000782 USDA to Issue Rules to Protect ProducersJuly 31, 2000Washington - USDA is preparing new rules intended to protect the rights of farmers and ranchers in their dealings with livestock and poultry processors. Among other things, the regulations will require that processors disclose basic terms of contracts with producers. The rules, to be issued this fall, also would bar disclosure restrictions that prevent producers from getting financial and legal advice on contracts. “Our goal is to ensure there is fair competition in the marketplace and to help small farmers and ranchers compete more effectively,” Agriculture Secretary Dan Glickman said. “These new rules will help level the playing field by increasing the transparency of market transactions.” Glickman stopped short of acting on a petition filed almost four years ago by the Western Organization of Resource Councils to curb the buying powers of meatpackers. Glickman said he would hold a series of public meetings in September on the petition. The petition asked Glickman to prohibit meatpackers from owning cattle and from buying cattle under contract unless done so on the open market. Other new rules the department plans would: - Prohibit conditional purchases in which the purchase of animals from one seller is tied to the purchase of animals from another seller. - Require that packers specify why they pay different prices for cattle of similar quality. More and more farmers and livestock producers raise crops and animals under contract with large processors. Many producers say that contracting makes it easier to manage their financial risks, but critics of the practice say it threatens the independence of farmers and ranchers. Lynn Cornwell, president-elect of the National Cattlemen's Beef Association, said the proposed rules “could increase market transparency and lead to greater profitability by making more market information available to cattle producers.”
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