USDA to Advance Rule Despite Legislation to Halt Process

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By Casey Wooten

April 20 — Agriculture Secretary Tom Vilsack said he's undeterred from finalizing rules meant to increase transparency in contracts between poultry producers and processors despite House appropriators' adopting an amendment that would bar his agency from doing so.

Approved by the House Appropriations Committee April 19, the amendment to the panel's fiscal year 2017 agriculture appropriations bill would prevent the USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) from finalizing and implementing a rule that supporters say would ensure fairness between contract farmers raising poultry and the large processors who hire them (See previous story, 04/20/16).

Chicken processors such as Tyson Foods Inc. and Perdue Farms Inc. often contract with individual farmers who raise animals owned by the company. The farmers are paid through a competitive system in which prices can be set based on the size of the livestock raised, known as the tournament system. Critics, however, say that the system is unfair, as contracts and pay vary widely and place all the risk on the producer.

The proposed rule, released in 2010, would expand the definition of unfair contracting practices, set a base price for growers of the same kind of poultry and increase transparency by requiring processors release sample contracts, among other changes.

‘Puzzling to Me.'

Vilsack told reporters April 20 following his keynote speech at the 2016 Food Tank Summit that the rule is meant to “level the playing field” for contract farmers. He called the House provision “extremely problematic.”

“It is puzzling to me, with as many farm organizations who represent farms and who speak on behalf of producers who express strong support for what we’re doing—to level the playing field, to make sure that producers are treated fairly—that the Appropriations Committee would disregard the will of its producers and maintain what is clearly an unlevel and unfair relationship,” Vilsack said.

Congress has passed similar provisions in past appropriations measures, but did not in its fiscal year 2016 omnibus legislation, leaving the door open for the USDA to complete the rulemaking process. Vilsack has said he wants to finalize the rule before the end of the Obama administration.

The appropriations bill is headed to the House floor, though leadership has not set a date for a floor vote.

To contact the reporter on this story: Casey Wooten in Washington at cwooten@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com