Relief for Chicken Farmers

Late last week, the United States Department of Agriculture (USDA) sent new rules designed to protect small-scale livestock farmers to the White House for final approval. Farmers have waited more than three years for the changes, which the USDA was directed to review in the 2008 farm bill. The rules haven’t been updated for several decades and have often gone unenforced. In the meantime, the meatpacking industry has grown more powerful, and small farmers have struggled to make ends meet. That is especially true in the chicken industry, in which farmers have basically been forced to contract with a handful of chicken-processing companies and have seen their wages decline drastically. I wrote about it last year for the Prospect in a piece called “The Serfs of Arkansas.”

The updated rules will reform the way poultry packers contract with their farmers. Before they can be issued as final, the Office of Management and Budget will determine their cost. The rules will guide the way the Grain Inspection, Packers & Stockyards Administration (GIPSA), a division of the USDA, monitors and enforces the sale of livestock by farmers to meatpackers.

But cattle and hog ranchers have long argued that the big packers in their industries are now following the same path that has led to the decline of the chicken farmer. The rules now being weighed, they say, no longer include the provisions that might have protected independent hog and cattle farmers from abusive practices—like undue price preferences given to certain farmers and case law that makes it extremely difficult for farmers to prove unfair practices in court.

The rule-rewriting process was both open and lengthy, and the USDA worked with the Department of Justice to inform both farmers and meatpackers of the changes, touring the country to get feedback. Needless to say, when the draft rules were issued last year, the reforms did not go over well with giant meatpacking companies. They mounted a full-scale attack on the new rules, which they said would be costly and bring about frivolous litigation, and they found friends in the leadership of the House Agriculture Committee after Republicans won the House in 2010. In the appropriations process in June, Republicans took away funding for the rule-writing process, which was nearly complete. Advocates had hoped the Obama administration would ignore what was happening in Congress and issue the rules as they stood.

“The exact details of the final rules are not available, but it is clear that the administration has caved to meat industry pressure to abandon independent hog and cattle producers to unfair treatment at the hands of the large meatpackers,” Wenonah Hauter, executive director of Food & Water Watch, said in a statement. “Cattle and hog producers should not have to wait another year or two for USDA to consider what is fair and unfair pricing; they have already waited more than 90 years since the Packers & Stockyards Act directed the agency to prevent unfair meatpacker abuses in 1921.”

Any of the rules that aren’t finalized will remain “under consideration.” Ferd Hoefner, the policy director for the National Sustainable Agriculture Coalition, says it’s going too far to say that the administration has completely caved in. The rules to protect independent hog and cattle farmers aren’t completely dead—yet —but they won’t be final anytime soon. “It’s definitely cause for great concern to think about them starting the rule-making process over again, on something that Congress asked them to do in 2008.”

It’s likely that Republican-led re-evaluations of the costs of the bill helped stall these, and a few other, provisions. But the continuing fight over the rules should provide ample fodder for the farm bill debate, set to launch when the draft bill is released soon.

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