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USDA Delays Fair Practice Rule for Contract Farmers


Published: Friday, April 21, 2017

DES MOINES, Iowa (AP)—A rule designed to protect the legal rights of farmers who grow chickens and hogs for the nation's largest meat processing corporations, was delayed last Wednesday by President Donald Trump's administration, halting by at least six months an initiative rolled out by President Barack Obama in his final days in office.

The rule was first proposed by the U.S. Department of Agriculture in 2010 but was met with resistance in Congress and by the meat processing industry. It was delayed until the USDA released it in December.

Scheduled to go into effect on April 22, the rule would make it easier for farmers to sue companies they contract with over unfair, discriminatory or deceptive practices. Currently, several court rulings have interpreted federal law as saying a farmer must prove a company's actions harm competition in the entire industry before a lawsuit can move forward. The rule eases that high burden of proof.

For years some chicken growers who enter long-term contracts with companies like Tyson Foods and Pilgrim's Pride have alleged the industry locks them into deals that fix their compensation at unprofitably low levels and forces them deeply into debt.

Alton Terry lost a federal lawsuit against Tyson Farms in 2010 after his contract to raise chickens was cancelled. He said it was canceled because he tried to organize farmers to protest company practices.

He ended up filing for bankruptcy.

He said many rural farmers voted for Trump believing his pledge to drain the swamp in Washington of special interests would help them. They were counting on him to approve the new rule, he said.

"There was hope that something would get done and now we see that getting him in, we're having the same old story,'' Terry said. "The swamp creatures are collecting larger paychecks. Where's the draining part?''

Genell Pridgen of Snow Hill, N.C., stopped contracting with the meat companies after 18 years and now runs her family farm independently. She fears the rule will be killed.

"It's very disheartening,'' said Pridgen, a Trump voter. "It's really an injustice for farmers who've been waiting for many years.''

Many farmers hope Trump's nominee for agriculture secretary, former Georgia Gov. Sonny Perdue, will act on their behalf, said Sally Lee, program director at the North Carolina-based Rural Advancement Foundation International-USA, a nonprofit family farm advocacy group.

Farmer advocacy groups, including the National Farmers Union and The American Farm Bureau Federation, support the rule but trade groups for the poultry and pork industries are fighting it.

"With this extension notice, it is clear the administration has recognized this is a complicated and controversial issue with deep economic consequences for

American poultry and livestock producers,'' said National Chicken Council President Mike Brown.

National Pork Producers Council President Ken Maschhoff, a pork producer from Carlyle, Ill., wants the rule withdrawn for good. He said it would reduce competition, stifle innovation and "provide no benefits to anyone other than trial lawyers and activist groups that will use the rule to attack the livestock industry.''

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