Weekend Roundup: GIPSA Rules Whimper
The antitrust rule made final this week is a shadow of an earlier reform proposed by the Grain Inspection Packers and Stockyards Administration. The earlier (and much stronger) rule ran into heavy lobbying from the meat industry and opposition in Congress. The House cut off funds for enforcement of the original rule.
“I think it’s unfortunate that Congress chose to intervene in the process and prevent us from going further,” Secretary of Agriculture Tom Vilsack said in an interview with The Associated Press.
The final version of the rules allows farmers the right to opt out of mandatory arbitration clauses that were part of poultry-raising contracts. But, as the AP reports:
The scaled-back rule is a victory for the nation’s biggest meat companies, which rely on a steady stream of chickens, cattle and hogs to keep their factories running. In recent decades, meat companies developed tightly coordinated relationships with farmers and ranchers, buying most animals through secret contracts rather than the open market, giving companies more control over prices. The original USDA rule would have redrawn those relationships, tilting the balance of power back toward the farm.
The original rule would have made it easier for farmers and rancher to sue companies under the Packers and Stockyards Act of 1921 for monkeying with prices, underpaying farmers or other market manipulating behavior. The rejected rules would have banned a system used to pay poultry farmers that ranked farmers on how efficiently they raised their birds, rewarding top-ranked farmers and penalizing others.
Drovers has a list of what was left out of the final rules.
“Clearly, the USDA has bowed to the pressure of the meatpackers and their allies who do not want USDA to oversee the unfair trade practices that are going on in our industry,” said Bill Bullard, chief executive of R-CALF USA.
Clearly, Secretary Vilsack was not entirely pleased with the result. He told the AP he still worried about transparency and fairness in livestock markets.
“I’m paid to worry about that every day,” he said.
• The Countryside Alliance says efforts to bring broadband to rural Britain have stalled, the BBC reports.
The government announced four pilot areas for broadband extension more than a year ago. But the Alliance found that none of the local councils that were to lead these projects had yet started. None had received any money from the nation’s Treasury.
“It has been over a year since these pilots were set up and the people who live in areas with no or unreliable broadband coverage haven’t seen any improvement,” said Alice Barnard, chief executive of the Countryside Alliance.
“Unless more is done to simplify the process of acquiring and implementing rural broadband projects, the digital divide will continue to grow and the money pledged by the Coalition will remain all but worthless.”
• There have been some editorials since the federal government’s $209 million settlement with Alpha Natural Resources, the company that bought the Upper Big Branch Mine from Massey Energy. When Massey owned the mine in April 2010, it exploded and killed 29 coal miners.
The official federal report on the disaster found it to have been entirely preventable, had Massey obeyed the law.
Usually, coal mine disasters bring improvements in coal mine safety law. Not this time, however. That led the New York Times editorial page to write:
In the 20 months since the disaster, Congress’s glaring failure to pass mining reform has been shameful. Legislation proposed by Democrats to toughen investigations and make company officials accountable has been blocked by Big Coal’s lobbying of lawmakers. The way to end safety abuses in this dangerous industry is to make management face felony penalties for gross violations instead of allowing executives to pay fines with the company checkbook.
The Obama administration has toughened inspections by federal mine safety regulators. Massey’s corrupt behavior is a searing example of how federal regulation should never be subordinated to market forces.
• Republicans are itching for a fight with the President over the Keystone XL pipeline, Politico reports.
The Obama administration has stalled the pipeline, which was to carry oil sands oil from Canada across the Great Plains to the Gulf Coast. Keystone needed a permit from the State Department, but opposition from environmentalists and, particularly, from ranchers and Republican politicians in Nebraska, led to a delay.
Now, House Speaker John Boehner says he intends to combine a cut in the payroll tax that President Obama wants with a requirement that the administration okay Keystone. You can’t get one without the other. The President says he would “reject” any “effort to tie Keystone to the payroll tax cut.”
• Out in Pavillion, Wyoming, the federal EPA has found that gas drilling there has contaminated water supplies. Across the country in Dimock, Pennsylvania, however, a drilling company has stopped delivering water to 11 families that haven’t been able to use their wells since they were contaminated with methane. The state and the EPA say that the water in the wells is fine and that the company doesn’t need to make new deliveries.
Sue Heavenrich has been writing about this long-running story, and she checked in on the families this week. She finds that some volunteers are delivering water to the families. (See photo above.)
• A 74 acre tract of farmland in Sioux County, in northwest Iowa, sold for $20,000 an acre. Yes, that’s a record.