GIPSA Proposal Would Harm Co-ops and a Competitive Marketplace, NCFC Says in Comments


Washington, DC (November 22, 2010)—The National Council of Farmer Cooperatives (NCFC) today filed comments with the Grain Inspection, Packers and Stockyards Administration (GIPSA) on proposed rule changes to the Packers and Stockyards Act. NCFC strongly objected to several provisions in the proposal which would harm farmer-owned livestock marketing co-ops and lead to a less competitive marketplace for producers.

One concern with the proposed rule is the requirement that would require that a dealer who operates as a “packer buyer” only purchase livestock for the packer that identifies the deal as its “packer buyer.” Since a packer will likely not be able to send an exclusive buyer to smaller sales, such as those that many livestock marketing co-ops hold, the result could actually be fewer buyers in the market. Producers will have even fewer options, with fewer buyers, the comments emphasize.

“Farmer co-ops, including ones that market livestock and own auction barns, are an essential element in ensuring that farmers and ranchers remain competitive and receive a fair price for what they produce,” said Chuck Conner, president and CEO of NCFC. “This proposal would hurt livestock co-ops, and will have a direct, negative impact on the bottom lines of the co-op’s farmer-owners.”

Other provisions identified as problematic by NCFC include competitive injury provisions, a provision that would require public filing of private contracts, and a provision that would enact a blanket prohibition against packer-to-packer sales.

“While meant to increase competition, the proposal from GIPSA would perversely lead to fewer options for livestock producers to market their product and increase concentration in the sector,” Conner continued. “It is our hope that GIPSA takes our comments, those of producer organizations, and the available economic analysis of likely impacts into consideration and extensively revise their proposal.”

About NCFC

Since 1929, NCFC has been the voice of America’s farmer cooperatives.  Our members are regional and national farmer cooperatives, which are in turn composed of nearly 3,000 local farmer cooperatives across the country.  NCFC members also include 26 state and regional councils of cooperatives.  Farmer cooperatives allow individual farmers the ability to own and lead organizations that are essential for continued competitiveness in both the domestic and international markets.

America’s farmer-owned cooperatives provide a comprehensive array of services for their members.  These diverse organizations handle, process and market virtually every type of agricultural commodity.  They also provide farmers with access to infrastructure necessary to manufacture, distribute and sell a variety of farm inputs.  Additionally, they provide credit and related financial services, including export financing.

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