Understanding New Protections for Contract Poultry Growers» Contract Agriculture Reform

Download a printable copy in MSWord or PDF

As a contract poultry grower, your relationship with the poultry company is governed by your contract. You have certain rights beyond that contract under a federal law called the Packers and Stockyards Act. The details of your rights under the Packers and Stockyards act are described in regulations. New regulations that further clarify the rights of growers are now in effect.

What is the Packers and Stockyards Act?

The Packers and Stockyards Act is a law designed to prohibit unfair, deceptive, and unjust discriminatory practices in the livestock and poultry industries. Among other things, the Act protects farmers who grow broilers for poultry companies under a poultry growing contract.

New regulations under the Packers and Stockyards Act

On December 3, 2009, USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) published regulations that may help increase fairness and equity in the poultry industry by requiring poultry companies to provide poultry growers with more information and recognize the right of poultry growers to discuss a poultry growing arrangement with certain parties. The Packers and Stockyards Act and the new regulations use the term "poultry growing arrangement" to refer to the agreements governed by the rule, but for convenience, the fact sheet will use the term "contract" to refer to these agreements. The regulations took effect on January 4, 2010.

Confidentiality clauses

Even if your contract says that you must keep the terms of the contract confidential, the poultry company may not prevent you from discussing the terms of the contract with:

This is true for all contracts to grow poultry for slaughter, whether it is a contract you have signed in the past (as long as it was after the 2002 Farm Bill took effect), or whether it is a contract you have been offered and are considering signing.

Performance improvement plans

When a poultry company enters into a contract with you, the contract must specify whether the poultry company uses performance improvement plans for its growers. GIPSA has stated that this requirement applies to new contracts and contracts that are modified after January 4, 2010.  If the poultry company uses performance improvement plans (PIPs), the contract must state the guidelines for the performance improvement plan, including the following:

Notice of contract termination

If the poultry company that you contract with decides to terminate your contract, then the poultry company must provide you with a written termination notice at least 90 days prior to the termination of the contract. The written notice must contain the following information:

Right to terminate your contract

A new or modified contract must provide you with the opportunity to terminate the contract in writing at least 90 days prior to the termination of the contract.

Right to receive a copy of the contract when you receive specifications

What if the company that I contract with does not comply with these regulations?

For more information

These materials provide a general overview of the new regulations that were issued by GIPSA on December 3, 2009. For further information about these rights and other rights protected by the Packers and Stockyards Act regulations, contact Becky Ceartas at RAFI-USA - 919-542-1396, x209, becky@rafiusa.org, PO Box 640, Pittsboro, NC 27312, consult an attorney with experience in this area of law or go to http://www.gipsa.usda.gov .

Page Updated 1.15.2010