National Sustainable Agriculture Coalition

Fair Practices Rules Protect Contract Farmers

Dan Industry News Release

National Sustainable Agriculture Coalition praises USDA for moving forward on rules to protect contract farmers

fair practices
Nearly 100 years after the passage of the Packers and Stockyards Act, a law intended to eliminate abusive practices in the meatpacking industry, the U.S. Department of Agriculture (USDA) has published a set of rules that will finally give the largely toothless act some bite. The “Farmer Fair Practices Rules” published, of which there is one interim final rule and two proposed rules, will provide much-needed protections to contract farmers in the poultry and livestock industry. The National Sustainable Agriculture Coalition (NSAC) applauds Secretary Vilsack for moving forward on these common-sense rules and protecting producers from abusive, unfair, and anti-competitive practices.

“American contract farmers have been waiting a long time for these protections, protections that most of us take for granted in our own workplaces and industries,” said Paul Wolfe, NSAC Policy Specialist. “We commend the Obama Administration and Secretary Vilsack for their commitment to moving these rules forward and for leveling the playing field for contract farmers. The Farmer Fair Practices Rules are basic and sensible – in the case of the interim final rule, we are actually not even looking at anything new. The interim final rule simply confirms what successive Administrations have held and what the law plainly says, that the Packers and Stockyards Act does not require a showing of competitive injury. The idea that contract farmers should have to prove injury to the whole sector in order to receive compensation for having been the victim of an anti-competitive practice is an impossible standard. This rule upholds the original intent of the law.”

The other two rules issued are proposed rules. Both they, and the interim final rule, will be subject to a 60 day comment period that begins immediately after they are published in the Federal Register. The first of these proposed rules addresses some of the abusive practices in the contract poultry industry’s tournament system. Although farmers are often promised a minimum base pay, when they sign a contract many find that their entire income relies on a system that pits farmers against their fellow farmers – a system in which many farmers lose and the companies always win. In theory this system is supposed to ensure the best and healthiest birds, but in reality it is often used by the industry to play favorites and punish growers who speak out. The new proposed rule will address some of the most egregious aspects of the tournament system by identifying and stopping discriminatory practices like retaliating against growers by intentionally giving them lower quality feed or chicks.

The second proposed rule addresses undue preference and unfair practices of certain sellers by animal purchasers. This rule defines criteria for what would amount to undue preference for one producer over another, and it also defines unfair practices. Meat and poultry companies will retain the right to provide a reasonable business justification for their actions in the case that a complaint is brought against them.

NSAC plans to issue comments on each rule and will publish those comments, along with our analysis, on our website. USDA has also developed a useful FAQ to address questions that farmers and the public may have about these rules, and to dispel any potential misinformation.