The following column was written by Dr. Simon Shane, Adjunct Professor, Department of Poultry Science and College of Veterinary Medicine, North Carolina State University, and was posted this week on Dr. Shane’s website

Coordinated Publicity for Proposed GIPSA Rules?

Outgoing Secretary of Agriculture, Tom Vilsack is determined to place his stamp on the structure of U.S. food production by promoting the proposed Farmer Fair Practices Rules through application of the Grain Inspection, Packers and Stockyards Administration (GIPSA) mandates.

Dr. Simon M. Shane

The proposed rules announced on December 14, were published in the Federal Register during the last week of December 2016 despite avowed opposition from Congress which has consistently deflected any previous implementation over the past six years.

As reported in CHICK-CITE, in 2010 the Department of Agriculture conducted a series of regional hearings in conjunction with the U.S. Department of Justice.  At issue was the inherent perception among the then incoming Democratic Administration that contractors in the livestock and poultry industries were exploited by integrators.

Why if conditions are so bad for growers do most companies have waiting lists for farmers wishing to erect houses and enter into grower contracts?  Why is it that the broiler industry over half a century has expanded to a current production of approximately 160 million broilers per week with over 95 percent of birds produced in grower-owned housing?

It is no accident that a news report promoting the rules appeared in the December 20 edition of the Omaha World Herald. The article deprecated the present contract system and lauded the U.S. Department of Agriculture for its concern over reducing “market power willed over growers by processors, sometimes treating them unfairly, suppressing how much they are paid or pitting them against each other.”  The article accused integrators of retaliating against growers attempting to organize to bargain for increased remuneration or to complain over contract conditions.  The question of enhancements and improvements in facilities was also raised, using the false assertion that processors “require growers to make investments that are not economically justifiable for the grower and that processors can terminate contracts with little notice.”

The Omaha World Herald article which has appeared in various forms in other media suggests a campaign by proponents of the Farmer Fair Practices Rules, if not actually originated by the USDA. It is significant that the article highlighted the invidious position of contractors supplying a single plant in a region with no other alternative producers to supply contracts. This clearly alludes to the fact that Lincoln Premium Poultry intends to establish a complex near Fremont, NE. which fails within the circulation area of the Omaha World Herald.

The USDA maintain that following a review of comments on the proposed 2010 Rules, some issues were deleted or modified with the new Rule “focusing on the most damaging unfair practices that family farms face.” The tenor of the Omaha World Herald article is that avaricious integrators exploit small family farms.  Nothing is said about the risks the integrators take placing chicks on contractor’s farms and supplying feed and undertaking the inherent uncertainties of disease, escalation in ingredient costs, export embargos and competition in the domestic marketplace.

The contract system has functioned to the mutual benefit of integrators and contractors for seven decades.  The system works well if the relationship between integrator and contractor is based on mutual respect and fair remuneration.  Upgrades are required due to both age and technical obsolescence and benefit both parties.  Integrators need diligent and industrious growers just as contractors require regular deliveries of chicks and feed, technical assistance, removal of the flock and payment within a short period thereafter.

The free market and existing laws and regulations are adequate to ensure a level playing field. If unacceptable practices occur, there are avenues to obtain resolution through existing GISPA rules and the legal system.

The proposed Farmer Fair Practices Rules are a manifestation of the socialistic views of the current President and his Secretary of Agriculture. The message which Tom Vilsack did not glean from the regional hearings and comments was “if it ain’t broken don’t try and fix it.”