Obama Administration Strangles Poultry and Livestock Producers with New, Controversial Regulations

December 14, 2016

WASHINGTON, D.C. – The U.S. Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA) today announced controversial regulations in the waning days of the Obama administration that threaten to upend the structure of the livestock and poultry industries, raise the price of meat/poultry and cost jobs in rural America. 

The “GIPSA rules” include an interim final rule on competitive injury and two proposed rules about undue preference and the poultry grower ranking system.  All three rules have a 60-day public comment period. 

National Chicken Council President Mike Brown released the following statement in response to the release of the rules: 

“The vast majority of chicken farmers in rural America are happy and prosper raising chickens in partnership with companies, and they don’t want the government meddling on their farms and telling them how they should run their businesses.  Business under the current contract structure has given thousands and thousands of farm families the opportunity to live in rural America and operate profitable businesses that allowed them to build nice homes, expand other aspects of their farm enterprises and put their children through college.

“These rules, however, could lead to rigid, one-size-fits-all requirements on chicken growing contracts that would stifle innovation, lead to higher costs for consumers, and cost jobs by forcing the best farmers out of the chicken business.  The interim final rule on competitive injury would open the floodgates to frivolous lawsuits. 

“Some of these provisions would also have a detrimental impact on the welfare of the birds by eliminating competition and the incentive to provide the best care possible on the farm.  The performance-based contract structure of modern poultry production was instinctively designed to put the well-being of the birds as the top priority, as incentives are given to farmers who raise the healthiest birds, take risks and work hard.  It incentivizes farmers to do their best, to compete, just like every other business in America or any other free market.

“Let’s call the recently rebranded ‘Farmer Fair Practices Rules’ what they really are – the ‘Gift to Trial Lawyers Rules’ that USDA is trying to get rammed through in the last weeks of this administration, ignoring years of congressional intent in the process.  In fact, the current GOP platform on which President-elect Trump ran clearly states that, ‘We oppose the policies pushed by special interest groups seeking to stop or make more expensive our current system of safe, efficient, and humane production of meat.  Congress has repeatedly had to block the current Administration’s draconian rules concerning the marketing of poultry and livestock. This regulatory impulse must be curbed, not on a case-by-case basis, but through a fundamental restructuring of the regulatory process.’

“Today’s livestock and poultry contracting and marketing practices all remain regulated by GIPSA, which administers and enforces the Packers and Stockyards Act to protect farmers, ranchers and consumers.  Add to that every farmer’s right to go to court to challenge provisions of a contract the farmer considers unfair. 

“We will be reviewing these rules with a fine-tooth comb and providing comments to the agency.  Beyond that, all options are on the table.  We will be working with the new administration and Congress to create jobs and help rural America prosper, rather than imposing more government regulations that stifle business and growth and threaten American jobs.” 

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A study released earlier this year highlighted the benefits of the partnership between contract farmers and chicken companies.  For more information about how and why farmers and chicken companies partner to raise chickens, and to see what farmers say themselves, visit Chicken Check In.

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