Pew Environment Group Urges Senate to Reject Cloaked Attack on Contract Poultry Growers

Poultry Barn. Photo Credit: Dave Harp

After years of discussion that included listening sessions across the country and a review of more than 60,000 public comments, the U.S. Department of Agriculture (USDA) issued new rules for livestock agriculture in late 2011. The promulgation of these rules was required by Congress in the 2008 farm bill and was intended to help level the playing field for farmers who raise livestock under contract with large meat-processing companies.

However, two bills now moving through the House of Representatives would eliminate the new rules. Rep. Jack Kingston (R-GA ) has quietly attached a rider to the House agriculture appropriations bill, and Reps. Michael Conaway (R-TX)  and Jim Costa (D-CA) have amended the House farm bill, with provisions that would effectively close off every avenue to a fair marketplace for contract chicken growers.

The finalized 2011 rules were the result of a hard-fought battle between the meat processing industry and ranchers and farmers. Sadly, following immense pressure from the industry, very little of the USDA's original proposal was included in the final rule. The remaining protections include: 

  • limitations on the extent to which a processor can demand unreasonable capital improvements from a contract grower (who raises the livestock owned by the processors);
  • requiring processors to ensure that growers are aware of, and may decline, contract provisions that limit growers' options for settling disputes;
  • requiring that the contracting meat-processor provide growers with a reasonable amount of notice if they plan to suspend delivery of birds, which would deprive growers of expected income; and
  • clarification that contract protections also cover farmers who tend laying hens.

These are modest provisions but nonetheless a step toward protecting the growers who raise 99 percent of our nation's broiler chickens. Rep. Kingston's rider would eliminate the much-needed protections related to capital improvements, notice of delivery suspensions, and coverage of layer and pullet growers in contract protections.

The 2012 House agriculture appropriations bill would prevent any funds from going toward implementation of the new rules and goes so far as to include unprecedented language that instructs the secretary of agriculture to “rescind” key remaining protections. The 2012 House Farm bill now contains similar language.  Our nation's farmers deserve better.

It is time to restore fairness and competition to the marketplace and to ensure that the relationship between farmers and processing companies is equitable and transparent.

Today, virtually all U.S. chicken production is controlled by a few national processing companies that own the feed mills, slaughterhouses, shipping operations, and even the birds. For chicken farmers to stay in business, they must enter into contracts with the processing companies that dictate how growers raise and house the birds, even though the farmers hold the mortgages on large growing sheds and assume all liability for managing the tons of animal waste.

Without the rules' current provisions, growers would be subject to the demands of processing companies and have little recourse and virtually no bargaining power. If growers make the capital improvements demanded by processors, such as building new specialty barns, they must shoulder the financial burden themselves, even if their contract is canceled before the debt is paid.  If farmers want to produce poultry and livestock with less damage to the environment, they must shoulder the burden alone, with no help from the meat processing companies that reap the profits.

The Pew Environment Group joins the American Farm Bureau AssociationNational Farmers Union, and other organizations across the country in opposing this effort to provide a few large processing companies with control of the U.S. poultry market at the expense of American farmers. We urge senators to reject any efforts to include similar language in the current Senate agriculture appropriations bill. It is time to restore fairness and competition to the marketplace and to ensure that the relationship between farmers and processing companies is equitable and transparent.

You, too, can take action by urging your senators to oppose any efforts, such as those in the House Farm bill and House Agriculture Appropriations bill, that would derail the USDA's rules that level the playing field for contract producers.  

Find your senator here