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CAMPAIGN FOR CONTRACT AGRICULTURE REFORM
The Campaign for Contract Agriculture Reform
is a national alliance of organizations working to provide a voice
for farmers and ranchers involved in contract agriculture, as well
as the communities in which they live. The goal of the campaign
is to assure that the processor-producer relationship serves as
a fair partnership, rather than a dictatorship.
USDA estimated in 1998 that approximately 35% of all agricultural
production was produced under contract. This trend is rapidly spreading
from poultry to hogs to tobacco to specialty crops and grains. Unfortunately,
these agricultural contracts are developed in an environment in
which the corporate processors, handlers, packers or buyers have
monopoly-like market power and farmers have almost no legal protection.
The result is a growing imbalance in market power between the family
farmer and agribusiness corporations, which is depressing farm income
and threatening the economic viability and environmental health
of our rural communities.
Fairness in contracts is impossible when individual producers have
no power to negotiate terms or to protect themselves against fraud,
retaliation or discrimination. Farm policies that can help to balance
the contract relationship include:
Amend the Agricultural Fair Practices Act to protect the ability
of farmers to negotiate fair
contracts with processors. Such an amendment enhances
the power of producers and their cooperatives to stabilize farm
income by providing mutual obligations for good faith bargaining.
This amendment gives marketing cooperatives the leverage to compel
negotiations, providing participation in contract development reflective
of the farmers' economic investments. Any such amendment must also
include strengthen the enforcement ability of the Secretary of Agriculture.
Amend to the Packers and Stockyards Act to provide enforcement authority
for GIPSA over all live poultry operations. Poultry
production is almost totally contract based. Despite evidence of
the contract being used as a tool to intimidate, retaliate and reduce
growers profits to poverty levels, the Grain, Inspection, Packers
and Stockyards Administration (GIPSA) does not have the authority
to take administrative action and protect growers by halting unfair
practices or penalizing poultry companies that violate the law.
An amendment to provide GIPSA with the necessary enforcement authority
over poultry cases would simply bring poultry in line with other
livestock within the Packers and Stockyards Act.
Legislation
amending the Packers and Stockyards Act and reflecting
the policy outlined above has been introduced in US House of Representatives
by Congresswoman Marcy Kaptur of Ohio and Congressman David Price
of North Carolina. Click
for a fact sheet about this bill.
Establish minimum standards for agricultural contracts and reasonable
government oversight. Standards should include (among others):
- Prohibition on confidentiality clauses.
- Prohibition on binding arbitration in contracts of adhesion.
Legislation
ending forced arbitration was introduced on December
16, 2005. Click for an action
alert about this bill.
- Recapture of capital investment. (Contracts that required
a significant capital investment by the producer cannot be capriciously
canceled without the producer collecting damages.)
- Ban unfair trade practices including "tournament"
pay (the "ranking system").
Return to Contract Agriculture
Reform page.
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