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USDA/AMS RIN: 0581-AE04 Publication ID: Fall 2024 
Title: Fair and Competitive Livestock and Poultry Markets (AMS-FTPP-21-0046) 
Abstract:

This action would revise regulations pertaining to the Packers and Stockyards Act (Act).  Revisions would clarify USDA’s position regarding section 202(a) of the Act, to protect producer welfare and advance fair-trade practices in the meat and poultry industries and affirming that proof of harm to competition is not necessary to find that certain conduct or actions violate that section.  Revisions would confirm that deceptive, unfair, unjust, undue, and unreasonable actions may be violations of the Act, regardless of whether there is harm or likely harm to competition. 

 
Agency: Department of Agriculture(USDA)  Priority: Other Significant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Final Rule Stage 
Major: No  Unfunded Mandates: No 
CFR Citation: 9 CFR 201   
Legal Authority: 7 U.S.C. 181 to 229c   
Legal Deadline:  None

Statement of Need:

Revisions to regulations pertaining to the Packers and Stockyards Act (Act) clarify the types of conduct by packers, swine contractors, or live poultry dealers that the Agricultural Marketing Service (AMS) considers unfair practices or undue preferences and a violation of sections 202(a) or 202(b) of the Act. 

Sections 202(a) and 202(b) of the P&S Act are broadly written to prohibit unjustly practices and undue preferences.  Industry members have complained that the regulations effectuating the Act are too vague and do not provide adequate clarity about the types of conduct or action that are likely to violate the Act.  This rule is needed to provide essential clarity about what would be considered violations of the Act.   

Revisions to regulations pertaining to the Packers and Stockyards Act (Act) that would also clarify the scope of the Act are needed to establish what conduct or action, depending on their nature and the circumstances, violate the Act without a finding of harm or likely harm to competition or as they may relate to harm or likely harm to competition as such terms were contemplated under the Act. Such revisions reflect the Department of Agriculture’s (USDA) longstanding position in this regard.

Summary of the Legal Basis:

The Packers and Stockyards Act (Act) authorizes AMS to determine if conduct within the poultry and livestock industries constitutes unfair practices or undue preferences and, therefore a violation of the Act.  

The Act provides USDA with the authority to assure fair competition and trade practices and to safeguard farmers against receiving less than the true market value of their livestock. Sections 202(c), (d), and (e) of the Act limit the application of those sections to acts or practices that have an adverse effect on competition, such as acts restraining commerce, creating a monopoly, or producing another type of antitrust injury. However, provisions in sections 202(a) and (b) restrict practices that are deceptive, unfair, unjust, undue, and unreasonable; terms that are understood to encompass more than anticompetitive conduct.  USDA’s position is that Congress did not intend application of sections 202(a) and (b) to be limited to instances in which there is harm to competition. 

Alternatives:

USDA considered taking no regulatory action. However, lack of clarity hinders the agency’s ability to consistently administer and enforce the Act .

Anticipated Costs and Benefits:

USDA estimate annual costs related to this rule of $9 million for the first five years, decreasing in subsequent years, for total ten-year costs of $66 million. We believe the primary benefit of the proposed regulation is the increased ability to protect producers and growers through enforcement of the Act for violations of section 202(a) and/or (b) that do not result in harm, or a likelihood of harm, to competition.

Risks:

Courts have recognized that the proper analysis of alleged violations of these two sections depends on the facts of each case. However, four courts of appeals have disagreed with USDA’s interpretation of the Act and have concluded that plaintiffs could not prove their claims under those sections without proving harm to competition or likely harm to competition.  There is a risk if future legal challenge of USDA interpretation of sections 202(c), (d), and (e) of the Act.

Timetable:
Action Date FR Cite
NPRM  06/28/2024  89 FR 53886   
Comment Period Extended  08/26/2024  89 FR 68376   
NPRM Comment Period End  09/11/2024 
Final Rule  01/00/2025 
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Federalism: No 
Included in the Regulatory Plan: Yes 
RIN Data Printed in the FR: No 
Agency Contact:
Michael V. Durando
Deputy Administrator, Fair Trade Practices Program
Department of Agriculture
Agricultural Marketing Service
1400 Independence Avenue SW,
Washington, DC 20250-0237
Phone:202 720-0219