On Tuesday, the United States Department of Agriculture (USDA) announced that it was withdrawing the Farmer Fair Practice rules—or the Grain Inspection, Packers, and Stockyards Administration (“GIPSA”) rules, as they’re more commonly known—effectively saying, “Know what? Never mind.”
It was a devastating blow to contract farmers, who had been hoping to benefit from the protection the rules promised.
GIPSA was established in 1994 to promote fair and competitive trading practices. Had the rules gone into effect this week, they would’ve made it a little easier for poultry and livestock farmers to sue processors or meatpackers over unfair treatment by updating language in the Packers and Stockyards Act of 1921 to clarify a stance USDA and GIPSA have long held: that farmers shouldn’t have to prove “competitive injury” (that their buyers have done something to impact all farmers in their position, as a class) in order to pursue legal action.
Here’s the thing: The GIPSA rules probably wouldn’t have unseated the big meat and poultry companies. But they would have gone a long way towards giving farmers and ranchers some bargaining power with their customers, the multinational meat processors who control the highly consolidated marketplace. That’s especially true in the vertically integrated chicken industry, where “integrators” like Tyson and Perdue not only buy the chickens, but provide birds, feed, and vaccinations—everything but raise the birds themselves.
“They dictate everything. We have no control over anything,” says Rudy Howell, a Perdue grower in North Carolina. “The only recourse you had was to go to GIPSA—and they can’t do nothing because Congress, every year the farm bill came up they put a rider on it, and [didn’t] give the money to enforce the laws.”
Howell is talking about GIPSA’s long, painful incubation period, which has become a sore point for many farmers across the country. According to Joe Maxwell, executive director of the Organization for Competitive Markets, President Obama was elected, in part, by farmers and ranchers in agricultural states who believed his promise that his administration would take on corporate consolidation in agriculture.
Though the GIPSA rules were initially required in the 2008 Farm Bill, enaction was delayed year after year until the final days of the Obama administration. Signing the Farmer Fair Practices rule then became the responsibility of the Trump Administration, which delayed its decision until this week. For many farmers—especially those who supported the political rise of Donald Trump—the decision is a grievous disappointment.
“We had a lot of hope, with the election of President Trump, that these rules would be implemented,” Maxwell says. “Placing America first over multinational corporate interests seemed to be a commitment made by him during his campaign. I believe many in the rural community have been credited for electing the President, and a lot of that was based upon the belief that these rules would be put in place—that family farmers and ranchers would be put first.”
The USDA’s decision also affects two proposed rules—these are different from the interim final rule because they never got an official start date. One of those rules would’ve addressed unfair practices and undue preference. It would have outlawed some of the things contract farmers complain about—delayed payment, for instance, or inconsistencies in the way different farmers are treated. The rule would also have made it illegal for meat companies to wage economic retaliation against farmers who engage in advocacy.
The second of the two proposed rules would’ve set some boundaries to determine fairness in the tournament system”— which directly affects “quality of inputs” like chicks and feed supplied to farmers by companies like Perdue. If enacted, the rule would’ve established a list of criteria that define “fairness” in the tournaments.
Rudy Howell, a North Carolina chicken grower under contract with Perdue, says that GIPSA would have helped him make the case when Perdue didn’t uphold its end of the bargain. In the 24 years he’s been growing chickens, Howell says, the company has charged him for feed it did not in fact deliver, or miscounted the number of birds it shipped to him, or asked for expensive upgrades to the farm he felt weren’t necessary. Complaints like these are common, though poultry integrators frequently deny them—a conundrum we wrote about earlier this year, featuring a couple’s ongoing legal battle against their contractor, Tyson Foods.
Howell says he has heard the same excuses.
“When you say something to them about it, they say, ‘well we ain’t go no reason to screw over you,” he says. “And I’ll say, ‘I understand that. But your paperwork ain’t right.’” But because he’d have to prove competitive injury, Howell has no easy way to make his case that Perdue has sometimes given him an unfair shake on birds and feed.
Gary Staples, a Koch grower from Alabama, says he has no recourse when his contractor sends him unhealthy birds who can’t grow at a competitive rate.
“We don’t have any control over what kind of chickens, what kind of feed,” Staples says. “I know they can send you a good batch of chickens or a bad batch of chickens, and that’s their business. They should be able to. But what I’m saying is, if they know they’re sending this grower a bad batch of chickens, they ought to compensate that grower.”
For its part, the meat industry seems largely thrilled to have bought itself a little breathing room in the race to meet what it says it’s being squeezed by: consumer demand. The industry trade group North American Meat Institute (NIMA) on Tuesday said in a press release titled, “Meat Institute Welcomes USDA Rescission of GIPSA Rule,” that the rule would have “greatly limited marketing agreements that allow the industry to meet consumer demand for various animal handling and production requirements, such as organic, grass fed, raised without antibiotics and others, limiting the availability of these products for consumers.”
There’s a story you’ll undoubtedly read elsewhere that fits pretty neatly around news of this fresh rollback: President Trump campaigned by appealing to rural voters, then double-crossed them by favoring industry big-wigs. And in some ways, that’s exactly what happened. But in reality, Washington hasn’t had much success in addressing consolidation in the meat industry in recent years—regardless of who was in charge. A Clinton presidency may have seen a similar outcome.
Farmers and ranchers in rural communities stood up with Obama’s administration and elected him president,” Maxwell says. “And he did put in place at DOJ and USDA the five workshops”—these were workshops in 2010 that addressed competition issues in the poultry, dairy, and livestock industries—“and gave a large amount of hope to the people … he quickly retreated when Big Ag came in and said these rules were too much, and they were delayed for five years.”
It was Obama’s Secretary of Agriculture Tom Vilsack that put the watered-down GIPSA rules in place in December of 2016. Vilsack now works for the dairy industry as the president and CEO of the U.S. Dairy Export Council.
When writer Corby Kummer asked Michael Pollan about the meat industry for this magazine last year, Pollan was a little more generous with the Obama administration. “The most disheartening episode had to do with antitrust in agriculture,” he said. “Vilsack and Eric Holder did listening tours all over the Midwest, looking at meatpacking and how that was damaging ranchers and chicken farmers, and also concentration in the seed business. It looked like they were really going to do something about that, and then came 2010, the Tea Party moment, and the attack on Obama for being hostile to business.”
Pollan also pointed out that a Clinton administration may well have taken a pro-business approach to ag policy. “It’s important to remember that the Clintons’ first political patrons were Tyson Foods and Walmart. So their DNA on the food issue leaves a lot to be desired.”
One last thought: the rules themselves may prove totally irrelevant: Secretary of Agriculture Sonny Perdue’s plans for reorganizing USDA nests GIPSA under the Agriculture Marketing Service, a move advocacy groups argue will weaken the agency even further. “Two steps forward, one step back” only works if you’re doing the funky chicken.