USDA Proposes New Regulations Related to Chicken Growers’ Contacts

"Concerns about a lack of fairness and commonsense treatment for livestock and poultry producers have gone unaddressed far too long," Agriculture Secretary Tom Vilsack said in a written statement. "This proposed rule will help ensure a level playing field for producers by providing additional protections against unfair practices and addressing new market conditions not covered by existing rules."

• The proposed rule affects poultry growers when chicken companies require them to provide expensive capital upgrades. The proposed rule includes a provision to ensure that poultry growers have the opportunity to recoup at least 80 percent of the cost of the upgrades.
• The proposed rule would require that poultry growers receive a written notice of a company's intention to suspend the delivery of birds at least 90 days in advance of the suspension.
• It will require that companies paying growers under a tournament system provide the same base pay to growers that raise the same type and kind of poultry, including ensuring that the growers’ pay cannot go below the base pay amount.
• If adopted as written, the rule will enable a process for producers that choose to use arbitration to remedy a dispute. Additionally, clear and conspicuous print in the contract will be required to ensure producers are provided the option to decline the use of arbitration to settle a dispute.
• The proposed rule would provide further definition to practices that are unfair, unjustly discriminatory, or deceptive, including outlining actions that are retaliatory in nature, efforts that would limit a producer's legal rights, or representations that would be fraudulent or misleading.
• The proposed rule reiterates USDA's position that a producer need not overcome unnecessary obstacles and have to always prove a harm to competition when they have suffered a violation under the Act.
• The proposal calls for sample contracts (except for trade secrets or other confidential information) to be made available on GIPSA's website for producers.

The proposed rule was published in the June 22, 2010 edition of the Federal Register. Public comments will be accepted through November 22 by the U.S. Department of Agriculture’s Grain Inspection, Packers and Stockyard Administration. They can be sent via e-mail to comments.gipsa@usda.gov or by mail to Tess Butler, GIPSA, USDA, 1400 Independence Ave., SW, Room 1643-S, Washington, DC 20250-3604.

More information, including details of the proposed rule changes, is available at www.gipsa.usda.gov. This information includes the 17-page, nearly 20,000-word rule; a section by section summary of the proposal; explanations about some of the new sections of the regulation; and questions and answers about the proposed rule.