The Campaign for Contract Agriculture Reform is a national alliance of organizations working to provide a voice for farmers and ranchers involved in contract agriculture, as well as the communities in which they live. The goal of the campaign is to assure that the processor-producer relationship serves as a fair partnership, rather than a dictatorship.
USDA estimated in 1998 that approximately 35% of all agricultural production was produced under contract. This trend is rapidly spreading from poultry to hogs to tobacco to specialty crops and grains. Unfortunately, these agricultural contracts are developed in an environment in which the corporate processors, handlers, packers or buyers have monopoly-like market power and farmers have almost no legal protection.
The result is a growing imbalance in market power between the family farmer and agribusiness corporations, which is depressing farm income and threatening the economic viability and environmental health of our rural communities. Fairness in contracts is impossible when individual producers have no power to negotiate terms or to protect themselves against fraud, retaliation or discrimination.
Farm policies that can help to balance the contract relationship include:
Amend the Agricultural Fair Practices Act to protect the ability of farmers to negotiate fair contracts with processors.
Such an amendment enhances the power of producers and their cooperatives to stabilize farm income by providing mutual obligations for good faith bargaining. This amendment gives marketing cooperatives the leverage to compel negotiations, providing participation in contract development reflective of the farmers’ economic investments. Any such amendment must also include strengthen the enforcement ability of the Secretary of Agriculture.
Amend to the Packers and Stockyards Act to provide enforcement authority for GIPSA over all live poultry operations.
Poultry production is almost totally contract based. Despite evidence of the contract being used as a tool to intimidate, retaliate and reduce growers profits to poverty levels, the Grain, Inspection, Packers and Stockyards Administration (GIPSA) does not have the authority to take administrative action and protect growers by halting unfair practices or penalizing poultry companies that violate the law. An amendment to provide GIPSA with the necessary enforcement authority over poultry cases would simply bring poultry in line with other livestock within the Packers and Stockyards Act.