Lawsuit challenges cancellation of farmer fair practice rule

Farmers in Alabama and Nebraska joined with a Nebraska-based fair trade group Thursday to sue the U.S. Department of Agriculture over the agency's cancellation of an Obama-era plan that would have made it easier for farmers to demand better treatment when they contract with meatpacking companies.

The lawsuit seeks to reverse the USDA's October decision to vacate the Farmer Fair Practices Rule — regulations that would have, among other things, reduced the burden of proof farmers face to sue over contracts and practices they believe are unfair, discriminatory or deceptive.

"We know from decades of evidence that massive agribusiness companies don't hesitate to use their power to abuse these farmers, and the Farmer Fair Practices Rule was a crucial step to restoring fairness in the market," said Anne Harkavy, executive director of nonprofit legal group Democracy Forward, which filed the lawsuit on behalf of Lincoln, Nebraska-based Organization for Competitive Markets; Nebraska farmer James Dinklage; and Alabama farm couple Jonathan and Connie Buttram. "It should be restored either by USDA, or by the court."

USDA spokesman Jake Wilkins declined to comment, saying the agency doesn't discuss pending litigation.

The rules were first proposed by the USDA in 2010 but were not released until last December in the final days of President Barack Obama's administration. They were scheduled to take effect on April 22, but President Donald Trump's administration delayed them for six months before the USDA announced in October that it would not implement them.

The suit, filed in the 8th U.S. Circuit Court of Appeals, alleges Agriculture Secretary Sonny Perdue ignored thousands of comments in public hearings and submitted in writing and unlawfully sidestepped directives in the 2008 Farm Bill mandating some of the rules be enacted.

Trade groups for the meatpacking industry, including the National Chicken Council and the National Pork Producers Council, had complained that the rules would lead to costly lawsuits and would reduce competition.

Some companies, such as Tyson Foods and Pilgrim's Pride, require chicken and pork producers to enter into contracts that farmers say set their compensation at unprofitably low levels and force them deeply into debt.

Several court rulings have interpreted federal law as saying a farmer must prove a company's actions harm competition in the entire industry before a lawsuit can move forward. The rules would have eased that high burden of proof.

The elimination of the rules has helped large multinational corporations get the upper hand on farmers, said Joe Maxwell, a Missouri hog farmer and executive director of the Organization for Competitive Markets, a nonprofit think tank focused on antitrust, trade policy and competitive markets.

"In doing so, Secretary of Agriculture Perdue and the administration have thrown America's farmers to the wolves, telling them that their family businesses don't matter," Maxwell said.

Named in the lawsuit are the USDA, Perdue and the U.S. government.