By Grant Gerlock
Farmers from Alabama and Nebraska and the Organization for Competitive Markets, a non-profit that works on competition issues in agriculture, filed the
suit Thursday in the 8th U.S. Circuit Court of Appeals.
The “fair practice” rule addressed longstanding complaints from many beef, pork and poultry farmers who say meatpackers wield too much power over their businesses. Among other things, it said meat companies cannot break production contracts without notice, retroactively require costly investments in feeding facilities or block farmers from marketing their cattle or hogs.
The rule was withdrawn in October by Agriculture Secretary Sonny Perdue, who said the proposed changes would have caused too many lawsuits and that the market should determine competitive forces. The latter is an opinion shared by some groups representing livestock producers like the National Cattlemen’s Beef Association.
“My fear was it would just have been a windfall for litigators and lawyers who wanted to take these court cases and would’ve been very disruptive to the markets and disruptive to the fair competition among producers there,” Perdue said in November in Omaha, Nebraska.
The
suit claims the USDA must go ahead with the rule because it was requested by Congress in the 2008 farm bill. It also says the rule would have prevented frivolous lawsuits.
“The fact is it only will allow the farmer the right to have their grievance filed in court,” OCM executive director Joe Maxwell said. He added that current court precedent sets a high bar to prove meatpackers are abusing their power.
“It’s fruitless to bring a challenge because a farmer does not have the capacity to prove the actions that company did against their farm affected the entire marketplace of beef in the country, or pork,” he said.
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