P.O. Box 6486
Lincoln, NE 68506
Web site: www.competitivemarkets.com
Date: April 5, 2002 For Immediate Release
Contact: Fred Stokes: 662.476.5568
Michael C. Stumo: 860.379.6199
OCM Disappointed with Appointment of New USDA-GIPSA Administrator
OCM expressed disappointment today with the naming of Donna Reifschneider as the new administrator of USDA’s Grain Inspection, Packers & Stockyards Administration (GIPSA). Secretary of Agriculture Ann Veneman announced the appointment last Tuesday, April 2, 2002. GIPSA is charged with enforcing the Packers & Stockyards Act which regulates the trade practices of the meat packing industry. The basis for OCM’s disappointment is that Reifschneider is not qualified to improve GIPSA’s enforcement and regulatory professionalism and effectiveness or to address the problems identified by past government studies.
“OCM and other farm and rural groups were hoping that Secretary Veneman would appoint a strong and experienced leader to lead GIPSA,” said Fred Stokes, OCM president. “As the industry has consolidated and farm gate prices have fallen, it is more important than ever for the USDA to increase the quality of its enforcement ability. I am not aware of any qualifications that Reifschneider has that would assist in that effort.”
Reifschneider is described as a hog producer from Illinois who served as president of the National Pork Producer’s Council (NPPC) in 1999 and, more recently, on the board of the Meat Export Federation. Reifschneider does not appear to have legal experience in antitrust and competition policy or in major investigations.
“The General Accounting Office and the USDA Office of Inspector General have issued reports in recent years documenting the investigatory and enforcement deficiencies of GIPSA with regard to the Packers & Stockyards Act,” said Michael Stumo, OCM general counsel. “To date, GIPSA has failed to implement the recommended changes fully and has failed to issue the regulations necessary to regain competition in the modern meat industry. Unfortunately, the appointment of Reifschneider could very well be a step backward in GIPSA’s professionalism.”
GIPSA is currently suffering from a high employee turnover rate, an inability to bring successful enforcement actions in cases where USDA deems certain packer conduct as anticompetitive, and a lack of will to implement regulations mandated by Congress. Further, GIPSA has not attempted to propound regulations to respond to the competitive problems inherent in the structure of the modern meat industry.
Reifschneider’s record indicates that she has never called for an investigation of the industry under the Packers & Stockyards Act despite presiding over the National Pork Producers Council during the Winter of 1998 when pork prices (adjusted for inflation) were the lowest in history. In 1998 and 1999, the low prices caused a tremendous number of producers to exit the industry.
“Reifschneider testified before the U.S. Senate on January 26, 1999 as prices were beginning to recover from the eight cent per pound low in 1998,” said Stumo. “If she was ever to call for a full investigation of meat packer practices or the relationship between industry structure and price manipulation, that was the time. Reifschneider even admitted that increased hog production did not adequately explain the drop in prices. Yet she failed to demand that USDA investigate the industry or the causes of the market crash. There is little hope that she will rally to the side of the independent producer, rather than the meat packers, as head of GIPSA. I hope I am wrong.”
The Organization for Competitive Markets is a multidisciplinary, nonprofit group of farmers, ranchers, academics, attorneys, and policy makers dedicated to reclaiming the agricultural marketplace for independent farmers, ranchers and rural communities.
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