A new USDA rule will require poultry processors to give farmers more information about what to expect, including potential income and expenses, before they sign a contract to raise birds for them, said Agriculture Secretary Tom Vilsack on Wednesday. The rule, expected to take effect in late January, was part of an administration drive for the fair treatment of farmers in the highly concentrated meat industry.
“This is the first of several rules we will be finalizing over the next several weeks,” said Vilsack during a teleconference. The poultry rule was part of a trio unveiled in early 2022. The other rules would make it easier for a producer to prove unfair treatment by a processor and would update USDA definitions of unfair and deceptive practices, undue preferences, and unjust practices by processors.
Vilsack also said he had created the senior-level post of chief competition officer, to be held by a career employee, to enhance the implementation of USDA competition policies and to work with state and federal officials, including the Justice Department, on those policies.
The poultry rule, to take effect 75 days after it appears in the Federal Register, requires processors to give farmers a document that shows potential earnings, variable costs, minimum flock placements, and how the processor will resolve such issues as sick flocks and natural disasters. A different disclosure document will be required if growers will be part of a “tournament” system that pits producers against each other in a competition for income.
“It’s high time that poultry growers get the benefit of robust transparency — upfront and ongoing, to clean up the broiler chicken market’s deceptive practices,” said Andy Green, USDA competition adviser.
Farm groups applauded the rule as a first step to bringing transparency to opaque and secretive poultry contracts. “Without a doubt, a full-scale reform of the poultry payment system is needed, but this rule is a very important and welcomed step toward that goal,” said the Campaign for Contract Agriculture Reform. The group says farmers may go into debt to build chicken barns that satisfy a processor’s specifications without a guarantee of returns; processors provide the chickens and supplies that can determine a farmer’s success in speedily raising chickens to slaughter weight. “USDA must do more to actually protect farmers from corporate abuse, beyond merely informing producers how exploitive the system is,” said Food and Water Watch, a consumer group.
In addition, the USDA has clarified its requirement that the meat it purchases for public nutrition programs is of domestic origin. “There seems to be a lack of understanding,” said Vilsack, that domestic origin means meat from animals born, raised, and slaughtered in the United States. The USDA spent $800 million last year on meat purchases. In March, the Food Safety and Inspection Service proposed a rule change that would restrict using “Product of USA” labels to meat from animals born, raised, and slaughtered in America. At present the label can be used on imported meat that is processed in the United States.
Also during the teleconference, Vilsack said the USDA had sent letters to seed companies urging them to provide full information about their seed varieties to farmers at the time of purchase.
A prepublication version of the poultry rule is available here. It would take effect 75 days after appearing in the Federal Register, possibly as soon as later this week.