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Fairness in Contracting Legislation Passes in GA:
Despite Fierce Opposition from the GA Poultry Federation and Threats of
Company Pull Outs
By Laura Klauke, RAFI-USA Program Director, Contract
Ag Reform Project
Georgia House Bill 648, which provides for the regulation
of poultry contracts and the enforcement of fair contract standards, passed
the Georgia House of Representatives with an 111 to 62 vote in February
and the Georgia Senate with an equally impressive 35 to 16 final floor
vote this April. The bill is now awaiting Governor Sonny Perdue's signature.
The Georgia Poultry Federation adamantly opposed the bill and afterit
passed the House hired 8 additional lobbyists to fight it. Pushing for
a veto, the Georgia Poultry Federation is now arranging private meetings
between company representatives and Governor Perdue.
Poultry growers and supporters are working the phones to let Governor
Perdue know the broad base of support for fairness in contracting among
farmers and voters in the state.
Though the bill was watered down somewhat through the political
process, it still contains several critical standards for fairness in
poultry contracts. In particular, House Bill 648 provides:
1. A grower must be afforded the opportunity to
review a contract outside the business premises of the integrator
with an attorney or adviser of the contract producer's choosing
for at least three business days prior to execution,
2. A contract grower shall have a right to cancel a production contract
up to three days after signing the contract without penalty.
3. Integrators shall provide to contract growers any statistical
information and data used to determine compensation (other than
a trade secret).
4. Any contract grower or grower designee shall have the right to
be present at the weighing of poultry, present at the weighing of
feed delivered by the integrator, and observe the weights and measures
used to determine compensation. |
Beyond the protections it wins for growers, the bill is also
significant because it is the first such bill to pass in "chicken
country." In 1995, the Georgia General Assembly declared Georgia
the official Poultry Capital of the World. While per capita chicken consumption
has doubled since 1978, Georgia's production has tripled. There are more
than 12,000 chicken houses and more than 40 processing plants in the state.
(University of Georgia, College of Agricultural and Environmental Sciences
Poultry.)
Not surprisingly, right before a critical meeting of the Senate Agriculture
Committee, rumors were circulated that an unnamed poultry company was
considering expanding operations into Georgia but would pull out if the
bill passed. Growers were quickly able to connect the rumor to Sanderson
Farms, the sixth largest poultry processor in the nation.
Sanderson Farms is considering building an integrated poultry complex
in southern Georgia and would contract with approximately 130 poultry
farmers (including broiler, pullet and breeder operations). However, Sanderson
Farms had begun holding public meetings after the bill had passed the
House and the passage in Senate has had no effect on their public recruitment
efforts.
Community support, sufficient farmer interest, and available financing
will ultimately be the determining factors for Sanderson Farm's expansion
into Georgia. One indication of the challenge of getting past these barriers
is the fact Sanderson has promised a fifteen year contract - a significantly
higher difference from the industry norm. (There has been no legal review
of the contract to analyze the real strength of any time commitment.)
Activists in the state credit this win for contract fairness to many things
- a core of dedicated of legislative champions in both the House and Senate,
including the Chair of the Georgia House Agriculture Committee; a broad
base of organizational support for the bill including the United Poultry
Growers Association, the Georgia Poultry Justice Alliance, and the Georgia
Farm Bureau; and the ability to find workable compromises through the
political process.
But legislators and activists alike noted that the most important element
of the success was the willingness of Georgia poultry farmers to make
calls and visits. Ultimately, it was the voice of hundreds of farmers
educating legislators about the realities of the current contract relationship
and demanding fair treatment that made the difference.
For more info:
United Poultry Growers Association www.unitdpoultrygrowers.com Fax: (229)
883-8881 email: upga@unitedpoultrygrowers.com
or
Georgia Poultry Justice Alliance Rosalyn Evans, Executive Director gpja501@hotmail.com.
To see the full text of the bill: http://www.legis.state.ga.us/legis/2003_04/versions/hb648_HB_648_AP_8.htm |
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North Carolina Tobacco Farmers Begin Putting Cost-share Grants
to Work
By Jason Roehrig, RAFI-USA Program Director, Tobacco
Community Reinvestment Fund
RAFI-USA recently announced the award winners for the 2004-5
Tobacco Communities Reinvestment Fund Producer and Community Grants. The
Reinvestment Fund is supported by the Tobacco Trust Fund Commission and
was created to help farmers develop new enterprises which demonstrate
innovative ways to replace lost tobacco income. Even though it is still
early in the growing season, the demonstration grant recipients are off
to promising starts on their projects.
Kay and Michael Winn of Rich Square in Northampton County received a grant
to develop alternative value-added markets for their flock of grass-fed
hair sheep. The Winns began building their flock of hair sheep a few years
ago as a complement to their growing hay operation. Unlike traditional
wool varieties, hair sheep don't require shearing, reducing production
costs for the farmer. They are also hardier than wool varieties, produce
high quality meat, and follow more favorable breeding cycles.
In order to reduce their dependence on a single market and increase the
value they are getting for their animals, the Winns decided to diversify
their marketing efforts. They have been selling the animals live at local
livestock auctions, but are now pursuing butchers, restaurants, and direct
sales to individuals at farmers markets. The grant from the Tobacco Communities
Reinvestment Fund is helping with the purchase of a refrigerated trailer,
so that the fresh lamb can be safely transported between the processor
and various markets around the state.
So far, the Winn's idea has been working out. They donated a lamb to a
benefit dinner held in March at Panzanella in Carrboro. The lamb met with
rave reviews from both diners and restaurant staff and may become a regular
feature on the Panzanella menu. They hope to identify other Triangle establishments
interested in purchasing their lamb as well. Later this summer, they will
be testing out customer demand at the Roanoke-Chowan Farm and Garden Market.
The Winns look forward to hosting field days on their farm. They are planning
to try out some innovative pasture management techniques to better maintain
the health of their flock without chemicals and antibiotics. The Winns
see a lot of potential for increase in hair sheep production in North
Carolina and are excited to share their experiences with other farmers.
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Recognition of the Potential for Misuse of Mandatory Arbitration
Clause Grows: Freddie Mac, Fannie Mae Reject Forced Arbitration in Home
Mortgages
By Laura Klauke, RAFI-USA Program Director, Contract
Ag Reform Project
In December, Freddie Mac announced that as of August 2004
it would no longer invest in subprime mortgages containing mandatory arbitration
clauses. This policy is aligned with the corporation's existing prohibition
on the use of mandatory arbitration for prime market mortgage investments.
In February, Fannie Mae adopted the same stance on subprime mortgages
with mandatory arbitration clauses. Fannie Mae and Freddie Mac are the
two largest U.S. buyers of home mortgages.
In comments praising Freddie Mac's decision, Martin Eakes, CEO of the
Center for Responsible Lending noted, "In recent years, the inclusion
of mandatory arbitration language in a mortgage contract has become increasingly
common, especially in the subprime mortgage market. Each day, many Americans
unknowingly sign loan contracts that prevent them from protecting their
homes against predatory lending. These clauses deny access to justice
for homeowners by raising the cost of asserting their rights, stripping
them of their day in court in front of a jury of their peers, and tilting
the scales to favor lenders."
The Department of Housing and Urban Development, the Department of the
Treasury and the Federal Trade Commission have recommended prohibiting
mandatory arbitration agreements in the Home Ownership and Equity Protection
Act (HOEPA) or for high-cost home loans. Moreover, Congress has recently
chosen to prohibit the use of mandatory arbitration clauses in other commercial
contexts, specifically in contracts between car manufactures and dealers.
In an effort to prevent abusive forced arbitration in agricultural contracts,
Senators Grassley (R- IA) and Feingold (D-WI) have introduced a bill that
would keep arbitration voluntary in livestock and poultry contracts, the
Fair Contracts for Growers Act (S. 91). The bill would simply require
both parties to a livestock or poultry contract to agree in writing to
pursue arbitration after a dispute arises. This assures that both parties
agree to pursue arbitration voluntarily, instead of allowing one party
to be forced to waive their legal protections under duress, leaving themselves
open to future fraud and abuse.
Currently, the Campaign for Contract Agriculture Reform is spearheading
grassroots efforts to enhance the list of cosponsors and pursue opportunities
to move the fair contracts legislation through congress.
For more information on the Fair Contracts for Growers Act (S. 91) contact
Laura Klauke of the RAFI-USA Contract Agriculture Reform Program (919-845-4615)
or visit the RAFI-USA Contract
Agriculture Reform Program
web page.
For more information on the decisions of Freddie Mac and Frannie Mae:
http://www.predatorylending.org/news_headlines/fanniemae020404.cfm.
http://www.freddiemac.com/news/archives/afford_housing/2003/consumer_120403.htm
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