Attorneys general from 10 states support a rule proposed by the US Department of Agriculture that aims to secure fair deals between poultry farmers and meat processors, but they want stricter oversight.
“One of the many reasons why it is difficult for small poultry farmers – and small farmers of all kinds – to support themselves is because of the imbalances of power, money and information between farmers and processors,” Minnesota Attorney General Keith Ellison said Monday when he joined his nine-state counterparts in publicly commenting on the USDA proposal. “These imbalances lead to unfair competition and poor outcomes not only for these farmers, but also for their communities and their way of life.”
The USDA is seeking comments on its proposed rule for transparency in poultry breeder contracts and tournaments through August 23. It builds on the provisions of the Packers and Stockyards Act 1921 which was passed to ensure fair competition and trade for farmers and ranchers.
The proposal would require poultry dealers to provide information to producers on the minimum number of chicks they could be allowed to raise and what dealers have paid other producers, among other information.
In addition, dealers who pay producers based on their performance against other producers – what is known as a “tournament-type system” – would be required to disclose more details about the chicks they supply to help. producers to predict how much meat could result.
About 90% of broiler chickens – those raised for their meat – are traded under contracts with meat processors, attorneys general from California, Delaware, Idaho, Illinois, Iowa, Maryland, Minnesota, Nevada wrote. , North Carolina and Pennsylvania.
“Half of the chicken farmers in the United States work in regions dominated by one or two chicken processors,” they said. “The high concentration of buyers in local markets allows poultry processors to respond in a punitive manner to any farmer’s complaints about their contract. This leaves no room for poultry farmers to negotiate their contracts. »
So the attorneys general support expanding the disclosures that processors make to producers, but here’s the problem: The proposal relies on processor executives to assert that the information is accurate. The lawyers asked the USDA to put in place some kind of external control of the process. The current proposal could “minimize the transparency” that can be achieved, they wrote.
The proposed rule coincides with efforts to ensure fairness for other ranchers, especially those who raise livestock. A bill in the US Senate – the Cattle Price Discovery and Transparency Act – was returned from committee in June, but has yet to gain a full Senate vote.
This bill seeks to address similar concerns about the concentration of beef processing in a handful of companies with high-volume facilities. The weaknesses of such a system were revealed during the first months of the coronavirus pandemic, when the temporary closure of some of these facilities due to worker infections led to a sharp reduction in demand for livestock, which forced producers to scramble to find ways to sell their livestock. cattle.
“Unfortunately, concentration in the poultry sector has resulted in very few options for most producers,” said Andy Green, USDA’s senior advisor for fair and competitive markets, in a recent webinar on the new poultry proposal. “Farmers can only make contracts with a few poultry dealers near them. Many growers have complained to the USDA over the years that the lack of choice results in unfavorable contract terms for growers.
The USDA recently extended the comment period on the proposed rule to ensure adequate feedback. The previous deadline for comments was Monday.
“There is fear in the meat and poultry industry, as we saw earlier this year in two separate congressional hearings where witnesses did not testify due to fears of retaliation. U.S. Agriculture Secretary Tom Vilsack said Friday when the USDA announced the extension. “But it’s still essential that we hear the full story, so we’re highlighting the option for comments to be provided anonymously.”