Open Markets Submits Comment to USDA on Strengthening Poultry Grower Payment Systems Rule
WASHINGTON - Open Markets Institute Food Program Manager Clare Kelloway led a comment submission to the USDA in support of the agency’s proposal to regulate unfair tournament payment systems under the “Poultry Grower Payment Systems and Capital Improvement Systems” rule.
“The current market structure and contracting norms of poultry production leave contract poultry growers vulnerable to financial ruin,” our comment reads.
Open Markets previously presented the USDA with legal justification for banning tournament payment systems outright under the Packers and Stockyards Act, and we do that again in this comment.
Short of a ban, we support USDA’s proposed reforms that would hold chicken companies accountable to compare growers fairly and give growers more knowledge to make informed financial decisions.
Our comment provides additional recommendations that would allow USDA to better enforce the Packers and Stockyards Act over powerful chicken processing companies, improve fair competition in the poultry market, and help independent growers remain viable.
In addition to ensuring fair base pay rates, the Open Markets Institute suggests that the USDA:
Limit the portion of pay that can come from performance-related bonuses, if a fair minimum base pay is established.
Ensure that poultry contracts are long enough for farmers to pay off additional capital investments demanded by chicken companies.
Establish certain thresholds that would guarantee growers a non-comparison-based payment option if they desire.
Establish that a pattern of unequal input distribution by LPDs violates the Act.
Review all new representative contracts from LPDs to ensure compliance and fair terms.
Read full comment here.