WASHINGTON, D.C. – The Livestock Marketing Association (LMA) applauds Congressman Roger Marshall (R-KS) on his introduction of the Securing All Livestock Equitably (SALE) Act, H.R. 4058. The SALE Act would amend the Packers and Stockyards Act, helping to provide sellers of livestock with payment protection during dealer payment defaults.
“LMA is grateful for the tremendous leadership of Congressman Marshall in the introduction of the SALE Act, which would correct an unfairness in current law causing dealer payment defaults to devastate unpaid livestock auction markets, like mine, as well as farmers and ranchers selling to dealers directly,” said LMA President, Jerry Etheredge. “Along with our partner producer organizations, we encourage the House to take swift action to approve this bill.”
The SALE Act would create a Dealer Statutory Trust, modeled after the existing Packer Statutory Trust. This would give unpaid sellers of livestock (producers, markets, and other dealers) first priority in livestock or, if the livestock have already been resold, the proceeds and receivables from those livestock.
This is necessary because current law results in livestock sellers— producers, markets, and occasionally other dealers— going unpaid with little recourse in a livestock dealer default. Payment protection options in the Packers and Stockyard Act currently do not provide sufficient protection. According to Grain Inspection Packers and Stockyards Administration (GIPSA) data, from 1999–2013, the average return on a livestock dealer bond claim was 15 cents per dollar. This does not include the Eastern Livestock bankruptcy, where the return was less than 5 cents per dollar.
The passage of the SALE Act would greatly improve recovery by adding a Dealer Statutory Trust in addition to the current bond protections.
LMA greatly appreciates SALE Act original co-sponsors Representatives David Rouzer (R-NC), Chairman of the House Agriculture Subcommittee on Livestock and Foreign Agriculture; Jim Costa (D-CA), Ranking Member of the House Agriculture Subcommittee on Livestock and Foreign Agriculture; Jodey Arrington (R-TX); Cheri Bustos (D-IL); James Comer (R-KY); Vicky Hartzler (R-MO); Steve King (R-IA); Frank Lucas (R-OK); Terri Sewell (D-AL); Jason Smith (R-MO); Darren Soto (D-FL); Glenn Thompson (R-PA); Ted Yoho (R-FL); and David Young (R-IA).
For more information on a Dealer Statutory Trust, visit www.LMAweb.com/policy/ under category “Dealer Statutory Trust.”
Source: LMA
