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USDA plan to axe livestock pricing rule divides meat producers

CHICAGO, Oct 17 (Reuters) - The U.S. Department of Agriculture (USDA) in a filing on Tuesday said it will dismantle Obama-era rules for buying and selling livestock, a move that has divided the U.S. meat industry.

U.S. Agriculture Secretary Sonny Perdue withdrew an interim final rule and a proposed regulation of the Farmer Fair Practices Rules under USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA).

The interim rule, proposed late last year by the administration of former President Barack Obama, would have made it easier for meat producers to file lawsuits against major processors if the farmers believed their operations had been harmed by potentially unfair or non-competitive business practices.

In its filing the USDA said it was withdrawing the proposal over "serious legal and policy concerns."

The rule had been scheduled to go into effect on Thursday.

While some of the biggest meat companies opposed the rule, smaller producers fought to keep the regulation in place. Some felt intimidated by the larger processors, who control large segments of the country's meat industry.

Tyson Foods Inc, the biggest U.S. meat company, said the proposal was overreaching.

Ken Maschhoff, an Illinois hog farmer and National Pork Producers Council president said: "We're very pleased that the secretary will withdraw these bad regulations, which would have had a devastating impact on America's pork producers.

"Eliminating the need to prove injury to competition would have prompted an explosion in lawsuits by turning every contract dispute into a federal case subject to triple damages," Maschhoff said.

National Cattlemen's Beef Association president for government affairs, Colin Woodall, called USDA's decision to terminate its final rule a victory for the country's cattle and beef producers.

"The proposed rule would have crippled cattle producers' ability to market their products through the value-added programs," said Woodall.

Conversely, Sally Lee, program director at Rural Advancement Foundation International-USA, said USDA chose to "side with 'Big Meat'" to the detriment of farmers.

"President (Donald) Trump pledged that he would take a stand for them, but is instead taking another step in the opposite direction by canceling the fair practice rule."

Bill Bullard, spokesman for U.S. cattle producers' group R-CALF USA, said Perdue has now deprived producers of legal protections while helping corporate meatpackers to gain control over the cattle supply chain.

"Secretary Perdue must not have received President Trump's memo about draining the swamp," in granting multinational meatpackers to "retaliate against cattle producers and engage in unfair and deceptive business practices with impunity." (Additional reporting by Tom Polansek in Chicago, editing by G Crosse)