Here’s how the new USDA rules protect small farmers

Last month, the USDA upheld the Farmer Fair Practice Rules taking a step in the right direction for protecting poultry farmers and farming communities. It’s one of several steps that still need to be taken to eliminate manipulative, deceptive and retaliatory practices across the industry.

Since 2011, lobbyists for big poultry processing corporations have tried to block crucial protections like this one, often using their financial influence to push Congress to enact riders on the annual USDA funding bills. These riders made it impossible for GIPSA regulators to do their job to protect poultry farmers from poultry company abuse, mistreatment, and retaliation.

{mosads}Farmers urgently need these protections and more because poultry corporations use complicated, opaque contracts that give farmers little or no say about what happens on their farm. These contract structures keep hard-working people in the dark about how their pay is calculated and cause pay rates to fluctuate by thousands of dollars between flocks at no fault of their own.

Poultry farming contracts typically adhere to the industry-standard “tournament” payment system, which also deeply impacts farmers and their families. This system functions like a rigged lottery, requiring farmers compete against each other for part of a fixed pool of money. It forces farmers to bear the financial risk for a company’s business decisions and practices, like the quality of chicks or feed they provide. Under this system, corporations maintain full ownership of the chickens, while farmers are responsible for building, maintaining and upgrading the costly infrastructure that houses them.

This means the corporations can force farmers to upgrade facilities at their own expense for any or no reason, introducing huge and unpredictable variations in cost, and pushing them deeper into debt.  And while some of these corporations offer to help offset some of the upgrade costs, their token support is far too little to help farmers trapped in this vicious cycle of massive debt and ruthless contract competitions for part of a fixed pool of money. Many are pushed into bankruptcy.

That’s why the new Farmer Fair Practice Rules are crucial. They will help protect farmers from some of the most manipulative practices in the industry. 

For example, the new rules will establish criteria that GIPSA can use to determine if a company is using an unfair mechanism to pay farmers. They will also clarify what practices violate the Packers and Stockyards Act, which prohibits undue preference and discriminatory practices towards farmers. In the past these areas have been unclear, and farmers have struggled to make their case due to a lack of criteria in the legislation. These rules make it more clear that obvious abuses, such as retaliation against a farmer who speaks out about company practices, violate the Packers and Stockyards Act and are thus prohibited.

The guidelines also close key legal loopholes that rig the system in favor of corporations. Under the current system, a farmer must demonstrate that a fraudulent action by a company is likely to cause a competitive injury across the entire poultry sector. This is like saying that if someone burns your house down, you have to prove that their wrongdoing impacted the price of every house in the country in order to bring a case against them. This is also a blatant misinterpretation of the existing Packers and Stockyards Act, which does give individual farmers protections under the law from deceptive and unfair business practices. The new rules provide common-sense clarification on this, ensuring that farmers will have access to justice through the courts if necessary. But most importantly, it acts as a deterrent so that poultry companies will think twice about using abusive practices.  

While the new rule represents a major victory for farmers, there’s still more work to be done. Even with the new regulations, it’s far too easy for poultry corporations to retaliate against farmers who speak out against unfair practices by terminating their contracts or blacklisting them within the industry. We must remain steadfast to hold these corporations accountable for their actions. We’re confident that GIPSA and other regulations can provide a fairer, more sustainable poultry industry that serves the public need for food security and provides a decent living to farming families.

Sally Lee is Program Director at Rural Advancement Foundation International (RAFI-USA), a national non-profit that advocates for fairer contracts and better policies for farmers, rural communities, and the environment. She is the Director of the organization’s upcoming documentary, Under Contract, which chronicles the struggles contract farmers face trying to earn a decent living wage.

The views expressed by authors are their own and not the views of The Hill.