USDA: Final Rule to Improve Transparency and Equity

US - Agriculture Secretary Tom Vilsack announced that USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) will publish a final rule to increase fairness and equity in the poultry industry by amending regulations under the Packers and Stockyards Act of 1921 to provide poultry growers with new information and improve transparency in poultry growing arrangements.
calendar icon 3 December 2009
clock icon 3 minute read

"The Obama Administration is committed to ensuring that the marketplace for our farmers and ranchers is free from unfair and deceptive practices," said Secretary Vilsack. "This new rule will provide much-needed information and basic protections for poultry growers that will enable them to make better business decisions and safeguard their livelihood."

Under the new regulations, a poultry grower must be provided a true written copy of a poultry growing arrangement in a timely manner. The poultry growing arrangement must include information about any Performance Improvement Plans and provisions for written termination notices of the arrangement. And, notwithstanding confidentiality provisions, the rule allows growers to discuss the terms of poultry growing arrangements with designated individuals. The proposed rule was published 1 August 2007.

Failure to disclose certain terms in a poultry growing arrangement constitutes an unfair, discriminatory, or deceptive practice in violation of section 202 (7 USC 192) of the Packers and Stockyards Act.

Bob Stallman, president of the American Farm Bureau Federation (AFBF), was pleased with the announcement. “We appreciate the leadership of Secretary Vilsack and the support of USDA for these new regulations that will ensure greater market fairness and transparency for America’s poultry producers," he said.

Mr Stallman said the rules are vital for helping poultry producers make sound business decisions that will protect their livelihoods. he also said the rules ensure that producers will receive a true written copy of a poultry-growing arrangement in a timely manner.

"The rules provide much needed legal protection, fairness and open communication for poultry producers when dealing with poultry dealers who buy their chickens," Mr Stallman said.

“These new regulations require a written ‘growout’ contract to be delivered at the same time as poultry building specifications are delivered. This is a most needed and welcome change. In addition, new rules also allow poultry producers to discuss the written contract with lenders, accountants and attorneys before executing the contract. Thanks to the support of USDA, poultry producers can now be sure they more fully comprehend a contract that represents a very sizable investment. A producer who understands the content of the contract will be a producer better able to satisfy the contract’s terms, which is positive for both the producer and the contractor," Mr Stallman concluded.

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