NSAC's Blog

Congresswomen Hold Briefing to Raise Awareness about Anti-Competitive GIPSA Rider

June 5, 2015

On Wednesday, June 3, Congresswomen Marcy Kaptur (D-OH) and Chellie Pingree (D-ME) held a briefing for congressional staff and press to raise the awareness about the “GIPSA rider” in advance of likely House Agriculture Appropriations Committee action to advance the rider. The GIPSA rider has blocked USDA from finalizing rules of the road for the contract poultry industry.

The rules being blocked cover issues like the right of farmers to speak freely without risk of retaliation, the freedom to associate with other farmers, and the right to know how their pay is calculated.

The Congresswomen were joined by Mike Weaver, a contract poultry producer; Benny Bunting, a contract farmer advocate and former contract grower; and Chris Leonard, an author who has written about the detrimental effects of concentration in the poultry and livestock industries.

Briefing speakers, left to right: Congresswoman Chellie Pingree, farmer Mike Weaver, advocate Benny Bunting, and author Chris Leonard. Credit: NSAC

Briefing speakers, left to right: Congresswoman Chellie Pingree, farmer Mike Weaver, advocate Benny Bunting, and author Chris Leonard. Credit: NSAC

The briefing was recorded and can be viewed online.

What is Happening with the “GIPSA Rider”?

The GIPSA rider has received more attention in the last few weeks since John Oliver aired a segment on his show Last Week Tonight about the plight of chicken farmers who work under the thumb of large multi-national poultry integrators who own the chicken these farmers raise.

In the coming weeks the House and Senate will take up an agricultural appropriations bill to fund the U.S. Department of Agriculture (USDA), it is widely expected that the House bill will include a policy rider to continue to prevent USDA from issuing basic rules of the road for livestock and poultry contracting.

This rider has been supported by a small handful of huge meat and poultry companies, that in the absence of fair rules, have been able to use their market power to get away with the fraudulent, deceptive, anti-competitive, and abusive practices. Their activities have allowed them to profit at the expense of small, independent farmers.

They do not want USDA to interfere with rules that would ensure a basic level of fairness. Hence, they work with friendly members of Congress to circumvent the policy making process with a rider that ties USDA’s hands and prevents the government from enforcing the law.

Why do These Rules Matter to Contract Livestock Producers?

The panelists covered several topics including the tournament system used to determine farmer pay, the methods used by the companies to retaliate against farmers, and how the companies entice landowners in depressed areas to take on millions in long term debt for short term poultry production contracts.

The Tournament System — Most contract poultry producers and contract hog producers are paid through a tournament systems. This system pits farmers against their neighbors by basing their pay on how well their animals do in relation to animals from other farms that are picked up by the companies at the same time. If there are 10 farmers in the tournament then half will be paid below base pay and half will be paid above it; half will always lose.

Retaliation Against Farmers — Farmers that speak out or join grower organizations to better their situation are often retaliated against. This is most often done by constantly delivering the weakest and smallest chicks and the lowest quality feed to the least favored growers. Producers are paid based on how many chickens survive and how well the animals gain weight. The quality of the chicks delivered is the biggest predictor of how big a farmer’s paycheck will be. This is something the farmer has no control over since the company chooses which chicks to deliver and what feed to provide.

Why do farmers sign up? – Many “complexes”, the name for a grouping of farms that raise chickens for delivery to a single processing plan, are located in economically depressed areas. Landowners, many who are trying to stay on land their families have owned for generations, are often talked into signing up based on inflated revenue projections provided by the people recruiting for the big poultry companies. Some companies have even prayed on immigrant communities, enticing them to move from urban areas with the promise of a contract and a lifestyle more like the one they had in their homeland. For many of these farmers English is a second language, which makes understanding the details of the contract difficult, which the companies take advantage of. The Farm Service Administration only requires a three year contract for the delivery of chickens in order to obtain a guaranteed loan to build poultry houses, but it takes many more years to pay off the loan.

If you would like more information, we provide details on the market competition and contract reform rules that the GIPSA rider is attempting to forestall in our blog from last week, What’s all the Flapping About and our post on last year’s GIPSA rider.

Action to Oppose the “GIPSA Rider”

In the coming weeks it is likely that the House Agriculture Appropriations Subcommittee will consider an appropriations bill for Fiscal Year 2016 that will contain a “GIPSA Rider.”

NSAC has joined with our allies across the country to stand in opposition to the House GIPSA rider and in support efforts to strip the rider from the appropriations bill.

Click here to learn how you can take action and urge your members of Congress to support these efforts to protect farmers’ rights. Action is likely to heat up in just a few weeks!

Categories: Competition & Anti-trust, Sustainable Livestock

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