2014 Farm Bill Analysis: GIPSA


This is the second in a blog series where RAFI staff will examine how the 2014 Farm Bill impacts key structural issues related to sustainability in agriculture. After two years of delay, the 2014 Farm Bill is now law. Also known as the Agricultural Act of 2014, the law is wide-ranging. This post aims to cover how the bill impacts contract agriculture growers, such as poultry farmers. Click here to read the entire series.

2014 Farm Bill: GIPSA

By Steve Etka
RAFI Campaign for Contract Agriculture Reform
Policy Director

There’s plenty to like and dislike about the new Farm Bill. Sometimes what is not included in a bill can be as significant as what is included.

In that regard, we can cheer the fact that the Farm Bill negotiators rejected the intense pressure from poultry companies and meatpackers to roll back key protections that require them to use fair business practices in their dealings with farmers.

In the last farm bill, passed in 2008, Congress included provisions to require USDA to write regulations, under the existing authority of the Packers and Stockyards Act, to address some of the most abusive business practices used by meatpackers and poultry companies in their dealings with contract producers, such as poultry growers. When USDA wrote the regulations, the livestock and poultry industry groups, whose practices were scrutinized by the regulations, launched a full-scale effort to pressure Congress to prohibit USDA from finalizing or enforcing the protections.

In the latest attack on the fair business practice regulations, the House version of the Farm bill included draconian provisions to not only repeal the good provisions of the previous Farm Bill, but to force USDA to roll back existing poultry grower protections, prohibit USDA from taking any actions to enforce new protections, and to place broad limitations of authority of the Secretary of Agriculture to enforce the Packers and Stockyard Act.

What protections would the House Farm bill have halted? Here are a couple alarming examples:

Protections Against Retaliation for Farmers who Speak Out About the Abusive Practices They Experience
Poultry growers go deeply into debt, usually in excess of $1 million, to build sole-purpose chicken houses on their own farms in order to be eligible to receive a contract to grow chickens for a poultry company. The farmer usually has to put their farmland and home up as collateral for the loan. At that point, the farmer is very vulnerable economically. If their contract is cancelled or the company decides to suspend deliveries of baby chicks to their farm, they face bankruptcy. It has become very common for poultry companies to use this leverage to retaliate against farmers who speak out about the circumstances, or who organize other farmers in associations to negotiate for better contract terms. USDA tried to issue regulations to prohibit poultry companies from retaliating against farmers for exercising their legal rights. The House Farm Bill would have prohibited USDA from finalizing those protections.

Protections to Require Poultry Companies to Give Farmers 90-Day Notice before Suspending
Deliveries of Birds to their Farms
When a poultry companies decides to suspend deliveries of baby chicks to a contract poultry grower, it decimates their income and causes economic hardship. Sometime the company suspends deliveries in order to manage supplies to address downturns in demand, other times they do it to send a message to farmers who are being too vocal about the contract abuses they are experiencing. Often, the farmer has no way of knowing when the deliveries, and their income stream, will resume. USDA has issued regulations to require poultry companies to give farmers 90 days notice before suspending deliveries of birds. The House Farm Bill would have prohibited USDA from enforcing that common-sense protection.

And there are a whole host of other protections that the House Farm Bill tried to bring to a halt. But when push came to shove, and it most certainly did, the Farm Bill leaders in Congress decided to say no to the demands of the meatpackers and poultry companies. As a result, the industry lobbyists who represent those companies in Washington insisted that Congress reject the final Farm Bill. Congress rejected that demand too.

Without a doubt, this battle is not over. The livestock and poultry industry groups’ attempt to roll back the Packers and Stockyards Act in the Farm Bill is only their latest effort to avoid complying with fair business practice standards in their dealings with farmers.

But we can be very glad that Congress decided to do the right thing in this Farm bill by allowing these important protections to stand.