The Packers and Stockyards Administration's Regulatory Reform Activities

In response to a congressional request, GAO reviewed the Department of Agriculture's Packers and Stockyards Administration's (P&SA) regulatory reform activities. GAO was particularly interested in the P&SA task force which was established in January 1981 to review and recommend changes in P&SA regulations and policy statements to reduce unnecessary regulatory burdens on the livestock industry. GAO summarized the P&SA regulatory reform process and discussed the task force's recommended changes in four major areas: (1) bonding requirements, (2) custodial accounts, (3) trade practices, and (4) sales promotion programs.

The Packers and Stockyards Act is intended to ensure fair competition and fair trade practices in the marketing of livestock, meat, and poultry as well as meat and poultry products. P&SA administers the Act by regulating stockyards, packers, market agencies, and dealers engaged in interstate commerce. During its study, the P&SA task force sought input from various sectors of the livestock industry through meetings with various national organizations representing the industry. According to P&SA task force officials, many of the task force recommendations would not only reduce the regulatory burden on the livestock marketing industry but would update and streamline the regulations and policy statements and make them easier for the industry to understand and follow. The national organization representatives with whom GAO spoke were generally satisfied with the way P&SA was going about its regulatory reform activities. Currently, all dealers and market agencies are required to maintain or file a minimum $5,000 bond. The task force recommended that small dealers be exempt from bonding requirements. Current P&SA regulations require market agencies selling on commission to reimburse custodial accounts for uncollected receivables after 3 days, which the task force recommended be extended to 7 days. The task force also recommended that the restrictions on trade practices regulations be consolidated and simplified and that the meat packer sales promotion programs policy statement be revoked primarily due to administrative costs.