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USDA Making Rule Changes Designed to Level the Playing Field

For many years, poultry growers have expressed concerns about whether the contracting and tournament system is transparent and fair. Ag Secretary Tom Vilsack says the Packers and Stockyards Act was put in place to ensure fair competition and practices in contract relationships between integrators and growers. He says USDA is announcing several rule changes to ensure fairness in those relationships.

Vilsack says, “We’re announcing the finalization of the first of a number of rules designed to strengthen the Packers and Stockyards Act efforts at providing transparency and fairness. We’re prepared to file the final rule entitled ‘Transparency in Poultry Grower Contracting and Tournaments.’ Now, this rule is directed at live poultry dealers, and that’s a technical term for poultry process integrators. And it’s designed to direct them to provide to growers critical information about contracts to the chicken grower community with whom they are contracting, and with whom they are asking birds to be raised.”

He talks about how the rule encourages transparency between contractors and producers in multiple ways. Vilsack says, “At the crux of this rule is the requirement of integrators to provide a live poultry dealer disclosure document. This document is designed to provide and outline a realistic set of outcomes that growers can expect before they make an important contracting decision or before they make key capital investment decisions. It asks for information such as the earnings by quintile that growers could expect, minimum flock placements, variable costs that may be incurred during the course of the contract, and how the integrator will exercise discretion in relationship to sick blocks or natural disasters.”

USDA and the White House are taking other steps to level the playing field in agriculture.

Vilsack says, “We’re sending a letter to major seed companies reiterating the obligation that they have to comply with the Federal Seed Act transparency requirements for seed that’s being shipped in interstate commerce. The second thing we’re doing is to clarify an issue relating to food products that are purchased by USDA. As you all may know, there is a requirement when we purchase food for food banks or for the school lunch program that the food that we’re purchasing must be of a domestic origin. We want to make sure that that is clear that when we talk about domestic origin, we’re talking about beef, pork, lamb, and bison that is born, raised, and slaughtered in the U.S.. And finally, we’re beginning the process that will lead to the appointment of a chief competition officer at USDA.”

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