The so-called Farmer Fair Practices Rules, written by the US Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA), include two proposed regulations and an interim final rule, comments on which now are due by 24 March.

NPPC is most concerned with the latter, which would broaden the scope of the Packers and Stockyards Act (PSA) of 1921 on the use of “unfair, unjustly discriminatory or deceptive practices” and “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, pre-requisites for winning PSA cases.

“We’re very pleased that the Trump administration has extended the time we have to educate regulators about the devastating effects this rule would have on America’s pork producers,” said NPPC President John Weber, a pork producer from Dysart, Iowa. “The regulation likely would restrict the buying and selling of livestock, lead to consolidation of the livestock industry – putting farmers out of business – and increase consumer prices for meat.”

USDA in 2010 proposed a number of PSA provisions – collectively known as the GIPSA Rule – that Congress mandated in the 2008 Farm Bill; eliminating the need to prove a competitive injury to win a PSA lawsuit was not one of them. In fact, Congress rejected such a “no competitive injury” provision during debate on the Farm Bill. Additionally, eight federal appeals courts have held that harm to competition must be an element of a PSA case.

“Eliminating the need to prove injury to competition would prompt an explosion in PSA lawsuits by turning every contract dispute into a federal case subject to triple damages,” Mr Weber said. “The inevitable costs associated with that and the legal uncertainty it would create could lead to further vertical integration of our industry and drive packers to own more of their own hogs.

“That would reduce competition, stifle innovation and provide no benefits to anyone other than trial lawyers and activist groups that will use the rule to attack the livestock industry. And for those reasons, we’ll be asking the administration to withdraw the rule.”

An Informa Economics study found that the GIPSA Rule, including the interim final rule, would cost the US pork industry more than $420 million annually, with most of the costs related to PSA lawsuits brought under the “no competitive injury” provision.

The deadline for submitting public comments on the Farmer Fair Practices Rules was extended to 24 March from 21 February; the effective date of the interim final rule was pushed back to 22 April from 21 February.