The U.S. Department of Agriculture has issued a new set of rules that aims to protect farmers from anticompetitive business practices and may put an end to battles between poultry and livestock producers and the meatpacking companies buying their products.
New Rules To Help Consumers, Small Businesses And Workers
In a statement, the USDA said that the goals of the new rules include enhancing competition that can help consumers, small businesses and workers get a fair shake in the economy.
"USDA will make important progress in ensuring that farmers get a fair shake and can push back on inappropriate and unfair treatment by the processors. These are a meaningful step forward to make sure that rural Americans are getting paid what they deserve," the USDA said in a statement.
Under one of the three rules, farmers can ask for USDA intervention in instances when they think meatpackers have treated them unfairly. Previously, the farmers would have to prove that the tactics employed by the meatpackers would hurt the entire market.
Two of the other rules proposed would protect farmers from threats of retaliations should they speak out against inadequate pay and other deceptive practices, and would define unfair practices more clearly.
The USDA noted that the four biggest poultry processors are in control of over half of the market which means that poultry producers have limited options for processors to contract with. It also means that the processors are capable of suppressing and controlling how the producers are paid and even pit the producers against each other.
The system allowed the companies to have too much control over the kind of feed that the farmers use, the birds that they produce and even the pay that they receive.
New Rules To Affect Nearly 1 Million Livestock Producers
The new rules are expected to affect nearly 1 million cattle, hog and chicken producers in the United States. They are also likely to impact food giants such as Sanderson Farms Inc., Tyson Foods Inc. and JBS SA that buy the farmers' livestock.
The National Farmers Union said that the new Farmer Fair Practices Rules can protect farmers against discriminatory contract practices and level the playing field.
Critics of the new rules, however, said that these would increase the prices of meat for consumers, lead to frivolous lawsuits and even cost jobs.
"The vast majority of chicken farmers in rural America are happy and prosper raising chickens in partnership with companies, and they don't want the government meddling on their farms and telling them how they should run their businesses," said National Chicken Council President Mike Brown.