Feds seeking more transparency in poultry grower contracting

By Katie Redefer
Posted 7/27/22

The Maryland poultry industry could soon be required to abide by new federal guidelines designed to increase transparency for poultry grower contracting, according to a proposal from the U.S. …

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Feds seeking more transparency in poultry grower contracting

Posted

The Maryland poultry industry could soon be required to abide by new federal guidelines designed to increase transparency for poultry grower contracting, according to a proposal from the U.S. Agriculture Department. 

The proposal includes suggested changes to the regulations upheld by the Packers and Stockyard Act of 1921, and is intended to “promote transparency in poultry production contracting and give poultry growers and prospective poultry growers relevant information with which to make business decisions,” according to the proposal.

Specifically, the proposed revisions would amend the list of disclosures live poultry dealers must provide to poultry growers and sellers with whom they sign contracts. The proposed regulations would also establish additional disclosure requirements for the use of poultry grower ranking systems by live poultry dealers, which are used by dealers to rank poultry growers by their performance and determine how much they are paid. 

If the proposed regulations are implemented, poultry dealers would be required to disclose to growers how their pay is calculated, where they are ranked amid the performance-based tournament ranking system, how much feed or supplies are provided to growers, and require contractors to give 90 days’ notice before termination along with a documented explanation. 

The Agriculture Department justifies the necessity of the proposed regulations by drawing on the ethos of the original Packers and Stockyard Act of 1921, which sought to combat monopolies in the meatpacking industry engaging in anticompetitive business practices and promote fairness in the industry “by prohibiting practices that are contrary to these goals,” the proposal said. 

It goes on to state that in the last 40 years, the poultry industry has become “increasingly concentrated, both horizontally and vertically, with the use of the poultry grower ranking or ‘tournament’ pay system increasingly predominant throughout.” By design, this system allows poultry dealers to control most, if not all, parts of the production process, and thus limits the number of dealers that poultry growers can sign contracts with. 

The Agricultural Marketing Service is requesting public comments on the proposed regulations until Aug. 8. Comments can be submitted through the federal e-rule portal at regulations.gov.

Katie Redefer is a staff reporter and Report For America corps member. She can be reached at kredefer@iniusa.org and @KatieRedefer on Twitter.