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USDA sued over GIPSA rule withdrawalUSDA sued over GIPSA rule withdrawal

Organization for Competitive Markets files lawsuit against USDA asking court to vacate withdrawal orders and reinstate Farmer Fair Practices Rule.

Jacqui Fatka

December 14, 2017

2 Min Read
USDA sued over GIPSA rule withdrawal
Credit: buhanovskiy/iStock/Thinkstock.

On behalf of the Organization for Competitive Markets (OCM) and independent farmers from Alabama and Nebraska, Democracy Forward challenged the U.S. Department of Agriculture for rolling back the Farmer Fair Practices Rule, otherwise known as the "GIPSA rules." The petition asks the court to vacate the withdrawal orders and reinstate the rules.

In October, USDA's Grain Inspection, Packers & Stockyards Administration (GIPSA) withdrew the Farmer Fair Practices Rule, which would have allowed farmers to hold agribusinesses accountable for practices like retaliation, bad-faith cancellation of contracts or collusion efforts to force farmers out of the market. “Despite the long history of such abuses in the poultry and livestock industry, USDA halted the rule, making it effectively impossible for farmers to bring unfair practices claims,” OCM said in a statement.

The court filing explained that, according to Secretary of Agriculture Sonny Perdue, predatory business practices are “moral actions” that “regulation and litigation” do not “actually solve.” OCM also stated that USDA insisted that the rules must be withdrawn because they conflict with the decisions of courts in four circuits.

The plaintiffs concluded that the withdrawals are “arbitrary, capricious and contrary to" the Packers & Stockyards Act and that, by “withdrawing the Farmer Fair Practices Rule without replacing them, USDA has unlawfully withheld agency action under the 2008 farm bill in violation."

Related:USDA withdraws GIPSA rule

Joe Maxwell, executive director of OCM, said, "The Trump Administration has eliminated rules designed to level the playing field for family farms and has instead given large multinational corporations the upper hand. In doing so, Secretary of Agriculture Perdue and the Administration have thrown America's farmers to the wolves, telling them that their family businesses don't matter. We called on the President to reverse Secretary Perdue's actions, and he has failed to right this wrong, so we are seeking justice through the courts."

The Farmer Fair Practices Rule was the result of a multiyear process based on thousands of comments from the public, including independent farmers and ranchers, to help ensure fairness in the production of food in this country, OCM added.

However, there was widespread concern from major livestock groups over the scope of the rule and the impact it could have on current marketing arrangements.

"President Trump's unlawful rollback of a years-long negotiated rule aimed at protecting local farmers and ranchers is indefensible," Democracy Forward executive director Anne Harkavy said. "We know from decades of evidence that massive agribusiness companies don't hesitate to use their power to abuse these farmers, and the Farmer Fair Practices Rule was a crucial step to restoring fairness in the market. It should be restored either by USDA or by the court."

OCM is being represented on a pro bono basis by the Democracy Forward Foundation. The suit, which is in the form of a petition for review, was filed in the U.S. Court of Appeals for the Eighth Circuit.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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