New Law Extends Livestock Producer Protections for Electronic Transactions

Livestock transactions made using electronic exchanges now have the same protections as their traditional counterparts via legislation overhauling the Packers and Stockyards Act (PSA) signed Oct. 7 by President Barack Obama.The Clarification of Treatment of Electronic Sales of Livestock Act (CTESLA) amends the protections provided by the PSA to include livestock transactions made through video or online forums, a growing segment of the market. Rep. David Rouzer, R-N.C., was the primary sponsor of the measure.Other provisions require meat packers with annual purchases of more than $500,000 to be bonded to conduct electronic transactions. Producers selling their livestock electronically will also have trust protections in case of nonpayment, similar to if the transaction were made using traditional means.The law is likely to have little impact on livestock purchases, a September 16 estimate by the Congressional Budget Office (CBO) found, as most operators of online and video livestock auctions already follow the same PSA regulations as for traditional transactions.Other provisions of the law clarify that funds can be transferred electronically, such as through a credit or debit card. Previously, the PSA allowed only checks or wire transfers to settle sales.CTESLA was passed by the House Sept. 26 with the Senate clearing the bill Sept. 29.