Proposal to protect contract broiler farmers in the US

The USDA notes that there is a “range of abuses” that are being inflicted on broiler farmers. Photo: Canva

The United States Department of Agriculture (USDA) is proposing new ways to protect contract broiler farmer across the country from unfair payment systems and forced extra expenditures.

The new proposed rule is called ‘Poultry Grower Payment Systems and Capital Improvement Systems’. It is the third in a series of reforms to the ‘Packers and Stockyards Act’ and aims to reduce unfair hardships being inflicted on contract broiler farmers by the companies they supply.

The USDA notes that there is a “range of abuses” that are being inflicted on broiler farmers in terms of the ranking payment systems, commonly known as ‘tournament’ payment systems. In addition, poultry companies also currently often impose unfair extra capital investment requirements on their contracted farmers.

The new rule, if passed, would “provide critical tools 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,” states the USDA. “The rule would also establish a duty of fair comparison to ensure grower comparisons (tournaments) are conducted in a reasonable and equitable way that does not disadvantage specific growers.”

Market transparency

Agriculture Secretary Tom Vilsack recently stated that the USDA has sought to “utilise every tool at its disposal to uphold fair competition, protect producers, lower costs for consumers and combat unfair, deceptive and discriminatory practices.” He added: “By continuing to provide more market transparency tools, we are also continuing to pull back the curtain to ensure every producer has access to the market information they need. With these actions, USDA is holding steadfast to this commitment, and is building ever more momentum towards delivering the fairer markets that those who raise America’s livestock and poultry deserve.”

Proactive protection

Andy Green, USDA senior advisor for Fair and Competitive Markets, noted that this change will “provide growers with a clear base price in contracts, a contracting partner that designs and operates any comparisons fairly, and access to the information that growers – and the USDA – need to identify and halt coercive investment demands before growers take on large debts.”

The USDA explains that the new rule, if finalised, not only will prohibit deductions from the base price in contracts but support bonuses for performance. The USDA is currently looking for feedback on the rule before it is formalised. “We look forward to taking comment from all interested parties,” said Green.