The story of the Farmer Fair Practices is not over. As with so many regulations, what died in one part of government might see endless life in litigation.
Late on Dec. 14, the Organization for Competitive Markets (OCM) announced it is suing the USDA. The suit was filed in the U.S. Court of Appeals for the Eighth Circuit.
OCM claims the withdrawal of three amendments to the Packer and Stockyards Act by the Grain Inspection, Packers and Stockyards Administration (GIPSA)—commonly called the Farmer Fair Practices, or the Scope Rules—was illegal. Specifically, the group asserts withdrawing the rules violated the 2008 Farm Bill.
“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,” said Joe Maxwell, OCM executive director, in the group’s announcement of the suit.
“In doing so, Secretary of Agriculture [Sonny] 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 rules started in 2010 as a notice of proposed rulemaking. Through a series of repeated comment periods, the rules were completed in late 2016. The effective date for implementation was Feb. 21, 2017.
On Feb. 7, 2017, as part of President Donald Trump’s regulatory freeze memorandum, GIPSA delayed implementation of the rules. This notice pushed the effective date back to April 22 with a renewed comment period. On April 12, another extension was announced with a comment period ending on June 12. Four alternatives to the rules were offered on this extension. On Oct. 18, the rules were withdrawn.
The suit argues that by withdrawing the rules, GIPSA ignored the tens of thousands of comments and violated requirements of the 2008 Farm Bill.
“Adoption of these rules was necessary, in part, to satisfy a statutory mandated in the 2008 Farm Bill that USDA ‘promulgate regulation with respect to the Packers and Stockyards Act … to establish criteria that the secretary [of agriculture] will consider in determining’ whether, [among other things], ‘an undue or unreasonable preference or advantage has occurred in violation of such Act,’” reads the suit.
“President Trump’s unlawful rollback of a years-long negotiated rule aimed at protecting local farmers and ranchers is indefensible,” said Anne Harkavy, executive director of Democracy Forward. The group is representing OCM pro bono.
“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.”
There were two primary arguments against the now-withdrawn rules. One was that the rules would invite excessive litigation. One of the rules loosening the standards by which unfair treatment of farmers by packers would be judged in court. The other was that the rules would prevent packers from paying quality-based premiums for fear of accusations that some producers were being unfairly favored.
The current lawsuit calls the withdrawals “arbitrary, capricious, and contrary to the PSA” and the 2008 Farm Bill. As such, the OCM requests the court “vacate the unlawful withdrawal orders and reinstate the Farmer Fair Practices Rules, or provide such other relief as the court deems appropriate.” — WLJ
