Contract Agriculture Reform

ABOUT THE PROGRAM
In the face of record low commodity prices and ever increasing market concentration, many U.S. farmers are turning to contracting for economic security. The RAFI-USA Contract Agriculture Reform program is an effort to ensure these contract arrangements between individual farmers and processors are fair and equitable.

Our work includes:

  • Empowering farmers by providing critical information on the long-range impact of contracting in the poultry industry
  • Developing and promoting state and federal reforms to protect the rights of individual contract farmers and farmer-controlled cooperatives
  • Supporting active, farmer-controlled associations that can reduce the isolation and vulnerability of individual contract growers
  • Educating consumers about the implications of market consolidation and vertical integration through collaboration with social justice, church, community -based, environmental, and civic organizations
  • Providing analysis and technical assistance for viable market alternatives.

The RAFI Contract Agriculture Reform Program is an expansion of our 15 years of support for contract poultry farmers trapped in bad contracts. The poultry industry has been fully vertically integrated and dominated by contract production for almost forty years. Poultry growers can document the evolution of contracting in the poultry industry from a mutually beneficial agreement among neighbors to a one-sided, legalized form of debt bondage.

The poultry industry model of corporate concentration, vertical integration and contract production is rapidly spreading to other commodities including pork, tobacco, beef, soybeans, and other crops. Responding to these changes and drawing from the poultry experience, RAFI-USA is providing analysis of the long-term social, legal and economic impacts of the contract agriculture system and possible viable alternatives.

In addition, RAFI-USA is working in collaboration with other national farm and community organizations for reforms to protect the family farmer who turns to contract production.

Learn more about the Campaign for Contract Agriculture Reform and federal contract reform initiatives.

RESOURCES

Fact Sheet Overview of Contract Agriculture and the Poultry Industry

Newest Protections for Contact Poultry Growers

Facts for Growers

Loan Suspension

Fact sheet Suspending Guaranteed and Direct Loans To New Poultry and Hog Facilities (PDF)

Poultry Mortality

Developing a Farm Plan for Mass Poultry Mortality - (PDF) an article by Becky Ceartas

Litter and Mortality Management Update - PDF of a powerpoint by Bud Malone, University of Delaware Extension Poultry Specialist

2009 FSA Directive on Poultry Loans

Farm Service Agency (FSA) issued a new directive (PDF) to all of its loan officers with guidance for making new direct and guaranteed poultry loans.  Specifically, a grower's contract has to be for at least three years, provide for termination based on objective “for cause” criteria only, require that the grower be notified of specific reasons for cancellatio, and provide assurance of the producer’s opportunity to generate income with which to develop a cash flow budget and repay the loan.  Download the full directive. (PDF)

Policy Recommendations for the Obama Administration - Twelve organizations developed a comprehensive set of recommendations for the Obama-Biden Transition Team to help guide Farm Bill implementation and to allow the new administration to achieve fair, open and competitive markets. Read more.>>

Farm Loan Restructuring
 Because most family farmers live on the farm, losing the farm means losing the family home as well. RAFI and its partners recommend that the government require private banks that receive stimulus or recovery funds to offer the farmers they finance a chance to restructure their payments. Read more.>>

The 2008 Farm Bill contains first ever Livestock Title -  The Food, Conservation and Energy Act of 2008 contains the first ever Livestock Title, which has many contract fairness provisions that we have been advocating for.  We fought hard to ensure that the voluntary arbitration provision also remained in the final version of the bill.
Facts for Growers (or Printable PDF)
Arbitration Fact Sheet
(PDF)
Costs of Arbirtration vs. Court
(PDF)

Competition Sign on Letter – Over 200 organizations signed onto this letter calling for a comprehensive Competition Title that would include contract reform provisions in the next farm bill.  Read the letter (PDF)

NEW publication – The Farmers Guide to Peanut Contracts (PDF, 1.8M). January 2007. This guide is intended for farmers who are considering growing peanuts for the first time and for those who are deciding whether to expand their operations and investment in equipment based on contracts in the United States.

Issues to Consider Related to Tobacco Contracts (PDF, 2.2M)

Articles on recent poultry cases and integrator liability:
Overview on Integrator Liability (PDF)
Tyson v. Sierra Club (PDF)

Overview of 2007 Farm Bill Contract Agriculture Reform Pieces
Summary – CCAR Farm Bill (PDF)
Agricultural Fair Practices (PDF)
Packers & Stockyards Act Reform (PDF)

Links to research and information on agricultural contracts
University of Missouri
Iowa State Attorney General
Farmers Legal Action Group

Overview of Gatlin v. Sanderson Farms, Inc.: Issues on Appeal. December 2005 (PDF).

Guide weighs pros and cons of contract farming. July 28, 2005. Newly revised "Questions to Ask Before Signing a Poultry Contract" helps farmers assess the true risks and benefits associated with contract poultry production. View the press release (WORD) and the guide (PDF).

Farm organizations take action to support farmers' right to go to court. View the press release (WORD) and amicus brief (PDF).

Articles from the Winston-Salem Journal, June 2004, about poultry contracts:

Editorial
Poultry contracts, part 1
Poultry contracts, part 2

View our electronic publication Your Poultry Contract is Cut Off Due to Plant Closing: What Should You Do? 2003
A new educational sheet on questions to ask when your poultry contract is terminated due to a plant closing (PDF).

View our monthly e-Bulletins for more information and news about contract agriculture reform.