FOR IMMEDIATE RELEASE
Contact: Steve Etka, Policy Director
Campaign for Contract Agriculture Reform
steveetka@gmail.com | 703-519-7772
CCAR Praises Secretary Vilsack on the Proposed Rule to Infuse Basic Fairness Requirements into Poultry Grower Payments Systems and Capital Upgrade Requirements
Rule marks an important next step toward broader fairness for our nation’s poultry growers
Editor’s Note: NSAC shares the following statement by Steve Etka, Policy Director for the Campaign for Contract Agriculture Reform CCAR in support of the USDA’s Packers and Stockyards Act proposed rule on “Poultry Grower Payment Systems and Capital Improvement Systems.”
June 3, 2024 – “Today, Agriculture Secretary Vilsack announced a new proposed rule under the Packers and Stockyards Act to make significant reforms in the payment system, often referred to as the ‘tournament’ or ‘ranking’ system, commonly used by poultry companies to pay contract poultry growers. The rule also addresses circumstances where poultry companies unfairly force poultry growers with whom they contract to make expensive capital equipment upgrades to their poultry houses, at their own expense.
Specifically, the proposed rule would do the following:
- provide growers with a clear base price in contracts, by prohibiting deductions from the base price in contracts for broiler chicken growers, permitting only bonuses for performance;
- establish a “duty of fair comparison” to ensure that comparisons between growers are conducted in a reasonable and equitable way.
- establishes disclosure requirements to enable growers to better identify risks that may arise on capital improvement practices and enhance the ability for USDA to enforce existing prohibitions on unfair capital improvement practices.
This new proposed rule is an important next step in bringing fairness to the contracting practices used by large poultry companies to contract with farmers who raise chickens for them. It builds on a prior Packers and Stockyards rule (now final) that requires poultry companies to make full disclosures to prospective poultry growers about what they can expect if they sign a contract to grow chickens for the company, and to also disclose details to existing growers about how their pay is calculated. (https://www.federalregister.gov/documents/2023/11/28/2023-24922/transparency-in-poultry-grower-contracting-and-tournaments).
The new proposed rule also builds on a July 2022 U.S. Department of Justice Consent Decree related to the merger between Sanderson Farms and Wayne Farms, in which the merged poultry integrator firms agreed to make certain reforms to address abusive practices in how they pay contract poultry growers. (https://www.justice.gov/opa/pr/justice-department-files-lawsuit-and-proposed-consent-decrees-end-long-running-conspiracy).
This new proposed rule is the third of four important Packers and Stockyards Act rule updates being promulgated by USDA to address abusive and deceptive practices of poultry companies and meatpackers in their dealings with farmers and ranchers. Two rules, the ‘Transparency in Poultry Grower Contracting and Tournaments,’ and the ‘Inclusive Competition and Market Integrity Under the Packers and Stockyards Act,’ are now in effect. The fourth Packers and Stockyards Act rule, the proposed rule on “Unfair Practices, Undue Preferences, and Harm to Competition Under the Packers and Stockyards Act” is at the Office of Management and Budget awaiting clearance.
The members of the Campaign for Contract Agriculture Reform (https://contractagreform.org/members/) look forward to providing detailed comments on this important proposed rule as part of the public comment period.”
Link to USDA’s website about the proposed rule:
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The National Sustainable Agriculture Coalition is a grassroots alliance that advocates for federal policy reform supporting the long-term social, economic, and environmental sustainability of agriculture, natural resources, and rural communities. Learn more and get involved at: https://sustainableagriculture.net
The post Release (Cross-Post): CCAR Praises Secretary Vilsack on the Proposed Rule to Infuse Basic Fairness Requirements into Poultry Grower Payments Systems and Capital Upgrade Requirements appeared first on National Sustainable Agriculture Coalition.