25 August 2022

3 minute read

By: Global Ag Media

North America

In a recent press release, the National Chicken Council (NCC) voiced strong opposition to the “Transparency in Poultry Grower Contracting and Tournaments” proposed rule and called for its withdrawal, in comments filed with USDA’s Agricultural Marketing Service (AMS).

NCC said it is deeply concerned that the proposed rule would have a devastating financial impact on the US chicken industry by raising costs and administrative burdens, contributing to increased food prices for consumers, and ultimately destabilising a successful compensation system for our growers.

“This isn’t about transparency,” said NCC President Mike Brown. “This is just the first salvo in the administration’s attempts to resurrect failed policies that would dismantle a successful industry structure that has benefited growers, chicken companies and ultimately consumers all around the world. The last thing USDA should be doing is pushing increased regulations, red tape and costs onto businesses at a time of record inflation and input costs, threatening food security and potentially raising grocery bills even further for Americans.”

In the comments, NCC called for the withdrawal of the proposed rule, but also identified several issues requiring further consideration, including the following:

• Assess the true cost: AMS has failed to consider the risks of frivolous litigation, industry-wide efficiency losses, costs to farmers and consumers from new regulatory burdens, and the effects on inflation. AMS has underestimated the hourly rates, number of people involved, and time required of executives, compliance officers, regulatory consultants, attorneys, and other services required to implement the proposed rule. With supply chain disruptions, loose fiscal/monetary policy, labor shortages, rising feed costs, lingering effects of the pandemic, and geopolitical events all placing immense cost pressures on the supply chain, AMS is proposing to recklessly inject even more costs that will hurt everyone who touches chicken—growers, companies, and consumers.

• Address all Packers and Stockyards Act (PSA) amendments in a single rulemaking: AMS has positioned the proposed rule as part of a broader set of planned changes to AMS’s PSA regulation. AMS should address all amendments to PSA regulations in a single rulemaking and avoid a piecemeal approach that imposes shifting requirements and hidden costs over several years.
• Limit scope of disclosures: AMS should limit the scope of the proposed required disclosures to only information that would actually affect grower compensation expectations and omit all information that is publicly available or unrelated to compensation. Several of the proposed disclosures are unhelpful and introduce unnecessary complexity into an already highly regulated process.
• Omit the proposed governance framework and certification: AMS should omit the proposed governance framework and certification in its entirety as this proposal is an incredibly costly measure that does not provide useful information and does not address a real concern.
• Eliminate the required disclosure of forward-looking projections: All forward-looking projections should be omitted from a final rule, as they by definition cannot be accurate and risk causing significant confusion.
• Eliminate the requirement that minimum annual placements and minimum stocking densities be included in contracts: The proposal’s requirement that contracts specify minimum annual placements and minimum stocking densities goes well beyond mere disclosure, imposes terms on private contracts, and would wrongfully impede the ability to adjust to market dynamics, including pandemics, natural disasters and weather events.