At midnight on 14 December, the US Department of Agriculture’s (USDA) Grain Inspection, Packers and Stockyards Administration (GIPSA) announced regulatory changes, crafted to protect farmers supplying livestock to processors.
USDA recommended implementing what it called “common sense protections” to help farmers seek justice under the Packers and Stockyards Act (P&S Act). The changes will protect against “egregious retaliatory practices harming chicken growers”, the government said.
Called the Farmers Fair Practices Rules, the changes are comprised of an interim final rule and two proposed rules. GIPSA has sent all three to be published in the Federal Register. The interim rule establishes that it is no longer necessary to prove that an unfair trading practice harms the entire market in order to prove a violation under the P&S Act.
The first proposed rule seeks to clarify what GIPSA views as illicit trading practices, while the second suggests steps to follow to determine if a live poultry dealer has used a chicken grower ranking system unfairly.
‘Big step forward’
Tom Vilsack, USDA Agriculture Secretary, said the government was “taking a big step toward providing the protections farmers deserve”. He added that processors and meat packers too often wielded power, while farmers were forced to “carry the risk”.
While the news has been welcomed by the Campaign for Contract Agriculture Reform, which said the USDA was “moving in the right direction”, other players have reacted angrily to the rule changes.
The National Chicken Council (NCC) warned the “controversial” regulations could raise the price consumers paid for meat and poultry and cost jobs in rural America.
“These rules could lead to rigid, one-size-fits-all requirements on chicken-growing contracts that would stifle innovation, lead to higher costs for consumers, and cost jobs by forcing the best farmers out of the chicken business,” warned NCC president Mike Brown.
“The interim final rule on competitive injury would open the floodgates to frivolous lawsuits.
“Some of these provisions would also have a detrimental impact on the welfare of the birds by eliminating competition and the incentive to provide the best care possible on the farm,” he added.
Dissatisfaction was also voiced by the National Cattlemen’s Beef Association president Tracey Brunner, who said: “The GIPSA rules are especially troubling to the cattle industry as we have consistently stated that, if adopted, this rule-making will drastically limit the way our producers can market cattle and open the floodgates to baseless litigation.
“In a time of down cattle markets, the last thing USDA needs to do is limit opportunity. The fact of the matter is, we don’t trust the government to meddle in the marketplace.”
The USDA said it heard that, in 2010, that chicken farmers were promised long-term business relationships with processors and packers, yet were allegedly bullied into accepting short-term contracts.
USDA claimed the Farmer Fair Practices Rules reflected feedback from more than 60,000 comments and economic analyses conducted by GIPSA and USDA economists.