Contract Fairness for Farmers
Family farmers have little bargaining leverage when entering into poultry or swine production contracts. When one party in a contract negotiation has all the power, the results can be unjust and economically burdensome. Economic risks are shifted to the farmer. Dispute resolution provisions favor the company. Large investments can be stranded by premature termination of a contract. These imbalances and economic losses negatively impact rural communities as well as farmers. Along with our allies, the National Sustainable Agriculture Coalition helped establish important new rights for contract producers in the 2008 Farm Bill.
Poultry and swine producers now have the right to cancel a contract within 3 business days of its execution. The Company must now conspicuously disclose any additional capital investments that may be required of the grower over the life of the contract. Growers may opt out of mandatory arbitration contracts and disputes must be resolved in the federal judicial district where the farmer resides rather than where the company is headquartered.
NSAC will continue to press for contract fairness by participating in the rule making process implementing these provisions. For more detail on the full set of new rights see this Grower Fact Sheet and Arbitration Fact Sheet prepared by the Rural Advancement Foundation International-USA.