This fact sheet was produced by the RAFI in cooperation with the Campaign for Contract Agriculture Reform and Farmersʼ Legal Action Group.
GIPSA Regulations: Regulatory Protections for Contract Poultry GrowersUSDA regulations passed in 2012 offer contract poultry growers protection from certain unfair practices. 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. The Packers and Stockyards Act is a law designed to prohibit unfair, deceptive, and unjust discriminatory practices in the livestock and poultry industries. On December 9, 2011, USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) published new regulations for poultry contracts that will take effect on February 7, 2012. Understanding the New Regulations The regulations set forth criteria that the USDA will consider when determining if companies are acting in violation of the law. These criteria apply when a poultry company suspends delivery of birds to a grower, requires the grower to make significant capital investments in upgrading equipment or facilities, takes action against a grower for breach of contract, or includes provisions in contracts that require disputes to be resolved through arbitration. Suspension of Delivery of Birds: The USDA may consider the following items when determining whether or not a poultry company gave reasonable notice before it suspends delivery of birds to a grower:
- Was written notice given at least 90 days prior to the date the company intends to suspend delivery of birds?
- Does the notice adequately state the reason for the suspension, the length of the suspension, and the anticipated date the delivery of birds will resume?
- Did a catastrophic or natural disaster or other emergency, such as an unforeseen bankruptcy, occur to prevent the company from providing reasonable notice?
- A suspension of delivery of birds occurs when the company has not delivered a new flock by the close of the fifteenth day following the week in which the previous flock of poultry was slaughtered.
- The grower was able to exercise his/her own discretion in deciding whether or not to make the upgrade;
- In instances where a grower is coerced, retaliated against, or threatened with retaliation or coercion in order to get him/her to make the upgrade;
- The company intends to or does close the processing facility or substantially reduces the production operations within 12 months of requiring the upgrade (absent a catastrophe or natural disaster, or other emergency, such as an unforeseen bankruptcy);
- Other growers with similar facilities are required to make similar upgrades;
- The grower can reasonably expect to recoup the cost of the upgrade;
- The grower was given a reasonable period of time to implement the upgrade; and
- The upgrade is to equipment that the company previously approved and accepted and that is functioning as it was intended to function, unless the company provides adequate compensation incentives to the grower.
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