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Final Rule Regarding Poultry Contracts Issued

by 5m Editor
7 December 2009, at 11:05a.m.

US - The Grain Inspection, Packers and Stockyards Administration (GIPSA) has issued a final rule regarding the initiation, performance and termination of poultry contracts.

The rule adds several new provisions to section 201.100 of the regulations, Records to be Furnished to Poultry Growers.

Specifically, the rule requires live poultry dealers who offer a poultry growing arrangement to a poultry grower to provide the grower with a “true written copy” of the offered poultry growing arrangement on the date the grower is provided the poultry house specifications. In addition, live poultry dealers must allow growers to “discuss the terms of a poultry growing arrangement offer” with a federal or state agency, the grower’s financial advisor or lender or legal advisor, an accounting services representative hired by the grower, other growers for the same live poultry dealer, a member of the grower’s immediate family or a business associate.

The rule also requires that contracts disclose whether there is a performance improvement plan and if so the guidelines of such plan must be outlined, including: “factors considered when placing a poultry grower on a performance improvement plan; …the guidance and support provided to a poultry grower while on a performance improvement plan; and … the factors considered to determine if and when a poultry grower is removed from the performance improvement plan and placed back in good standing, or when the poultry growing arrangement will be terminated.”

In addition, the rule includes provisions that a live poultry dealer must follow when ending a poultry growing arrangement with a poultry grower. A live poultry dealer must provide the grower with “a written termination notice at least 90 days prior to the termination of the poultry growing arrangement” and that notice must contain the reason or reasons for termination, when the termination is effective and inform the grower of any rights to appeal. A poultry growing arrangement must also provide the grower with the opportunity to “terminate the poultry growing arrangement in writing at least 90 days prior to the termination of the poultry growing arrangement.”