Poultry growers ask for GIPSA rule finalization

Eric Hedrick shares his story on Capitol Hill of the need for rules to help protect contract farmers like himself from vertical integrators.

Jacqui Fatka, Policy editor

June 16, 2016

4 Min Read
Poultry growers ask for GIPSA rule finalization

Nestled against the George Washington National Forest, in the town of Upper Tract, W.Va., contract poultry farmer Eric Hedrick struggles to keep his family, and his 315,000 birds, healthy and fed. The largest single-owner producer in West Virginia, Hedrick has been a “contract grower” for Pilgrim’s Pride, the second largest poultry producer in the country, for 10 years. For the last six of those years, Hedrick has risked his livelihood to bring attention to the contract industry's practices.

As part of that effort, Hedrick joined on June 15 with the National Sustainable Agriculture Coalition (NSAC), the Rural Advancement Foundation International (RAFI-USA), and the Government Accountability Project (GAP) to deliver his petition, signed by 62,346 advocates, urging Congress to allow the U.S. Department of Agriculture to finalize rules protecting the rights of contract farmers like himself.

“I took a major risk in coming forward: most farmers in my situation are afraid to speak out against company wrongdoing because the poultry industry and its lobby are so powerful,” Hedrick said. “But I believe farms should be able to stand good for themselves, contract farmers should be able to make a living without fear of company retaliation. I have funneled my life savings and my kids’ life savings into our farm just to stay afloat. This is not a hobby operation, this is my full-time job, my only job.”

Contract farmers are responsible for the health and quality of the animals they raise, but they don’t own them. Pilgrim’s Pride owns Hedrick’s chickens, sets the terms for how they’re raised, decides which inputs will be provided by whom and determines how he will be paid. Under this system, the farmer owns everything that costs money (the chicken houses, the land and the equipment), while the corporate integrator owns what makes money – the chickens. According to the 2012 Census of Agriculture, 96% of chickens produced in the U.S. are raised under such contract provisions.

“Under the current system, contract farmers work without the basic rights you and I take for granted – like the right to speak freely against unjust practices, the right to trial by jury or the right to be told how your pay is calculated,” said Ferd Hoefner, policy director at NSAC. Congress needs to allow USDA’s Grain Inspection, Packers & Stockyards Administration (GIPSA) to finally move forward with rules that would ensure fair treatment and a level playing field in the contract industry; farmers shouldn’t have to wait any longer.”

On April 19, the House Agriculture Appropriations Committee passed their appropriations package for fiscal 2017. The bill included an amendment (“the GIPSA rider”) from Rep. Andy Harris (R., Md.) – which barely squeaked through passage by a one-vote margin – that prevents GIPSA from finalizing rules to protect farmers; leaving power consolidated with the big chicken corporations. In the coming weeks, the Senate is poised to pass their own version of the bill, and farmer advocates have been working overtime to ensure it does not contain any language that would prevent the GIPSA rules from moving forward.

“GIPSA is the only recourse these farmers have,” said Sally Lee, project director at RAFI-USA. "GIPSA’s role is to be the referee, to prevent deceptive and abusive practices. But a referee has to have rules to enforce. These are common sense rules that can protect farmers’ basic rights, and they are long overdue.”

Recently, several appropriations committee members, including the ranking members of the House and Senate agriculture appropriations subcommittees, voiced their support for finalizing the GIPSA rules in a letter to Agriculture Secretary Tom Vilsack. The appropriators noted that “while regulation should be limited in the marketplace, it is critical that the playing field be level”, and urged the secretary to finalize the rules.

Chicken industry responds

Tom Super, spokesman for the National Chicken Council, said that the petition doesn’t represent the sentiment of the majority of poultry farmers. “Let’s be perfectly clear:  there are no laws, regulations or "riders" that seek to take away a farmer's First Amendment rights or any other rights, or to limit in any way the many legal remedies available to protect those rights. 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.”

“It’s odd that NSAC complains that farmers have to invest in their farms but then wants farmers to have to fork over substantially more money to buy chicks, feed (the #1 input cost in raising a chicken), medicine, veterinary care, transportation and marketing, all without any guarantee they’d recoup these costs.  The most volatile input costs – i.e. corn and soybeans – are effectively hedged by the company on behalf of the farmer.  The assumption of this volatility is arguably the greatest advantage a chicken farmer enjoys,” Super added.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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