New USDA rule enhances fairness for contract poultry growers
In a major reform under the Packers and Stockyards Act, the USDA has finalized new rules to improve fairness and transparency in the poultry industry. The changes aim to address issues like forced capital investments and unstable payment systems for contract poultry growers.
The new rule requires poultry companies to provide a clear base pay rate in grower contracts and prohibits unfair deductions. Performance bonuses are allowed, but companies must ensure fairness in how payments are calculated and compared among growers.
Highlighting the significance, Steve Etka, Policy Director for the Campaign for Contract Agriculture Reform (CCAR), said, “This rule establishes some important guardrails around the ‘tournament’ payment system to end deceptive aspects of the system and require the use of commonsense fair business practices.”
The reform also requires companies to disclose the financial implications of expensive capital upgrades, allowing growers to make informed decisions. This builds on previous USDA rules emphasizing transparency in contracts and payment methods.
These changes follow the 2022 U.S. Department of Justice Consent Decree, addressing abusive practices in the poultry industry. Together, these efforts create a more equitable framework for farmers while upholding industry standards.
For more information, visit the USDA official site.