The U.S. Department of Agriculture's Grain Inspection, Packers and Stockyards Administration (GIPSA) in mid-June will propose new rules governing sales contracts between livestock and poultry producers and meat packers.
Secretary of Agriculture Tom Vilsack announced the development during the second of five scheduled "workshops" being conducted jointly by USDA and the U.S. Justice Department concerning competition and regulatory issues in various sectors of agriculture.
Vilsack said that, among other things, GIPSA's proposal will include what he termed a more precise definition of what constitutes anti-competitive business practices in the livestock and poultry industry to enable growers to utilize the Packers and Stockyards Act's threshold that requires them to show "injury to competition" when bringing a case. The agriculture secretary said livestock and poultry producers would benefit when considering whether to bring claims under the Packers and Stockyards Act by knowing, "how specific and how much damage (producers) have to show," and whether they need to demonstrate that the damage applies across the entire industry or just to the producer's own operation. As directed by the 2008 farm law, GIPSA also said the proposal would clarify when a company gives a "preference or advantage, or subjects a person or locality to an undue or unreasonable prejudice or disadvantage." The proposed regulation also is expected to establish criteria the agency will consider when determining whether a live poultry dealer has provided reasonable notice to contract growers that it would suspend delivery of birds if it requires the grower to make additional capital investments.
More than 500 persons attended the May 21 workshop on competition and regulatory issues in the poultry industry, conducted in Normal, Ala. Attorney General Eric Holder said more than 15,000 public comments had been submitted thus far on agricultural competition issues, and that the Justice Department was "committed to working jointly with USDA in protecting competition" in agricultural markets. During the workshop, growers who testified alleged that they received inadequate communication from companies; that grower rankings lacked transparency; and that poultry companies placed unreasonable demands that they make costly upgrades to poultry houses or risk having their contracts terminated. Virtually all growers testifying urged that GIPSA be given more enforcement authority; however, one South Carolina producer -- to heckles from other producers in the audience -- said grower contract formulas promote efficiency, and that there was no need for more government intervention in the integrated poultry industry. Meanwhile, the National Chicken Council (NCC) issued a study stating that competition was "alive and well" in the broiler sector. Click here to access the 37-page NCC study.
The next workshop is scheduled for June 7 at the University of Wisconsin in Madison, Wis., and will focus on "concentration, marketplace transparency and vertical integration" in the dairy industry. The final two workshops are scheduled for Aug. 26 at Colorado State University in Fort Collins, Colo., examining beef, hog and other animal agriculture sectors; and Dec. 8 in Washington, D.C., examining "discrepancies between the prices received by farmers and the prices paid by consumers," as well as an analysis of agricultural markets nationally that incorporates discussions from each of the previous workshops.