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Anonymous
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March 10, 2006
Senators Begin Process of Reforming
Packers and Stockyards Administration
Billings, Mont. – During a U.S. Senate Agriculture Committee hearing on Thursday, a bipartisan group of six lawmakers charged that a U.S. Department of Agriculture (USDA) agency, the Grain Inspection, Packers and Stockyards Administration, or GIPSA, had – for almost a decade – consistently failed to enforce anti-competition laws and regulations, had demonstrated a long history of incompetence in conducting and completing investigations, and had perpetually endorsed and encouraged an attitude of indifference among its employees by ignoring auditors' recommendations for improvements in the oversight of the Packers and Stockyards (P&S) Act.
The P&S Act, established in 1921, was designed to ensure fair trade practices and competitive marketing conditions in livestock, meat and poultry markets, as well as to protect producers from packers' anti-competitive practices. In January, USDA's Office of Inspector General (OIG) issued yet another scathing report on GIPSA's mismanagement of its duties and concluded that significant improvements in management, planning and policy formulation were needed.
Sen. Tom Harkin, D-Iowa, has introduced legislation that would reorganize USDA to more aggressively pursue unfair, deceptive and anti-competitive market behavior. Passage of Harkin's bill will be critical, and R-CALF USA will push for its passage, especially if there is no significant progress from GIPSA in the next 90 days.
"Failures to protect livestock producers reach all levels of USDA," Harkin said. "For over five years, the Department essentially took no action against unfair market practices and high-level USDA officials let it happen. We need changes at USDA to better confront bad actors in livestock and poultry markets."
Committee Chairman Sen. Saxby Chambliss, R-Ga., said he was greatly concerned and disheartened with the message OIG's latest report sends to the American public, consumers, and participants in the livestock marketplace. He also said he could not emphasize enough his frustration and discomfort on behalf of U.S farmers and ranchers.
"It is totally unacceptable for our government to conduct business in this way, and I fully expect the Department of Agriculture to swiftly and honestly respond to actions in the marketplace that might signal anti-competitive behavior," Chambliss asserted. "Not doing so calls into question the ability of the Department to oversee the Packers and Stockyards Act generally and greatly threatens the confidence livestock market participants extend to the government."
"A handful of large packers are asserting control over the market causing a serious disadvantage to our family-run ranches," said Sen. Craig Thomas, R-Wyo., in advance of the hearing. "The fact that the meatpackers could be controlling prices makes me wonder if they're getting too big for their britches."
A similar sentiment was echoed by Sen. Ken Salazar, D-Colo., earlier this week when he spoke of his intentions for this hearing: "U.S. cattlemen deserve to have protection from anti-competitive practices and deserve to know that proper checks and balances are in place so they're protected against any type of discriminatory practice that may occur."
R-CALF USA agrees wholeheartedly that GIPSA urgently needs to be rehabilitated and revamped, and detailed plans and solutions to accomplish that feat are outlined in the organization's position paper titled "Competition in the U.S. Cattle and Beef Market," which can be accessed at www.r-calfusa.com under the "Competition Issues" link.
R-CALF USA Marketing Committee Chair Randy Stevenson noted that GIPSA has received more than $4 million to conduct a study – due late this year – that will involve both producers and meatpackers in the examination livestock market issues, with the hope that the end result provides market participants a clear look at modern-day market functions.
"During Thursday's hearing, we repeatedly heard agreement that legal specialists need to get involved in P&S investigations early in the process, and the same process should be applied to the investigative contract GIPSA has let out to examine the effect of captive supplies on the cash market," said Stevenson, an independent feedlot operator from Wyoming. "In other words, without legal specialists involved, that study will yield results just as hollow as everything GIPSA has delivered since 1997. Will those contracts just present results based on an academic standard, or will they use legal expertise to present results consistent with legal standards?"
In October, USDA appointed Texas cattleman James Link as the new GIPSA administrator and assigned Link the task of putting GIPSA's house back in order. Link acknowledged OIG's identification of four major areas of weakness in the P&S Program: 1) bad recordkeeping; 2) poor investigation management; 3) lack of policy vision and decision; and 4) lack of follow-through on the recommendations of earlier reviews. He said OIG had offered 10 recommendations that he has accepted all 10, and that he has established an aggressive schedule to implement them.
Link was given two assignments: 1) to report to the committee within 30 days findings on whether a high-ranking USDA official's promise in 2003 of a "top-to-bottom review" of GIPSA actually occurred; 2) to report to the committee, in 90 days, his progress in implementing OIG's recommendations for improvement. If his efforts are not successful, Chambliss told Link another hearing could be scheduled.
Repeatedly during the hearing, senators referred to Link as "the new sheriff in town," and R-CALF USA is looking forward to Link's leadership to correct the multitude of anti-competition issues that have existed for years within GIPSA.
"We'll support Link in his efforts to correct the dismal situation he inherited, but first and foremost, R-CALF offers its praise for the bipartisan effort of this team of Senators who recognized the longstanding problems at GIPSA and went to bat for accountability by demanding corrective follow-up by the agency," said R-CALF USA Director of Government Relations Jess Peterson. "R-CALF agrees that serious flaws exist at GIPSA and we will continue to strongly support passage of Senator Tom Harkin's legislation that would strengthen P&S and improve competition in livestock markets."
"We could even step up our support of that legislation by a notch or two if, after 90 days, we don't see much progress in Link's efforts to reform the agency," said Stevenson, in agreement. "GIPSA already has had two previous chances to get its act together, and since the agency hasn't done so yet, the time could be ripe for a structural change. I'm sure Mr. Link has good intentions, but perhaps, so he can actually succeed and accomplish these monumental tasks, there should indeed be a structural change at GIPSA."
Senators Begin Process of Reforming
Packers and Stockyards Administration
Billings, Mont. – During a U.S. Senate Agriculture Committee hearing on Thursday, a bipartisan group of six lawmakers charged that a U.S. Department of Agriculture (USDA) agency, the Grain Inspection, Packers and Stockyards Administration, or GIPSA, had – for almost a decade – consistently failed to enforce anti-competition laws and regulations, had demonstrated a long history of incompetence in conducting and completing investigations, and had perpetually endorsed and encouraged an attitude of indifference among its employees by ignoring auditors' recommendations for improvements in the oversight of the Packers and Stockyards (P&S) Act.
The P&S Act, established in 1921, was designed to ensure fair trade practices and competitive marketing conditions in livestock, meat and poultry markets, as well as to protect producers from packers' anti-competitive practices. In January, USDA's Office of Inspector General (OIG) issued yet another scathing report on GIPSA's mismanagement of its duties and concluded that significant improvements in management, planning and policy formulation were needed.
Sen. Tom Harkin, D-Iowa, has introduced legislation that would reorganize USDA to more aggressively pursue unfair, deceptive and anti-competitive market behavior. Passage of Harkin's bill will be critical, and R-CALF USA will push for its passage, especially if there is no significant progress from GIPSA in the next 90 days.
"Failures to protect livestock producers reach all levels of USDA," Harkin said. "For over five years, the Department essentially took no action against unfair market practices and high-level USDA officials let it happen. We need changes at USDA to better confront bad actors in livestock and poultry markets."
Committee Chairman Sen. Saxby Chambliss, R-Ga., said he was greatly concerned and disheartened with the message OIG's latest report sends to the American public, consumers, and participants in the livestock marketplace. He also said he could not emphasize enough his frustration and discomfort on behalf of U.S farmers and ranchers.
"It is totally unacceptable for our government to conduct business in this way, and I fully expect the Department of Agriculture to swiftly and honestly respond to actions in the marketplace that might signal anti-competitive behavior," Chambliss asserted. "Not doing so calls into question the ability of the Department to oversee the Packers and Stockyards Act generally and greatly threatens the confidence livestock market participants extend to the government."
"A handful of large packers are asserting control over the market causing a serious disadvantage to our family-run ranches," said Sen. Craig Thomas, R-Wyo., in advance of the hearing. "The fact that the meatpackers could be controlling prices makes me wonder if they're getting too big for their britches."
A similar sentiment was echoed by Sen. Ken Salazar, D-Colo., earlier this week when he spoke of his intentions for this hearing: "U.S. cattlemen deserve to have protection from anti-competitive practices and deserve to know that proper checks and balances are in place so they're protected against any type of discriminatory practice that may occur."
R-CALF USA agrees wholeheartedly that GIPSA urgently needs to be rehabilitated and revamped, and detailed plans and solutions to accomplish that feat are outlined in the organization's position paper titled "Competition in the U.S. Cattle and Beef Market," which can be accessed at www.r-calfusa.com under the "Competition Issues" link.
R-CALF USA Marketing Committee Chair Randy Stevenson noted that GIPSA has received more than $4 million to conduct a study – due late this year – that will involve both producers and meatpackers in the examination livestock market issues, with the hope that the end result provides market participants a clear look at modern-day market functions.
"During Thursday's hearing, we repeatedly heard agreement that legal specialists need to get involved in P&S investigations early in the process, and the same process should be applied to the investigative contract GIPSA has let out to examine the effect of captive supplies on the cash market," said Stevenson, an independent feedlot operator from Wyoming. "In other words, without legal specialists involved, that study will yield results just as hollow as everything GIPSA has delivered since 1997. Will those contracts just present results based on an academic standard, or will they use legal expertise to present results consistent with legal standards?"
In October, USDA appointed Texas cattleman James Link as the new GIPSA administrator and assigned Link the task of putting GIPSA's house back in order. Link acknowledged OIG's identification of four major areas of weakness in the P&S Program: 1) bad recordkeeping; 2) poor investigation management; 3) lack of policy vision and decision; and 4) lack of follow-through on the recommendations of earlier reviews. He said OIG had offered 10 recommendations that he has accepted all 10, and that he has established an aggressive schedule to implement them.
Link was given two assignments: 1) to report to the committee within 30 days findings on whether a high-ranking USDA official's promise in 2003 of a "top-to-bottom review" of GIPSA actually occurred; 2) to report to the committee, in 90 days, his progress in implementing OIG's recommendations for improvement. If his efforts are not successful, Chambliss told Link another hearing could be scheduled.
Repeatedly during the hearing, senators referred to Link as "the new sheriff in town," and R-CALF USA is looking forward to Link's leadership to correct the multitude of anti-competition issues that have existed for years within GIPSA.
"We'll support Link in his efforts to correct the dismal situation he inherited, but first and foremost, R-CALF offers its praise for the bipartisan effort of this team of Senators who recognized the longstanding problems at GIPSA and went to bat for accountability by demanding corrective follow-up by the agency," said R-CALF USA Director of Government Relations Jess Peterson. "R-CALF agrees that serious flaws exist at GIPSA and we will continue to strongly support passage of Senator Tom Harkin's legislation that would strengthen P&S and improve competition in livestock markets."
"We could even step up our support of that legislation by a notch or two if, after 90 days, we don't see much progress in Link's efforts to reform the agency," said Stevenson, in agreement. "GIPSA already has had two previous chances to get its act together, and since the agency hasn't done so yet, the time could be ripe for a structural change. I'm sure Mr. Link has good intentions, but perhaps, so he can actually succeed and accomplish these monumental tasks, there should indeed be a structural change at GIPSA."
