[Federal Register Volume 73, Number 27 (Friday, February 8, 2008)]
[Proposed Rules]
[Pages 7482-7484]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-2376]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 73, No. 27 / Friday, February 8, 2008 / 
Proposed Rules  

[[Page 7482]]



DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

9 CFR Part 201

RIN 0580-AB01


Swine Contractors

AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION: Proposed rule.

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SUMMARY: We propose to add ``swine contractors'' to the list of 
regulated entities subject to specific regulations under the Packers 
and Stockyards Act (the P&S Act). In 2002, Congress added swine 
contractors as entities regulated under the P&S Act. The specific 
regulations we propose to amend prohibit regulated entities from 
circulating misleading reports about market conditions or prices. We 
also propose to amend regulations that address inspection of business 
records and facilities, information that regulated entities are 
required to share with the Secretary of Agriculture, and USDA's 
responsibility to refrain from unauthorized disclosure of that 
information. The goal of these regulations is to ensure fairness in the 
marketing of livestock, meat, and poultry. Adding swine contractors to 
specific regulations under the P&S Act will assist swine contractors 
and swine production contract growers with determining which 
regulations apply to them. Adding swine contractors to specific 
regulations will also make it easier for GIPSA to identify potential 
violations and to enforce the provisions of the P&S Act and 
regulations.

DATES: We will consider comments we receive by April 8, 2008.

ADDRESSES: We invite you to submit comments on this proposed rule. You 
may submit comments by any of the following methods:
     E-Mail: Send comments via electronic mail to 
[email protected].
     Mail: Send hardcopy written comments to Tess Butler, 
GIPSA, USDA, 1400 Independence Avenue, SW., Room 1643-S, Washington, DC 
20250-3604.
     Fax: Send comments by facsimile transmission to: (202) 
690-2173.
     Hand Delivery or Courier: Deliver comments to: Tess 
Butler, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1643-S, 
Washington, DC 20250-3604.
     Federal e-Rulemaking Portal: Go to http://www.regulation.gov. Follow the on-line instruction for submitting 
comments.
    Instructions: All comments should make reference to the date and 
page number of this issue of the Federal Register.
    Background Documents: Regulatory analyses and other documents 
relating to this action will be available for public inspection in Room 
1643-S, 1400 Independence Avenue, SW., Washington, DC 20250-3604 during 
regular business hours.
    Read Comments: All comments will be available for public inspection 
in the above office during regular business hours (7 CFR 1.27(b)). 
Please call the GIPSA Management Support Services staff at (202) 720-
7486 to arrange a public inspection of comments.

FOR FURTHER INFORMATION CONTACT: S. Brett Offutt, Director, Policy and 
Litigation Division, P&SP, GIPSA, 1400 Independence Ave., SW., 
Washington, DC 20250, (202) 720-7363, [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Grain Inspection, Packers and Stockyards Administration (GIPSA) 
enforces the Packers and Stockyards (P&S) Act of 1921 (the P&S Act). 
Under authority granted the Secretary of Agriculture (Secretary) and 
delegated to us, we are authorized (7 U.S.C. 228) to make those 
regulations necessary to carry out the provisions of the P&S Act.
    The Farm Security and Rural Investment Act of 2002 (Pub. L. 107-
171) amended the P&S Act to define and add ``swine contractors'' as a 
regulated entity. A swine contractor is defined as ``any person engaged 
in the business of obtaining swine under a swine production contract 
for the purpose of slaughtering the swine or selling the swine for 
slaughter, if (A) the swine is obtained by the person in commerce; or 
(B) the swine (including products from the swine) obtained by the 
person is sold or shipped in commerce.'' ((7 U.S.C. 182 (12))
    Adding swine contractors to specific regulations under the P&S Act 
will assist swine contractors and swine production contract growers 
with determining which regulations apply to them. It will also make it 
easier for GIPSA to identify potential violations and enforce the 
provisions of the P&S Act and regulations.

Description of Proposed Changes

    We now propose to amend the following regulations (9 CFR part 201) 
under the P&S Act to add the words ``swine contractors'' to the list of 
those subject to the regulations:
     Section 201.53 Persons subject to the Act not to circulate 
misleading reports about market conditions or prices.
     Section 201.94 Information as to business; furnishing of 
by packers, live poultry dealers, stockyard owners, market agencies, 
and dealers.
     Section 201.95 Inspection of business records and 
facilities.
     Section 201.96 Unauthorized disclosure of business 
information prohibited.
    The proposed modification to Sec.  201.53 would inform swine 
contractors that they are prohibited from knowingly making, issuing, or 
circulating false or misleading reports, records, or representations 
about market conditions, about prices, or about the sale of livestock, 
meat, or live poultry. The proposed modification to Sec.  201.94 would 
require swine contractors to furnish the Secretary or his duly 
authorized representatives, if requested by such representatives, with 
business information required in order to carry out provisions of the 
P&S Act and regulations in 9 CFR part 201. The proposed modification to 
Sec.  201.95 would require swine contractors to permit authorized 
representatives of the Secretary to enter their places of business to 
examine and copy business records, and to inspect facilities. The 
proposed modification to Sec.  201.96 would prohibit agents or 
employees of the United States from disclosing a swine contractor's 
business information without the consent of the swine contractor, 
except in the specific circumstances listed in Sec.  201.96.

[[Page 7483]]

Options Considered

    We considered not making these regulatory changes and continuing to 
protect the interests of swine producers indirectly through regulation 
of packers, dealers, and market agents. However, that option would not 
reflect the intent of Congress in amending the P&S Act to give the 
Secretary authority over swine contractors. We have the authority and 
the responsibility to directly regulate swine contractors. We could 
also take legal action against a swine contractor for alleged 
violations of the P&S Act without amending the regulations. However, 
that action would not clearly inform all swine contractors and swine 
production contract growers about the requirements that apply to swine 
contractors. Issuing the proposed regulations would make it clear to 
swine contractors and swine production contract growers which parts of 
the regulations apply to them, and would make it easier for GIPSA to 
identify potential violators and to enforce provisions of the P&S Act.

Effects on Regulated Entities

    If we implement these regulatory changes, swine contractors will 
have to open their business records and facilities to authorized 
representatives of GIPSA upon request. Some swine contractors may have 
to change their policies to allow access and to accommodate GIPSA 
representatives. We are not requiring that new information or records 
be kept by swine contractors, unless existing information or records 
are false or misleading about market conditions, prices, or sales of 
livestock, meat, or live poultry. This proposed rule would give swine 
contractors assurance that business information examined by GIPSA will 
be kept confidential, except under specific circumstances. Furthermore, 
swine production contract growers will be given increased assurance of 
fair treatment by swine contractors.

Executive Order 12866 and Regulatory Flexibility Act

    The Office of Management and Budget (OMB) has designated this rule 
as not significant for the purposes of Executive Order 12866.
    We have determined that this proposed rule will not have a 
significant economic impact on a substantial number of small entities 
as defined in the Regulatory Flexibility Act (5 U.S.C. 601, et seq.). 
The proposed rule will affect swine contractors. Most of these entities 
are slaughterers or processors of swine with more than 500 employees 
and do not meet the applicable size standards for small entities in the 
Small Business Administration Regulations (13 CFR 121.201). A 2007 
study of U.S. pork producers found that firms that market more than 
50,000 head of swine per year account for nearly all of contracted 
swine production in the U.S.
    In accordance with 5 U.S.C. 605 of the Regulatory Flexibility Act, 
we are not providing an initial regulatory flexibility analysis because 
this proposed rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities.
    Small swine production contract growers should benefit indirectly 
from the proposed amendments, which should provide fairness in the 
marketing of swine and swine products.
    We have considered the effects of this rulemaking action under the 
Regulatory Flexibility Act and we believe that it will not have a 
significant impact on a substantial number of small entities. We 
welcome comments on the cost of compliance with this rule, and 
particularly on the impact of this proposed rule on small entities. We 
also welcome comments on alternatives to the proposed rule that could 
achieve the same purpose with less cost or burden.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. These actions are not intended to have 
retroactive effect. This rule will not pre-empt state or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule. There are no administrative procedures that 
must be exhausted prior to any judicial challenge to the provisions of 
this rule.

Paperwork Reduction Act

    This proposed rule does not contain new or amended information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.). It does not involve collection of new or 
additional information by the federal government.

E-Government Act Compliance

    GIPSA is committed to complying with the E-Government Act, to 
promote the use of the internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

List of Subjects in 9 CFR Part 201

    Confidential business information, Reporting and recordkeeping 
requirements, Stockyards, Trade practices.
    For the reasons set forth in the preamble, we propose to amend 9 
CFR part 201 to read as follows:

PART 201--REGULATIONS UNDER THE PACKERS AND STOCKYARDS ACT

    1. The authority citation for part 201 is revised to read as 
follows:

    Authority: 7 U.S.C. 182, 222, and 228, and 7 CFR 2.22 and 2.81.

    2. Revise Sec.  201.53 to read as follows:


Sec.  201.53  Persons subject to the Act not to circulate misleading 
reports about market conditions or prices.

    No packer, swine contractor, live poultry dealer, stockyard owner, 
market agency, or dealer shall knowingly make, issue, or circulate any 
false or misleading reports, records, or representation concerning the 
market conditions or the prices or sale of any livestock, meat, or live 
poultry.
    3. Revise Sec.  201.94 to revise the heading and to read as 
follows:


Sec.  201.94  Information as to business; furnishing of by packers, 
swine contractors, live poultry dealers, stockyard owners, market 
agencies, and dealers.

    Each packer, swine contractor, live poultry dealer, stockyard 
owner, market agency, and dealer, upon proper request, shall give to 
the Secretary or his duly authorized representatives in writing or 
otherwise, and under oath or affirmation if requested by such 
representatives, any information concerning the business of the packer, 
swine contractor, live poultry dealer, stockyard owner, market agency, 
or dealer, or which may be required in order to carry out the 
provisions of the Act and regulations in this part within such 
reasonable time as may be specified in the request for such 
information.
    4. Revise Sec.  201.95 to read as follows:


Sec.  201.95  Inspection of business records and facilities.

    Each stockyard owner, market agency, dealer, packer, swine 
contractor, and live poultry dealer, upon proper request, shall permit 
authorized representatives of the Secretary to enter its place of 
business during normal business hours and to examine records pertaining 
to its business subject to the Act, to make copies thereof and to 
inspect the facilities of such persons subject to the Act. Reasonable 
accommodations shall be made available to authorized representatives of 
the Secretary by the stockyard owner, market agency, dealer, packer, 
swine contractor, or live poultry dealer for such examination of 
records and inspection of facilities.

[[Page 7484]]

    5. Revise Sec.  201.96 to read as follows:


Sec.  201.96  Unauthorized disclosure of business information 
prohibited.

    No agent or employee of the United States shall, without the 
consent of the stockyard owner, market agency, dealer, packer, swine 
contractor, or live poultry dealer concerned, divulge or make known in 
any manner, any facts or information regarding the business of such 
person acquired through any examination or inspection of the business 
or records of the stockyard owner, market agency, dealer, packer, swine 
contractor, or live poultry dealer, or through any information given by 
the stockyard owner, market agency, dealer, packer, swine contractor, 
or live poultry dealer pursuant to the Act and regulations, except to 
such other agents or employees of the United States as may be required 
to have such knowledge in the regular course of their official duties 
or except insofar as they may be directed by the Administrator or by a 
court of competent jurisdiction, or except as they may be otherwise 
required by law.

James E. Link,
Administrator, Grain Inspection, Packers and Stockyards Administration.
 [FR Doc. E8-2376 Filed 2-7-08; 8:45 am]
BILLING CODE 3410-KD-P