-added segments of the livestock industry based on alternative marketing agreements (such as breed certifications, source verification, production certification) has been beneficial for many producers and supported by consumer demand. “GIPSA did not intend to limit the use of such arrangements and we determined this final rule would not include sections relating to price premiums and marketing agreements.,” USDA said.
Section 201.94(b) of the proposed rule that would have required packers, swine contractors and live poultry dealers to retain records justifying differential pricing decisions is not included in this final rule. As with sections related to price premiums, many comments suggested this requirement would contribute to a potential unintended consequence of ending or reducing the practice of offering price premiums, often related to quality. Many comments indicated this would have required creating new records, USDA noted that was on the intention. “While this final rule does not contain the proposed changes regarding recordkeeping, it does not change the existing recordkeeping requirements,” USDA said. “We expect covered entities to continue to comply with the existing requirements of 7 U.S.C. 221.”
Packer-to-Packer Sales and Relationships with Dealers
Section 201.212 related to packer-to-packer sales and packer relationships with dealers will not be finalized. Although some comments supported including these provisions, many raised serious concerns about potential adverse effects on the marketplace, such as encouraging further vertical integration and reducing the number of dealers and buyers. “While this section will not be finalized, we expect covered packers and dealers to continue to comply with the related portions of the Act (7 U.S.C. 192 c-g) and existing regulations (9 CFR 201.69-70),” USDA said.