South Dakota producers speak out on withdrawn GIPSA rule

RAPID CITY, S.D. (KOTA TV) - The Grain Inspection, Packers and Stockyards Administration was established in 1921 to facilitate the marketing of meats, grains and other agriculture related products and promote fair trade and competitive trading practices to benefit the consumers and American agriculture.

The issue today, is that some of the rules are outdated, and Secretary of Ag, Sonny Perdue withdrew a crucial reform the day before it was supposed to take effect.

"Really with that GIPSA rule, it was modernizing the Packers and Stockyards act to deal with the level of concentration that exists in our marketplace today," said Silvia Christen of the South Dakota Stockgrowers Association.

When the original rule was written in 1921 there were three major companies controlling 50 percent of the Nation's beef. Today, 4 companies control more than 80 percent of the beef market.

"When you get too much concentration and the buyer is able to collude or discriminate against producers for our prices, it hurts our producers," said Christen, "The farming and ranching families in this state are the ones who drive our economy, and we need to be sure that they are getting a fair price. "

The current Packer and Stockyard Act says if a producer feels they have been harmed by a packer, they need to prove the packer has discriminated the entire industry and harmed competition across the country.

In public comment, those who opposed the fair-trade rule said the proposal would only increase litigation industry-wide.

"That rule would have just ensured a fair price and a fair marketplace, and that's all we were really asking for," said Christen, "I think a fair marketplace is capitalism at it's finest, and I think that is something that everyone in American can get on board with."

In an editorial on October 24, South Dakota Stockgrowers Association President Gary Deering said:
"Since 1921, real commodity prices have moved very little, and after taking inflation into account, producers’ profit margins are slimmer than ever. Across the board, agricultural producers are hurting, and the bleeding must stop."