A bipartisan group of lawmakers is asking USDA to give poultry processors six more months to implement the department’s new regulations on producer contracts, but USDA says the requirements are "simple" and that companies don't need additional time.
Most broiler growers raise poultry under a contractual growing arrangement commonly known as a tournament system. USDA’s finalized rule requires new reporting requirements for poultry dealer companies to disclose projections of average annual gross payments to broiler growers under contract.
"The requirements of this final rule are simple: that poultry companies provide transparent information about the terms of their agreements to the farmers they contract with to raise birds and provide basic information about the inputs they provide growers in a tournament," a USDA Agricultural Marketing Service spokesperson told Agri-Pulse.
"Poultry growers have waited a long time for the basic transparency they need to avoid deception and taking on large amounts of debt on behalf of major corporations."
The current implementation date is Feb. 12. Members of the Senate Chicken Caucus and Congressional Chicken Caucus want USDA to extend that date another 180 days. In separate letters to Ag Secretary Tom Vilsack, the Senate and House groups argue the current deadline won't allow enough time to make the needed changes required to amend “nearly every contract — tens of thousands in total — in just two months over three major federal holidays.”
The House letter says, “The rule establishes numerous additional disclosure requirements, changes what provisions must be included in contracts, introduces various open-ended and novel definitions and terms, requires companies establish entire oversight systems from scratch and injects significant ambiguity regarding compliance.”
In offering just 75 days to implement the rule, “AMS has dramatically underestimated the number of people involved, hourly rates and time required of compliance officers, regulatory consultants, attorneys, executives and other services required to implement the rule,” the legislators write.
The USDA spokesperson said the proposed rule was public for more than 500 days—including more than 400 days since the proposed rule was agreed to by one of the largest integrators in a consent decree with DOJ. With the time following the November announcement of the final rule, companies will have had nearly 100 days until the effective date, AMS said.
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AMS said they're willing to work with industry and growers to answer further questions as they arise, including through a webinar on the reporting requirements of the poultry tournament rule planned for this Wednesday at 1 p.m.
"We encourage all stakeholders to stay in touch with us and to use USDA’s resources as they work towards speedy and effective implementation," said the AMS spokesperson.
The lawmakers' letters assert AMS also overlooked the “massive disruption that will be caused if companies and growers must amend nearly every existing grower contract, especially if the same exercise must be done a second time in the event AMS issues additional Packers and Stockyards rules.”
In the Biden administration's Fall 2023 unified regulatory agenda, USDA says it plans to supplement a recent revision to regulations under the Packers and Stockyards Act that promote “inclusive competition and market integration in the livestock, meats and poultry markets.”
This installment defines practices that violate the Packers and Stockyards Act based on contract formation, contract performance, contract termination and contract refusal. USDA introduced a rule in October 2022 but has yet to release a final rule.
Another P&S rule USDA has on its agenda deals with unfair practices, undue preferences and harm to competition.
The House letter, led by Congressional Chicken Caucus co-chairs Reps. Steve Womack, R, Ark., and Jim Costa, D-Calif., has 45 signatures. The Senate letter, led by caucus co-chairs Sens. Chris Coons, D-Del. and Roger Wicker, R-Miss., has 19 signatures.
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