USDA Sends GIPSA Rule to OMB for Review

via a special arrangement with Informa Economics, Inc.

Pending review, provisions to be published in Federal Register in coming weeks

USDA has sent modified sections of the June 22, 2010 proposed GIPSA rule as a Final and an Interim Rule to the Office of Management and Budget for review. Pending review, these provisions will be published in the Federal Register in the coming weeks, according to a USDA contact.

Decisions about what to include in these rules and how to modify the contents have been guided by the comments received and the updated cost benefit analysis, USDA said. The Final Rule contains provisions required by the 2008 Farm Bill (the sections related to suspension of delivery of birds, additional capital investment criteria, breach of contract and arbitration) in addition to a section on swine and poultry sample contracts.

There will also be a separate Interim Rule, which contains a modified version of the section on poultry tournament systems and would be open to additional public comment. USDA will say its estimates show that these two rules combined have a cost of less than $100 million.

There are several provisions from the original proposal that USDA is no longer pursuing, including the section on packer-to-packer sales and packer buyers and the records retention section. The remaining provisions from the June 22, 2010 proposed rule remain under consideration.

Industry sources said there are still some concerns within the meat industry that the provisions on competitive injury may still be brought forward at some time.

There will reportedly be an industry briefing by USDA today on the rule.

Perspective: It will be important to see whether the words "competitive injury," "unfair" and "undue preference" are included in the rule and if so, how they are defined. Initial indications are they are not included. If so, observers said that would be an initial victory for industry lobbyists pressing hard on this issue. However, others note that USDA could follow up later with another rule on this topic. Meanwhile, the interim rule language which contains a modified version of the section on poultry tournament systems, some contacts said, shows USDA has a bull's eye on the poultry industry.