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Fairer Deals in Future for Growers

by 5m Editor
11 December 2009, at 10:19am

US - An advocacy group has welcomed new regulations for growers covering their contracts with poultry processors.

An advocacy group is applauding new federal regulations designed to protect poultry farmers in contract talks with processors.

Fayetteville Observer reports that the regulations from the US Department of Agriculture, issued earlier this month, require processors to provide written contract offers before farmers invest in new poultry houses, according to Rural Advancement Foundation International USA, a Pittsboro-based advocacy group.

Contract poultry farmers invest their own money to build and upgrade poultry barns to processor specifications. A typical chicken house costs $300,000 to build. Most processors encourage growers to build at least four houses, for an investment of more than $1 million.

The rules allow farmers to discuss contract offers with government agencies, family members, business associates and others before signing a contract.

If farmers are put on an improvement plan by a processor, they must be told why, what steps will be taken to help them improve, and how they can regain good standing.

"I'm glad that USDA is taking action to protect growers," Cameron farmer, Kay Doby, said in a RAFI news release.

Ms Doby raised chickens until Pilgrim's Pride Corp. terminated the contracts of 45 growers in October.

"When the company terminated some farmers' contracts, they were ready to receive their next flock of chickens," she told Fayetteville Observer. "Instead of chickens, they received a termination notice. We had no warning. No one should be in that situation."

Becky Ceartas, RAFI's director of contract agriculture reform, said the rules increase fairness and transparency.

"Before farmers make the financial commitment to build poultry facilities on their farms, they need to know exactly what's expected and what the terms of that arrangement will be," said Ms Ceartas. "An informed farmer can make better decisions, and that benefits everyone."