CAMPAIGN FOR CONTRACT AGRICULTURE REFORM
A voice for contract farmers, ranchers, and their communities
FOR IMMEDIATE RELEASE
Contact: Steve Etka, 703-519-7772, [email protected]
Secretary Vilsack Takes Significant Steps to Protect Poultry Grower Rights and Livelihoods
Alexandria, Virginia (December 14, 2016) – Today, Secretary of Agriculture Tom Vilsack announced the release of three long-overdue Packers and Stockyards Act (PSA) regulations that are very important to the nation’s contract poultry growers.
“These rules are a critical step in providing some basic fair business standards to govern how poultry companies treat the contract farmers that produce the chicken,” said Steve Etka, Policy Director for the Campaign for Contract Agriculture Reform.
USDA’s Grain Inspection Packer and Stockyards Administration (GIPSA) originally issued a much larger package of proposed regulations in 2010 that addressed many marketing and contracting practices in the livestock and poultry sectors. Despite strong public and farmer support for many of those proposed rules, Congress included appropriations policy riders in fiscal years 2012, 2013, 2014, and 2015 to prohibit USDA from completing the rulemaking process.
“In response to public pressure, Congress removed the ‘GIPSA rider’ from USDA’s fiscal year 2016 appropriations measure, which has allowed the Secretary to move forward with these important poultry farmer protection provisions,” said Etka.
“These rules announced today are a modified subset of those originally proposed in 2010, and include changes that reflect over 60,000 public comments received on the original proposals.”
The three GIPSA rules announced by USDA today are:
1) Interim Final Rule to clarify that the plain language of the Packers and Stockyards Act does not require farmers to prove that the harms they have suffered as a result of poultry company violations have also caused harm to competition throughout the poultry sector. In recent decades, some courts have reinterpreted the 1921 statute to say that farmers have to prove that the harms they have experienced also have the likelihood of negatively affecting competition through the poultry sector. This novel reinterpretation of the statute by some courts flies in the face of the longstanding interpretation of the statute by both Republican and Democratic Administrations alike, as well as many courts. This rule merely restates and clarifies the plain language of the statute and responds to the confusion demonstrated by some judges.
2) Proposed Rule to address unfair and deceptive aspects of “ranking” payment system used to pay poultry growers for their labor and capital. The “ranking” payment system commonly used by poultry companies to pay growers is a complicated system that shifts poultry company costs onto farmers by making them compete against other growers based largely on factors (such as chick quality and feed quality) that are controlled by the company and not the grower.
3) Proposed Rule to be more specific about poultry company practices that would be considered “unfair and deceptive” or would provide “undue or unreasonable preference” under the Act. The Act prohibits packers and poultry companies from engaging in “unfair” or “deceptive” practices, or giving any “undue or unreasonable preference or advantage to any particular person or locality.” Those terms have not been well defined. This rule provides more details on criteria the agency will use in interpreting those terms and when certain poultry company actions will be considered a violation of the Act.
All three of these rules will be open for 60 days of public comment, once they are officially published in the Federal Register. “Contract poultry farmers are small businesses who invest in excess of $1 million to build chicken houses on their own farms, going deeply into debt to secure a poultry grow-out contact with a large poultry processing company. Unfortunately, the terms of the contract and payment system are very opaque and often deceptive,” said Etka. “We are very thankful for Secretary Vilsack’s diligence in moving forward with these key protections.”
Link to the rules and USDA’s press release and fact sheet:
USDA Fair Practices
About the Campaign for Contract Agriculture Reform (CCAR):
The Campaign for Contract Agriculture Reform (CCAR) was formed in 1999 as an alliance of farmer and consumer organizations with a shared concern about the trends and effects of vertical integration in agriculture, with a particular focus on the poultry sector. CCAR and its’ member organizations have been strong advocates for a fair and cooperative business partnership between the farmers who actually produce the chickens using their own labor and capital, and the poultry companies who process and sell the chickens to consumers.