HARKIN AND GRASSLEY RELEASE GAO REPORT ON LIVESTOCK MANDATORY PRICE REPORTING
GAO confirms problems with
price accuracy and transparency in USDA price reports
WASHINGTON
, D.C.
-- Senators Tom Harkin (D-IA) and Chuck Grassley (R-IA) today released a Government Accountability Office (GAO) report on the Livestock Mandatory Price Reporting (LMPR) program confirming the need for legislative reforms that would require USDA to improve the operation of LMPR. GAO found that many meat packers did not report data to USDA correctly and that in some instances packers failed to file price reports altogether. Such gaps in reporting can affect the accuracy of price reports provided to livestock producers and result in incorrect market information for buyers and sellers of livestock. Grassley and Harkin will now work with the House to implement the suggestions made in the report and address other livestock producer concerns.
“I requested this report because producers are concerned USDA is not doing enough to make sure price reports are accurate and timely,” Harkin said. “GAO found that many times these price reports are inaccurate and that USDA is not letting the public know when it finds late or incorrect information.”
“The Government Accountability Office report shows that we had some serious flaws in the Mandatory Price Reporting law that needed to be changed,” Grassley said. “I hope now we can take these suggestions and make improvements to the law that will ensure family farmers get a fair price.”
The Livestock Mandatory Price Reporting Act requires packers, processors, and importers to provide critical price, contracting, supply and demand information to USDA, which uses the information to create price reports for livestock producers.
The Senate unanimously passed legislation introduced by Grassley and Harkin in September extending the Livestock Price Reporting Act for one year in order to allow producers and other interested parties to review the GAO report before extending the law for a longer period. Because the House of Representatives did not take up this one-year extension bill for consideration, the Livestock Mandatory Price Reporting program expired on September 30. Instead, the House passed a five-year extension, but the Senate has been unwilling to pass the longer-term extension until the problems in the price reporting system identified and investigated by GAO are adequately addressed. The program has been operating as a voluntary program since that time.
The report revealed the following:
* GAO observed lengthy lag times by USDA in correcting problems when packers failed to report or provided incorrect information. GAO evaluated 844 audits and found that packers incorrectly reported or failed to report required information 64 percent of the time. On many of these audits it showed that USDA, on average, was taking roughly 85 days to ensure a packer made needed corrections to the information.
* Coordination between the Agricultural Marketing Service (AMS) and the Grain Inspection, and Packers and Stockyards Administration (GIPSA) has been limited, hindering GIPSA’s ability to monitor and correct trends of anti-competitive behavior that could negatively affect price reports. This is in part due to the lack of legal authority for GIPSA to review company specific information. GIPSA is better equipped to review longstanding patterns of anti-competitive behavior whereas AMS’ goal is primarily to ensure price information is collected and quickly turned around for daily and weekly price reports.
* USDA has been adjusting or excluding packer data but not making this practice known to livestock producers and the public.
* Since the enactment of the reporting program in 1999, USDA has yet to collect any penalties from packers for violations of program requirements even in cases of longstanding violations.
* Packers are not consistently and reliably reporting data to USDA within deadlines specified by the LMPR Act.
* When USDA audits reveal violations of the LMPR Act, USDA has not been providing this information to the public, which undermines the overall transparency of the program.
In November, eight farm and livestock organizations, including the Iowa Pork Producers Association, urged that Congress move forward with a five-year extension of the federal price reporting law only if the GAO findings and other needed changes are adopted in the new legislation.
“The Livestock Mandatory Price Reporting Act needs modifications to improve the accuracy and transparency of price reporting for the benefit of livestock producers,” Harkin said. “It’s critical Congress acts to incorporate these needed changes without delay.”
For a copy of the report click here.
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