NCC Praises USDA’s Withdrawal of Controversial ‘GIPSA Rules’ on Competitive Injury, Unfair Practices and Undue Preferences

October 17, 2017

WASHINGTON, D.C. – The U.S. Department of Agriculture (USDA) announced today it is withdrawing the Grain Inspection, Packers and Stockyards Administration’s (GIPSA) interim final rule on competitive injury, and its proposed rule on unfair practices and undue preferences.  After a 180-day extension of the comment period, the interim final rule was scheduled to go into effect on October 19.

“I want to thank Secretary Perdue for USDA’s thorough and meaningful review of these controversial rules that would have opened the floodgates to frivolous and costly litigation,” said NCC President Mike Brown.  “It is clear the administration took into account the thousands of comments it received and recognized these rules would have come with deep economic consequences for American poultry and livestock producers.” 

Eight different circuit courts of appeal have addressed a key issue underpinning the rules—the need to prove competitive injury to demonstrate a violation—and they have uniformly and resoundingly rejected the position advanced by GIPSA in these three rules.  Rather than acquiesce in these decisions, however, the Obama administration sought to misuse the rulemaking process to achieve what GIPSA has not won in court.

“We are also pleased that USDA decided not to issue a final rule on the performance based poultry grower ranking system, a system where more efficient farmers are paid premiums based on their performance.” Brown added.  “Rather, the department will continue to study this and we look forward to continuing to work with USDA to help explain the merits of a system that has benefited farmers, chicken processors and consumers for seven decades.” 

Brown also stressed that today’s livestock and poultry contracting and marketing practices are already and remain regulated by GIPSA, which administers and enforces the Packers and Stockyards Act to protect farmers, ranchers and consumers, and farmers already benefit from the protections of the Act.

In comments filed on March 24 and subsequently on June 12, NCC explained in great detail the numerous reasons why the agency’s interim final rule and proposed rules were ill-advised, would inflict billions of dollars of economic harm to American agriculture, exceed GIPSA’s statutory authority, and represent an arbitrary and capricious abuse of federal regulatory authority.

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