Friday, December 15, 2017

Contract farmers sue to keep rules designed to protect them from exploitation by meatpackers

In October the Department of Agriculture announced it was rolling back Obama-administration rules that provided basic legal protections for small poultry and livestock producers who are under contract with meatpackers; now an organization representing the interests of small farmers is suing USDA, Nancy Matsumoto reports for NPR.

The lawsuit was filed by three farmers and the Nebraska-based Organization for Competitive Markets, which says it represents the interests of 40,000 poultry raisers, 900,000 cattle ranchers and 70,000 hog producers under contract to meatpackers. The farmers say they're being exploited, and that the rules set by the Grain Inspection, Packers and Stockyard Administration made it easier for individual farmers to sue meatpackers for anti-competitive behavior.

"Four packers control 82 percent of the market and they've carved the country into regions and don't compete with each other," OCM Executive Director Joe Maxwell told Matsumoto. "Farmers feel threatened by packers because in their area; there's only one choice."

Farmers can also feel trapped because many have to go into substantial debt for barns and other faciliites. West Virginia poultry farmer Mike Weaver told Matsumoto that his ilk "have to put their home in hock" to raise the $1.5 million to $2 million needed to start an operation. "Then you have to take what the companies give you . . . or take your chances on losing the farm. Companies abuse that, shamefully."

Meatpackers say the rollback of the rules was fair because it discouraged farmers from filing frivolous lawsuits that cost them a lot of money to defend and result in higher meat prices for consumers. Matsumoto adds, "Another rule the USDA withdrew would have helped define which actions are considered unfair, discriminatory or deceptive. Left intact was a third rule, clarifying the rules governing the "tournament system" of poultry producing — which pits producers against each other in a contest of who can produce the biggest chickens with the least amount of feed."

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