By a vote of  217-203, the U.S. House of Representatives Thursday passed legislation that funds USDA and the Food and Drug Administration for fiscal 2012 but denies money for USDA to implement its Grain Inspection, Packers and Stockyards Administration, or GIPSA, rule. Proposed by USDA in 2010, the rule sets forth controversial regulations governing livestock and poultry marketing and production contracts. The budget will now head to the Senate for a vote.

“We’re grateful that the House has indicated it wants the USDA to take a time out on GIPSA,” said Doug Wolf, president, National Pork Producers Council, in a news conference following Thursday’s vote. “The vast majority of livestock and poultry producers oppose the GIPSA rule as it currently exists, which would cost them millions of dollars and lead to thousands of lost jobs.”

Officials of the National Pork Producers Council believe the proposed GIPSA rule goes well beyond the intent of Congress as stipulated in the 2008 Farm Bill. “As proposed, the GIPSA rule is bad for farmers and ranchers, bad for consumers and bad for rural America,” said Wolf.  NPPC wants to see the GIPSA rule stricken and for USDA to start over while paying close attention to the 2008 Farm Bill, which required the subject of livestock and poultry marketing be addressed.

Wolf says the rule as proposed would increase vertical integration within the pork industry, exactly the opposite of USDA’s intention. “Because the proposed GIPSA rule would limit the options on how producers sell their hogs, it would stifle innovation in the industry” said Wolf

House lawmakers also criticized USDA’s failure to conduct an in-depth economic impact study of the proposal before it was published.

The National Cattlemen’s Beef Association also expressed its gratitude to the House on the vote. “We are happy to see the House put their foot down and say enough is enough in this government overreach and messing in the private marketplace,” said Steve Foglesong, NCBA past president and Illinois cattleman. The GIPSA rule as proposed, would ruin what we have spent years and years trying to develop in our businesses and for U.S. consumers.”

Other agriculture groups also expressed gratitude for the House vote. “We commend the House for voting to rein in USDA’s GIPSA, which went far beyond its mandate from Congress in developing a rule on production and marketing of livestock and poultry,” said Mike Brown, president of the National Chicken Council. “We have consistently urged USDA to go back to the drawing board and produce a rule that responds to its instructions from Congress rather than trying to destroy the existing system as the proposed rule does. Now we hope that the U.S. Senate will see the wisdom in the House action and follow suit.”

The organizations consistently have criticized the proposed USDA regulation, pointing out that it would restrict marketing agreements between producers and processors, dictate the terms of production contracts, require additional paperwork, create legal uncertainty and limit producers’ ability to negotiate better prices for the animals they sell.

According to a study conducted by Informa Economics, the GIPSA rule would result in job losses of nearly 23,000, with an annual drop in gross domestic product by as much as $1.56 billion and a yearly loss in tax revenues of $359 million.

The study also found that the regulation would impose on the livestock and poultry industries “ongoing and indirect” costs – eventually borne by producers and consumers – of more than $1.64 billion, including nearly $880 million to the beef industry, more than $400 million to the pork industry and almost $362 million to the poultry industry.

Source: NPPC