April 18, 2013

Who will protect our poultry farmers?

Ginny Weinmann

Ginny Weinmann

Research Assistant

Center for a Livable Future

Last month, a measure that protected poultry farmers across the U.S. was revoked, leaving them vulnerable to the idiosyncrasies of the large integrating companies to whom they contract.  They’re hoping Senator Barbara Mikulksi (D–MD) will intervene.

Most of the farmers in the U.S. who “grow” birds work under contract for large integrating companies and are therefore known as “contract growers.”  The integrators supply baby birds to the growers, who raise them, then take them back to process them and sell the meat. Under the conditions of the contracts, most poultry growers typically have few rights and little leeway under the heavy hand of the integrator. And now the little protection they had from a rule passed in 2011 was cut by a measure tucked into the Federal Spending Bill in March. This protection, a rule that required integrators to give growers 90-days notice before suspending delivery of birds, was eliminated.

The 2011 rule came out of a long battle that had started with much stronger regulations proposed in 2010. The original proposal included provisions that prohibited retaliation by integrators toward growers who spoke out against malpractice and stopped integrators from requiring growers to bear the full expense of upgrades they could not afford. It also protected contract growers in the livestock industry in addition to poultry. CLF and many other groups submitted comments to the USDA in support of the strong rules.  Despite the effort, these and many other provisions were dropped when the rule passed in 2011 and the strongest part of the final rule ended up being the 90-day notification of delivery suspension for poultry growers.

These regulations were mandated by the 2008 Farm Bill, which required the Grain Inspection, Packers, and Stockyard Administration (GIPSA), a section of the USDA that regulates marketing and fair competition within livestock, poultry, cereals, and other agricultural products, to clarify and strengthen the Poultry and Stockyards Act of 1921 (PSA).  Previously, the PSA allowed GIPSA to regulate in specific cases when a problem occurred, but the rules would be clear and uniform for all interactions between integrators and growers.

The 90-day notification was an important rule, even after the disappointing loss of other proposed provisions.  Integrators often require expensive upgrades, and can suspend delivery of birds to a contract grower when demand slows.  This means that the grower would receive no birds and therefore no income for an indefinite amount of time, deepening inevitable debt from the upgrades. Integrators might also choose to terminate a contract with little or no notification. The 2011 rule protected growers from this uncertainty of income and allowed them to plan ahead and repay debt.

Now, even that small victory has been removed.  Its demise was rolled into the Federal Spending Bill where it was bound to pass because the bill was so large and essential and the contract grower provision so small. CLF fought for its removal, but to no avail.  Surprisingly, Senator Barbara Mikulski, a Democrat from Maryland and Chairman of the Senate Committee on Appropriations, which determines all discretionary spending, did not act to remove this provision.  Senator Mikulski (on Twitter @senatorbarb) is a strong voice with a history of supporting farmers, both small and large.  We are disappointed that she did not intervene, but we turn to her and other lawmakers for change in the future.  And maybe this time the regulations can do even more to protect this country’s small contract growers.

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