Starting this week after former Georgia Gov. Sonny Perdue is confirmed as Secretary of Agriculture, the National Pork Producers Council will begin a concerted effort to get the Trump administration to withdraw the Obama-era Farmer Fair Practices Rules related to the buying and selling of livestock. Written by the U.S. Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA), it includes two proposed regulations and an interim final rule, the latter of which now is set to become effective Oct. 19. A new proposed GIPSA rule will determine what USDA should do with the interim final rule; it has a 60-day period — from April 12 to June 12 — for the public to submit comments on whether the agency should: allow the interim final rule to become effective, suspend it indefinitely, delay its effective date or withdraw the regulation.
The interim final rule would broaden the scope of the Packers and Stockyards Act (PSA) of 1921 related to using “unfair, unjustly discriminatory or deceptive practices” and to giving “undue or unreasonable preferences or advantages.” Specifically, the regulation would deem such actions per se violations of federal law even if they didn’t harm competition or cause competitive injury, prerequisites for winning PSA cases. The federal appeals courts in eight of the circuits have held that harm to competition must be an element of a PSA case.
NPPC has argued that the interim final rule would prompt an explosion in PSA lawsuits by turning every contract dispute into a federal case subject to triple damages and that the inevitable costs associated with that legal uncertainty could lead to further vertical integration of the pork industry, driving packers to own more of their own hogs.