News Release: NSAC Applauds Proposed Rule to Reform Poultry Tournament Payment System

News Release: NSAC Applauds Proposed Rule to Reform Poultry Tournament Payment System

June 8, 2022


Contact: Laura Zaks

National Coalition for Sustainable Agriculture

[email protected]

Such. 347.563.6408

News Release: NSAC Applauds Proposed Rule to Reform Poultry Tournament Payment System

Reforms would bring more transparency and fairness to contract poultry farmers

Washington, DC, June 8, 2022 – Today, the National Coalition for Sustainable Agriculture applauded Agriculture Secretary Tom Vilsack for releasing a long-awaited proposed rule regarding “transparency in poultry farming contracts and tournaments” . It is the first of several rules expected to strengthen the century-old Packers and Stockyards Act (PSA) announced in President Biden’s Executive Order on Promoting Competition in the U.S. Economy.

“The National Sustainable Agriculture Coalition (NSAC) applauds this long-delayed step towards leveling the playing field for family farmers and rural communities and improving the poultry sector. Today in the United States, just four companies account for 73% of beef processing, 67% of pork processing, 54% of chicken processing, and 45% of the retail grocery market. This concentration harms farmers and consumers while returning maximum profits to corporations. Farmers deserve a just shake. said NSAC Policy Specialist Billy Hackett.

The poultry tournament system pits farmer against farmer, ensuring that half of all breeders in the tournament will always lose, and bases the selection of winners and losers on factors beyond the contracted producers’ control and determined solely by the large chicken companies (eg feed and chick quality). Integrators have been known to manipulate both of these variables to punish contract growers who have spoken out against industry abuses, almost consistently against farmers of color, illustrating the need for the proposed rule to prohibit retaliation. against producers.

“The proposed rule of ‘transparency in poultry breeding contracts and tournaments’ will improve the poultry payment system by guaranteeing important transparency measures for producers. This rule, however, does nothing to address the fundamental structural problems of the poultry tournament system.,” added hacker.

Specifically, the transparency measures announced in the proposed rule include:

  • Require poultry companies to disclose the number of flocks and minimum flock density they will contractually guarantee annually, as well as any “farm sale” policies.
  • Require poultry companies, when finalizing a new contract, to disclose to potential producers the income range, broken down by quintiles, of current producers in a potential producer’s region.
  • Require poultry companies to disclose information to farmers about the quality of inputs they have provided and any relevant feed deviations, both when inputs are delivered and on settlement sheets, when farmers receive their salary.
  • Require poultry companies to provide each breeder with anonymized information on the quality of inputs provided to all other breeders in their “tournament group” on rule sheets.
  • Require poultry companies to disclose how their tournament system formulas account for variability in input quality.
  • Require CEOs of poultry companies to sign agreements that require the implementation of internal control frameworks necessary to provide accurate information and compliance with USDA audits of disclosed data.

The PSA was adopted a century ago to combat anti-competitive practices in the livestock and poultry industries, as meat packing and processing companies (also known as integrators) consolidated and accumulated substantial power over the producers. The commitment to begin a new rule-making process to strengthen the PSA follows an announcement by the United States Department of Agriculture (USDA) last year.

The USDA also issued a Notice of Proposed Rulemaking today. The aim is to gather feedback in response to the many complaints from poultry farmers regarding the use of tournament systems. Comments in response to this request would help AMS adapt other rules in addition to those already planned and in progress to meet specific industry practices with respect to tournament systems.

The USDA is seeking public comment on the proposed rule and the advance notice of proposed rulemaking. Comment periods end August 8, 2022.

For more on cattle consolidation and concentration reform, read the NSAC blog series.


About the National Sustainable Agriculture Coalition (NSAC)

The National Sustainable Agriculture Coalition is a grassroots alliance that advocates for federal policy reform supporting the long-term social, economic, and environmental sustainability of agriculture, natural resources, and rural communities. Learn more:

Categories: Competition & Antitrust, Implementation & Rulemaking, Press Releases, Sustainable Farming

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