[Federal Register Volume 73, Number 204 (Tuesday, October 21, 2008)]
[Rules and Regulations]
[Pages 62439-62440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-24945]



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 Rules and Regulations
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  Federal Register / Vol. 73, No. 204 / Tuesday, October 21, 2008 / 
Rules and Regulations  

[[Page 62439]]



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: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adding ``swine 
contractors'' to the list of regulated entities subject to specific 
regulations issued under the Packers and Stockyards Act (P&S Act or 
Act) (7 U.S.C. 181-229). In 2002, Congress added swine contractors as 
entities regulated under the P&S Act. Specifically, we are amending the 
regulations to clarify that swine contractors are prohibited from 
knowingly circulating misleading reports about market conditions or 
prices; that they are required to provide business information to 
authorized USDA personnel; and, that they are required to permit 
authorized USDA personnel to inspect their business records and 
facilities. We are also amending the regulations to clarify that agents 
and USDA employees are prohibited from unauthorized disclosure of 
business information obtained from swine contractors. These changes 
will assist swine contractors and swine production contract growers 
with determining which regulations under the P&S Act apply to swine 
contractors. The inclusion of swine contractors will help us better 
enforce the provisions of the P&S Act.

DATES: Effective Date: November 20, 2008.

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.

SUPPLEMENTARY INFORMATION: This final rule is issued under authority of 
the Packers and Stockyards Act, 1921, (P&S Act or Act) (7 U.S.C. 181-
229).
    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.

Comments

    We published a proposed rule in the Federal Register on February 8, 
2008 (73 FR 7482), seeking to amend four sections of the P&S Act 
regulations (9 CFR 201), specifically sections 201.53, 201.94, 201.95 
and 201.96, to add ``swine contractors'' to the list of entities 
subject to those regulations. The comment period for the proposed rule 
ended on April 8, 2008.
    We received one comment on the proposed rule from Mr. Bryan Black, 
President of the National Pork Producers Council (NPPC), located in 
Washington, DC. Mr. Black pointed out that although NPPC was opposed to 
the inclusion of swine contractors as covered parties under the P&S Act 
in the 2002 Farm Bill, NPPC agrees with GIPSA's position that 
regulations are needed to clarify the positions of swine contractors 
and contract growers as they relate to the Act. Mr. Black further 
stated that having a clear set of rules will help all parties by 
delineating responsibilities and limitations, and that the proposed 
rule appears to fairly represent the 2002 law.
    In his statement, however, Mr. Black urged USDA to define as 
clearly as possible those activities that violate the Act. He also 
recommended that any rules promulgated by USDA giving government agents 
access to business records and activities be made as narrow as possible 
and that access to records should be limited to those records and 
information that is specific to whatever claim is being investigated.
    In response to Mr. Black's concern regarding GIPSA's access to 
swine contractors' business records, we point out that Section 6 of the 
Federal Trade Commission Act (7 U.S.C. 222), gives us broad authority 
to gather and compile information for various purposes under the P&S 
Act. Those purposes include, but are not limited to, conducting 
investigations into the organization, business, conduct, practices, and 
management of entities subject to the P&S Act. While the rule will 
provide our investigators broad access to swine contractors' records, 
it will also protect the information that is gathered from unauthorized 
release, except under the limited circumstances listed in 9 CFR 201.96. 
We are therefore making no change to the final rule based on Mr. 
Black's comments.

Executive Order 12866 and Regulatory Flexibility Act

    The Office of Management and Budget designated this rule as not 
significant for the purposes of Executive Order 12866.
    We determined that this 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 rule will affect 
swine contractors. However, most of these entities are either 
slaughterers or processors of swine with more than 500 employees or 
producers with more than $750,000 in annual sales. Therefore, they do 
not meet the applicable size standards for small entities in the Small 
Business Act (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

[[Page 62440]]

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 a final regulatory flexibility analysis because 
this rule will not have a significant economic impact on a substantial 
number of small entities. We do expect that small swine production 
contract growers will benefit indirectly from the proposed amendments, 
which should provide fairness in the marketing of swine and swine 
products.

Executive Order 12988

    This rule was reviewed under Executive Order 12988, Civil Justice 
Reform. We do not intend the rule to have retroactive effect. The 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 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.


0
For reasons set forth in the preamble, we amend 9 CFR part 201 as 
follows:

PART 201--REGULATIONS UNDER THE PACKERS AND STOCKYARDS ACT

0
1. Revise the authority citation for part 201 to read as follows:

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


0
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.
0
3. Revise Sec.  201.94 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 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.
0
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.
0
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.

Randall D. Jones,
Acting Administrator, Grain Inspection, Packers and Stockyards 
Administration.
[FR Doc. E8-24945 Filed 10-20-08; 8:45 am]
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