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USDA official promises tough, fair enforcement of Packers and Stockyards Act

J. Dudley Butler, a Mississippi lawyer tapped by the Obama administration to run USDA's Grain Inspection, Packers and Stockyards Administration, Friday promised an active approach to enforcing a 1921 law intended to prevent unfair price discrimination when packers buy livestock from producers.

The 2008 farm bill mandates that GIPSA write rules to clarify enforcement of the law, which critics as prominent at Senator Chuck Grassley (R-IA) say has not been carried out vigorously under both Democratic and Republican administrations.

"I came to Washington to work, that's what I'm going to do and I am going to enforce the Packers and Stockyards Act," Butler said while speaking to the Organization for Competitive Markets at their annual meeting in St. Louis.

The 10-year-old group has had tough setbacks in its efforts to increase competition among meat packers. It offered support to a class action suit, Picket V. Tyson Fresh Meats, Inc, that alleged unfair pricing practices in paying cattle feeders. A Federal appeals court overturned a Jury verdict in favor of the feeders, arguing that they couldn't prove economic harm to society. Butler was applauded when he said he disagreed with that reasoning.

"We want to be able to protect one farmer, 10 farmers or 100 farmers," he said. "But if you've got one man that's been mistreated how can you prove that it had an adverse effect on the economy?" Although the Act has some similarities to antitrust laws, it's not the same and is meant to remedy unfair practices, he said.

Yet Butler provided no details on new Packers and Stockyards Act rules that the 2008 farm bill mandates. He said a draft of the rules will be published this fall to seek comments from the public.

"They're going to be broad. They're going to cover every segment of the industry. I can't say I'm going to make everybody happy and I can't say I'm going to make everybody mad," he said.

"I truly believe that if you're going to regulate, authority has to be tempered with, as my dad used to say, common horse sense," he said.

"We know that we have an imbalance of power in some industries," he added.

On the issue of vertical integration in the livestock industry, he compared it to a western movie scene of stampeding cattle. "It's kind of like the stampeding herd. It's headed toward the cliff. And the cowboys jump on their horses and they try to turn the herd. Well we can't turn the herd on poultry so we have to look at that from the standpoint of dealing what we have to deal with."

"The hog industry is getting closer to the cliff, but I still think we can turn the herd," he added.

He said the new rules will be designed to fit different parts of the livestock industry. "One size fits all does not work when you're writing regs."

He also encouraged livestock producers and others to write comments on the new rules, not only because it informs GIPSA, but also because USDA can use that information to justify its rules if someone sues to strike them down. That's why comments "are probably the most important thing you can do," he said.

J. Dudley Butler, a Mississippi lawyer tapped by the Obama administration to run USDA's Grain Inspection, Packers and Stockyards Administration, Friday promised an active approach to enforcing a 1921 law intended to prevent unfair price discrimination when packers buy livestock from producers.

When Butler took questions from the audience, Becky Ceartas, head of contract agriculture reform for the Rural Advancement Foundation International in Pittsboro, North Carolina, asked if producers can send comments anonymously, Butler said yes. "I understand the concept of retaliation," he said.

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