NSAC's Blog

Farmers Ask for Fair Markets and Contracts

August 26, 2010

In June, the USDA’s Office of Grain Inspection, Packers and Stockyards (GIPSA) issued a proposed rule that promises to finally rein in some of the worst anti-competitive abuses of meat packers and impose a measure of contract fairness for poultry producers.  Lauded by NSAC and many major farm organizations the rules have the potential to begin to restore fair competition and contracts in livestock and poultry markets.

Hundreds of livestock producers and poultry growers have already sent in comments to the USDA in support of these rules.

A comment submitted by six neighboring beef producing families from Iowa said, “We hope that the proposed changes will help bring back competition in the cattle business and reduce the stranglehold of the meat packers. Vertical integration is killing independent producers financially… By entering into contracts with some cattle producers — or by actually owning cattle — they can process the cattle they control if and when cattle prices rise past survival mode for us producers. The result is that both consumers and independent cattlemen lose big-time.”

From a livestock producer in Wyoming: “Market manipulation by packers through cattle trading amongst themselves and granting preferential treatment to certain feedlots destroys our cattle business.”

A former poultry producer said, “Had these provisions been in place years ago, it would have protected me from the major financial loss that I experienced when my poultry company cancelled my contract without warning, after I had made significant investments in my poultry houses…I strongly support these provisions as well as all of the other important poultry provisions of the proposed rule.”

Opposition to the rule from packers, processors and their friends has also been fierce.  The National Chicken Council, a DC-based lobbying organization for the nation’s poultry companies, is urging its member companies to distribute a document that provides misleading information about the rules to their growers. Poultry company personnel are delivering the papers to growers in person.

“The companies are using fear and intimidation to coerce growers to act against their own self-interest,” said Becky Ceartas, director of the Contract Agriculture Reform Program at the Rural Advancement Foundation International-USA, a member of NSAC. “Ironically, these regulations are designed to rein in these kinds of tactics.”

This is our best shot in decades to restore a level playing field for family farm livestock and poultry producers.  We need to let GIPSA know that these rules are needed.  You can learn more here, here and here.

Categories: Competition & Anti-trust, Local & Regional Food Systems

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