80 FR 34097 - Market Agencies Selling on Commission; Purchases From Consignment

DEPARTMENT OF AGRICULTURE
Grain Inspection, Packers and Stockyards Administration

Federal Register Volume 80, Issue 114 (June 15, 2015)

The United States Department of Agriculture's (USDA) Grain Inspection, Packers and Stockyards Administration (GIPSA) is seeking comments from the public regarding regulations issued under the Packers and Stockyards Act, 1921, as amended and supplemented (P&S Act). GIPSA regulations address circumstances under which a market agency is allowed to sell livestock on a commission basis to its owners, officers, and employees. There may be some need to update this regulation to address current marketing practices. GIPSA would like to determine whether additional information is needed in clarifying the circumstances under which key employees of the market agency, those designated as an auctioneer, weighmaster, or salesman, may purchase livestock.

[Federal Register Volume 80, Number 114 (Monday, June 15, 2015)]
[Proposed Rules]
[Pages 34097-34098]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-14538]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

9 CFR Part 201


Market Agencies Selling on Commission; Purchases From Consignment

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

ACTION: Request for information.

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SUMMARY: The United States Department of Agriculture's (USDA) Grain 
Inspection, Packers and Stockyards Administration (GIPSA) is seeking 
comments from the public regarding regulations issued under the Packers 
and Stockyards Act, 1921, as amended and supplemented (P&S Act). GIPSA 
regulations address circumstances under which a market agency is 
allowed to sell livestock on a commission basis to its owners, 
officers, and employees. There may be some need to update this 
regulation to address current marketing practices. GIPSA would like to 
determine whether additional information is needed in clarifying the 
circumstances under which key employees of the market agency, those 
designated as an auctioneer, weighmaster, or salesman, may purchase 
livestock.

DATES: We will consider comments we receive by August 14, 2015.

ADDRESSES: We invite you to submit comments on this request for 
information. You may submit comments by any of the following methods:
     E-Mail: [email protected].
     Mail: M. Irene Omade, GIPSA, USDA, 1400 Independence 
Avenue SW., Room 2542A-S, Washington, DC 20250-3613.
     Fax: (202) 690-2173.
     Hand Delivery or Courier: M. Irene Omade, GIPSA, USDA, 
1400 Independence Avenue SW., Room 2542A-S, Washington, DC 20250-3613.
     Internet: http://www.regulations.gov. Follow the on-line 
instructions for submitting comments.
    Instructions: All comments should make reference to the date and 
page number of this issue of the Federal Register. Regulatory analyses 
and other documents relating to this action will be available for 
public inspection in Room 2542A-S, 1400 Independence Avenue SW., 
Washington, DC 20250-3613 during regular business hours. All comments 
will be available for public review in the above office during regular 
business hours (7 CFR 1.27(b)). Please call the Management and Budget 
Services staff of GIPSA at (202) 720-7486 to arrange a viewing of 
comments.

FOR FURTHER INFORMATION CONTACT:  S. Brett Offutt, Director, Policy and 
Litigation Division, P&SP, GIPSA, 1400 Independence Ave. SW., 
Washington, DC 20250-3646, (202) 720-7363, [email protected].

SUPPLEMENTARY INFORMATION: GIPSA enforces the P&S Act. Under the 
authority granted to the Secretary of Agriculture (Secretary) and 
delegated to GIPSA, the Packers & Stockyards Program (P&SP) is 
authorized (7 U.S.C. 228) to make regulations necessary to carry out 
the provisions of the P&S Act. Section 312 (7 U.S.C. 213) of the P&S 
Act makes it unlawful for markets to engage in or use any unfair, 
unjustly discriminatory, or deceptive practice or device in connection 
with the marketing, buying, or selling of livestock on a commission 
basis. Section 307 (7 U.S.C. 208) of the P&S Act makes it the duty of 
every stockyard owner and market agency to establish, observe, and 
enforce just, reasonable, and nondiscriminatory regulations and 
practices with respect to the furnishing of stockyard services and 
makes every unjust, unreasonable, or discriminatory regulation or 
practice prohibited and unlawful. Section 201.56 (9 CFR 201.56) of the 
regulations issued under the P&S Act explains when and under what 
circumstances market agencies, individuals, or firms affiliated with a 
market agency, may purchase consigned livestock from sales conducted by 
the market agency.
    Section 201.56 was amended in October 1993 [58 FR 52886]. Since 
then only a minor technical amendment has been made to Section 201.56. 
This amendment revised the Office of Management and Budget control 
number [68 FR 75388, December 31, 2003]. GIPSA is considering whether 
to update paragraph (c).
    Section 201.56(c) of the regulations recognizes ``auctioneers,'' 
``weighmasters,'' and ``salesmen'' as key employees of market agencies. 
Key employees are those market agency employees whose duties involve 
performing key functions (i.e., functions involving determinations or 
decisions directly affecting the interests of consignors).
    Individuals performing key functions for a market agency are 
restricted to a greater degree as to the purchases they may make from 
consignments to the market. Section 201.56(c) of the regulations 
currently states that key employees may not purchase livestock out of 
consignment for their own account (personal or business) for any 
purpose. Key employees may still purchase livestock in the name of the 
market agency; for example, key employees can bid in the name of the 
market agency to make market support purchases. Market support 
purchases are purchases made in the name of the market agency when the 
market agency believes that the highest bid does not reflect the true 
market value of the livestock being offered for sale. Key employees may 
also purchase livestock in the market agency's name for the market 
agency's livestock dealer account. Market agencies and their owners, 
officers, agents, non-key employees, and firms in which these 
individuals have an ownership or financial interest may purchase 
livestock out of consignments for any purpose. Only those employees 
designated as key employees may not purchase livestock for their own 
accounts.
    In forty different locations within the regulations promulgated 
under the P&S Act, GIPSA refers to the livestock scale operator as the 
``weigher.'' The regulations refer to the scale operator as the 
``weighmaster,'' only twice. Section 201.56(c) is one of the two 
exceptions. To our knowledge there is no difference meant or intended 
between the two terms. For the sake of consistency, GIPSA is 
considering changing ``weighmaster'' to ``weigher'' in the list of key 
employees.
    GIPSA is also considering the need to retain ``salesmen'' on the 
list of key employees. Historically, salesmen have been owners or 
employees of market agencies engaged in selling livestock on a 
commission basis in privately negotiated sales. Presently we know of

[[Page 34098]]

no market agencies selling livestock through privately negotiated 
sales. The stockyards in which privately negotiated sales occurred now 
sell livestock in public auctions. While some employees may have 
retained a ``salesman'' job title, these employees no longer perform 
those functions that made them key employees.
    GIPSA is requesting comments from livestock industry 
representatives that address the following:
    (1) Which of the following should be included as a key employee, 
and why:
(a) Auctioneer
(b) Clerk of Sale
(c) Ringmen
(d) Salesmen
(e) Weighmaster/Weigher
(f) Manager or Owner
    (2) If weighers are otherwise considered key employees, should a 
weigher be allowed to bid on livestock when:
(a) The market scale is equipped with a digital indicator
(b) Livestock are not sold by weight
    (3) If livestock scale operators remain on the list of key 
employees would you object to GIPSA referring to the livestock scale 
operator as the ``weigher'' rather than the ``weighmaster'' in 
201.56(c)?
    GIPSA is also interested to hear comments on whether key employees 
may purchase livestock during a sale under specific circumstances, or 
for specific purposes, such as:
    (4) If a key employee would step down from the auctioneer's booth 
or scale during a sale:
    (a) Could the key employee then bid on livestock for their own 
account from the bleachers with the other buyers as long as the 
employee provided no key services while doing so:
    (i) Should this be limited to a specific species;
    (ii) Should their time spent bidding or serving in a key capacity 
be documented, and if so, how;
    (iii) Should a key employee be allowed to return to the 
auctioneer's booth or scale, to perform key employee duties, after 
bidding on livestock from the bleachers?
    (5) Should GIPSA allow a key employee to buy livestock for market 
support or to fill orders held by their employer, the market agency?
    (6) What is perceived to be the greatest impediment or barrier to 
effective competition at a market agency selling livestock on a 
commission basis?
    GIPSA welcomes any comments addressing these issues and any other 
aspects of the general subject of permitting key employees to purchase 
livestock from consignments to a market agency.

Susan B. Keith,
Acting Administrator, Grain Inspection, Packers and Stockyards 
Administration.
[FR Doc. 2015-14538 Filed 6-12-15; 8:45 am]
BILLING CODE 3410-KD-P