Quiero saber acerca de...

lotter on DSK11XQN23PROD with PROPOSALS1

60780

Federal Register / Vol. 86, No. 211 / Thursday, November 4, 2021 / Proposed Rules
Some commenters expected the rule to make changes they would have considered more favorable to growers, such as the abolition of grower ranking systems. According to one commenter, a tournament system is itself an undue preference in any case where the farmers pay is penalized based on input factors that affect farmer performance beyond their control. Other commenters supported the proposed rule, but asked USDA to provide a codified list of behaviors that in and of themselves would be violations of the Act, including clear examples of actions that may be unfair, discriminatory, or deceptive; a non-exhaustive list of Section 202a violations; or provisions clarifying that failing to comply with 9
CFR 201.100 is inherently unfair, unjustly discriminatory, or a deceptive practice. Several commenters also recommended requiring live poultry dealers to disclose critical information regarding acquiring, handling, processing, and quality of poultry to all producers in the tournament if such information is disclosed to one.
Commenters suggested this type of information would allow growers to make better-informed decisions about entering into production contracts.
Many commenters, while supportive of the proposed rule generally, opposed inclusion of the criterion proposed 201.214d that would have allowed the Secretary of Agriculture to consider whether a live poultry dealer has demonstrated a legitimate business justification for use of a poultry grower ranking system that might otherwise be unfair, unjustly discriminatory, or deceptive; give an undue or unreasonable preference or advantage to any poultry grower; or subject any poultry grower to an undue or unreasonable prejudice or advantage.
Commenters asserted that this criterion could offer live poultry dealers a loophole through which they could justify actions that otherwise might be considered violations of the Act. These commenters recommended this criterion be eliminated from the proposed rule.
Several commenters further speculated that the vagueness of the term legitimate business justification could lead to increased litigation and expense as courts attempt to interpret its meaning, and further that every judge or jury could interpret the term differently.
One commenter wrote that the use of the legitimate business justification is a recognized monopoly defense that is unfounded and misplaced in the proposed rule. According to the commenter, Sections 202a and b of the Act were designed by Congress to address wrongful and unlawful acts
VerDate Sep<11>2014

16:19 Nov 03, 2021

Jkt 256001

not of the anti-trust variety. The commenter asserted the defense should not be included in the proposed rule because the term monopoly does not appear in Sections 202a and b of the Act, whereas Sections 202c through e clearly address anti-trust related unlawful practices. The commenter cited examples of unfair practices under the Act where proof of competitive injury is not required, such as failure to pay livestock sellers before the close of the next business day following livestock purchases see Sec.
409, or late payments to a poultry grower see Sec. 410. The commenter argued that the Secretary has no authority to effectively amend the Act by proposing to inject the monopoly defense into the regulations. According to the commenter, such inclusion exceeds the legal authority granted the Secretary under the Act, violates the separation of powers as established by the United States Constitution, defies Congressional intent, and practically guarantees litigation against the Secretary for violation of the Administrative Procedures Act. Further, the commenter claimed that use of the legitimate business justification defense would embolden poultry integrators to wrench away what few rights growers have left.
A number of poultry grower commenters opposed the December 2016 proposed rule entirely, some saying the rule is simply unnecessary.
Others asked that USDA not force changes on the poultry grower ranking system they claimed has worked well for decades. Commenters contended changing the system could eliminate growers incentive to maximize efficiency and adopt innovative production practices, and that such changes would unfairly reward mediocre performers who do not invest effort and capital into continuously improving production.
A number of commenters stated that proposed criteria were too vague, citing for example the terms fair manner in proposed 201.210b10, pattern or practice in the introductory paragraph of proposed 201.214, and sufficient business information and informed business decisions in proposed 201.214a. Commenters asked USDA
instead to identify specific behaviors that would be considered violations of the Act to eliminate confusion for contracting parties.
Comments from several poultry processors and associations representing poultry and other meat and food processing industries opposed the proposed rule for various economic and legal reasons. A number of commenters
PO 00000

Frm 00002

Fmt 4702

Sfmt 4702

said the rule ran afoul of Executive Order 13771 1 regarding regulatory reform in that GIPSAs impact analysis predicted administering and litigating the rule would be costly, although GIPSA did not quantify benefits of the rule. Some commenters speculated that actual costs of litigating the rule could be much higher than GIPSAs estimates because the inclusion of vague regulatory terminology would increase uncertainty for contracting parties and invite further litigation. Commenters asserted the proposed rule was unsound because it was premised on the fatally flawed interim final rule titled Scope of Sections 202a and b of the Packers and Stockyards Act 81 FR 92566, December 20, 2016 that was published by GIPSA on the same date as the proposed Poultry Grower Ranking Systems rule. Commenters claimed the Scope rule erroneously asserted that claimants do not need to demonstrate injury to competition to establish a violation of Sections 202a and b of the Act.
A number of commenters said the proposed rule was arbitrary and capricious in that GIPSA failed to provide investigative data or evidence of any actual problems with the current grower ranking systems or of any need for regulatory intervention, basing its proposed actions rather on anecdotal complaints.
A few commenters objected to GIPSAs use of an example in the rules preamble that processors might supply non-comparable inputs to growers.
Commenters pointed out that in the rules economic impact analysis GIPSA
stated it had no evidence processors have done this. Other commenters warned that USDA should not base the proposed criteria on the assumption that processors intentionally provide noncomparable inputs to growers. Those commenters explained it is in the best interest of processors that all their poultry growers receive high quality inputs animals, feed, veterinary medicines to ensure a reliable flow of high-quality poultry to plants. For that reason, according to these commenters, processors are unlikely to intentionally target and sabotage their growers, as suggested by other commenters.
Several commenters suggested that GIPSA incorrectly assumed in its impact analysis that growers carry most of the risk related to poultry production.
According to commenters, processors 1 Executive Order 13771Reducing Regulation and Controlling Regulatory Costs January 30, 2017has since been rescinded by Executive Order 13992Revocation of Certain Executive Orders Concerning Federal Regulation January 20, 2021.

E:FRFM04NOP1.SGM

04NOP1