Court Agrees with USDA in GIPSA Ruling

Brian German Agri-Business, Legislative

About a year after a petition was filed, the GIPSA ruling was finally issued by a U.S. District Court on December 21.   The ruling stated that the U.S. Department of Agriculture (USDA) “provided legitimate regulatory and substantive concerns” in withdrawing the Farmer Fair Practices Rules.   Those rules would have made significant changes to the requirements and oversight of the Grain Inspection, Packers and Stockyards Administration known as GIPSA.

GIPSA rulingThe rules were initially scheduled to take effect in February 2017 but were first delayed by USDA before being completely withdrawn later in the year.  The Organization for Competitive Markets (OCM) filed a petition of review in response to the withdrawal, calling the move “arbitrary and capricious.”  The petition claimed that by not enforcing the rules, USDA was in violation of a Congressional mandate requiring a rule to be in place.

There was some division among agricultural groups as to what the rule changes would accomplish.  Groups including the United States Cattlemen’s Association believed the interim final rule would have helped maintain competition in the marketplace.  However, the National Cattlemen’s Beef Association has claimed the rule would be detrimental to value-added programs and would encourage unnecessary litigation.

“Here, USDA explained that it was withdrawing the interim final rule and taking no further action on the proposed regulations because the proposed regulatory change of course would generate protracted litigation, adopt vague and ambiguous terms, and might prevent innovation and foster vertical integration that would hinder new market entrants,” the court stated in its opinion.

Aside from the recent GIPSA ruling, the USDA had previously announced its intention to eliminate GIPSA as a separate agency earlier in the year.  Secretary of Agriculture Sonny Perdue noted that consolidating the department into the work of the Agricultural Marketing Service would help to improve customer service and efficiency.

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Brian German

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Ag News Director, AgNet West