Representative Sam Graves, R-Mo., says USDA's proposed GIPSA rule could significantly alter livestock marketing practices and further inject government into the marketing and business decisions of small businesses. Graves says many of the proposed provisions will severely undermine the ability of small businesses to differentiate their products from those of their larger competitors - and it will mean less competition for livestock producers, packers and consumers. Graves adds the proposed rule may also force changes to a company's asset structure and lead to more vertical integration.
The rule was prompted by the 2008 Farm Bill, but according to Graves what was proposed by USDA went far beyond the intent of Congress. If implemented, he says the rule would hurt the beef, pork and poultry industries and further damage the country's already unstable economy. Independent studies have shown the rule will reduce the gross domestic product by over $1.5 billion and cost the U.S. economy nearly 23,000 jobs.
Graves, who is Chairman of the House Small Business Committee, has joined Agriculture, Energy and Trade Subcommittee Chairman Scott Tipton, R-Colo., in sending a letter to Ag Secretary Tom Vilsack calling on the agency to fully comply with the Regulatory Flexibility Act and ensure that USDA understands the private sector costs of the regulations it is imposing on all sectors within the livestock industry. The letter also requests that USDA publish their analysis for comment to ensure small firms can inform the agency about its effect on their businesses.
"What is most baffling is that the USDA recognizes that a majority of people involved in the livestock industry are small businesses, yet they still failed to fully evaluate the proposed rules effect on small companies" Graves said. "Small businesses are the lifeblood of our economy and the catalyst that will lead our economy back to prosperity. Instituting rules and regulations without investigating the effects on our most robust job creators is reckless and completely misguided."