A new rule announced by the USDA tries to help protect livestock farmers, but the National Pork Producers Council claims it could end up hurting the livestock industry.
The USDA announced its Farmer Fair Practice rules under the Grain Inspection, Packers, and Stockyards Administration.
It targets what it calls harmful practices saying a farmer does not have to demonstrate that an unfair practice harms the entire market to prove a violation of the Packers and Stockyards act, which is intended to protect everyone in the industry.
Agriculture Secretary Tom Vilsack says American farmers want protection against unfair and deceptive practices. When it comes to market risks and concentration in the processor market, he points out the poultry industry saying four processors control 51 percent of the broiler or chicken market.
The rule was mandated in the 2008 farm bill. In 2010, the USDA heard from producers who were promised long term business by processors, but were bullied into narrower contracts.
The interim rule announced will go into effect in 60 days.
According to the National Pork Producers Council (NPPC), this will be a more than $420 million annual burden on the pork industry. Because it changes the liability on what's called injury to competition, they think that will provoke a bad reaction from swine buyers in the marketplace.
CEO of the NPPC, Neil Dierks says, "How do they limit their liability issues? And with that, one of the very reasonable things they might do from their perspective is rather than be in the marketplace to buy animals, they'll decide to raise more of their own animals. Thus driving vertical integration further in the industry and taking away opportunities for producers."
Dierks says producers can already bring injuries or problems they have through the court system.
He Adds the uncertainty of a new law like this will be bad for pork producers and people who work with pork producers to raise hogs.