This blog was cross-posted from the Rural Advancement Foundation International (RAFI) blog.
By Sally Lee
For the sixth time, members of Congress in the Ag Appropriations Committee have blocked implementation of regulations to protect farmers through a backdoor measure. But this time, their infamous “GIPSA rider” barely passed in this House committee, as several long-time supporters voted against it. The staff at RAFI, our partners, and thousands of chicken and livestock farmers across the country will work together to get it out of the federal budget for 2017 before it becomes law in October of this year.
The news organization POLITICO ran this in their Morning Agriculture (4/21/16) briefing:
USDA: GIPSA RIDER UNACCEPTABLE: The USDA says the “GIPSA rider,” included in the House fiscal 2017 agriculture spending bill approved Tuesday, is not in the best interest of U.S. farmers, ranchers and rural communities. The rider, which would block the USDA’s Grain Inspection, Packers and Stockyards Administration from finalizing regulations designed to protect poultry farmers who contract with large processing companies that typically own the birds, “demonstrates a complete lack of concern for honest, hardworking families who raise our poultry,” spokesperson Catherine Cochran says. “The focus should be on how to ensure a fair marketplace and a level playing field for our farming families — nothing less.”
The GIPSA rider has quite a history. Members of the House Agricultural Appropriations Committee, in particular those that receive funding from the National Chicken Council and major poultry companies, squeeze this piece of legislation into the annual federal budget. It’s purpose is specifically to de-fund the Grain Inspectors Packers and Stockyards Administration’s (GIPSA) work on finalizing and enforcing rules to protect farmers. GIPSA is the agency within the US Department of Agriculture that is responsible for protecting livestock and chicken farmers from deceptive, anticompetitive, and abusive industry practices – like retaliation against a farmer for speaking out or for meeting with other farmers.
The USDA and GIPSA are poised to finalize these rules this year, thanks to a one-year reprieve in the presence of the “GIPSA rider” in the federal budget. This opportunity was largely the result of the public outcry that followed the This Week Tonight with John Oliver show’s segment on the GIPSA rider in 2015, which was seen by some 5.2 million viewers. (The show featured footage from a documentary that RAFI is producing this year, Under Contract.)
The truth is that Congress members were embarrassed by the attention to their blatant anti-farmer action, and the rider was dropped for 2016.
This time, the GIPSA rider was introduced by Rep. Andy Harris (R- MD). In his justification, he explained that he and many people in “the industry” had assumed that USDA had just “given up” on their mandate to develop rules to protect farmers.
Rep. Harris made a few comments in defense of his obstructive rider that were incredibly frustrating to chicken farmers. He claimed that 94% of the contracts are re-signed every year – a fact that in itself is confusing, since most contracts are essentially “flock-to-flock,” meaning the company does not legally promise in the contract to bring a certain number of birds in a certain number of “flocks” per year; essentially farmers are only guaranteed the first flock. But Rep. Harris went as far as to claim that this so-called fact means that 94% of the farmers are happy with their contracts.
A chicken farmer in North Carolina wrote the following to us: “Growers have no choice but to “re-sign” their contract every year, they have everything they own tied up as collateral when structuring their loan to build [chicken] houses.”
According to the USDA’s survey data, poultry and dairy are the most debt-heavy sectors in all of agriculture. On average, chicken farmers invest over $1 million to build four chicken houses, and many of the newer chicken farms today have 10 houses or more. Once a chicken farmer has signed on to the loan, there is nothing he or she can do but stay in the business, or risk losing their collateral for the loan, which is often their home or family land.
Eric Hedrick, a chicken farmer in West Virginia told us in a recent interview: “If I go under, I lose everything, all my inheritance, everything I own, it’s gone. And the company doesn’t have a dime in it. They can squeeze me, give me bad birds, do whatever they want to, and they know I’m going to continue to grow birds.”
Rep. Harris’s argument in favor of the rider made it clear that he believes that the GIPSA rules and the farmer protections they offer would make American chicken uncompetitive in a global market by removing “incentives” for farmers to raise better chickens in the tournament system.
Rep. Harris should get to know the chicken farmers better. In our work at RAFI, we have learned the reality of what a tournament contract looks like for farmers, and it isn’t just an “incentive” system. A farmer is paid per-pound for the chicken they raise. But the amount per-pound that they are paid is set according to their ranking against other farmers. The ranking is established based on how efficiently they use the company-provided feed.
The theory Rep. Harris and industry representatives maintain is that the farmers’ performance is the only thing that makes the difference in that feed efficiency. If that were true, the ranking could be a fair function of their own effort. But farmers know different. As Rep. Chellie Pingree (D-ME) pointed out in her opposition comments, there are many things that can impact the farmers’ ranking that are company controlled: different qualities of feed, diseases and other problems with young chicks, and the company’s schedule for picking up and delivering birds, for few examples.
The North Carolina farmer mentioned previously also wrote us this in response to Rep. Harris’s arguments: “With a ‘tournament contract,’ there is only one thing you can depend upon, and that is your pay can fluctuate several thousand dollars between flocks due to no fault of the grower.”
The poultry companies are not required to develop a fair payment system because there are no rules in place governing the tournament system. As it operates now, a tournament contract may be a cost-controlling mechanism for the companies, but it puts farmers on a roller-coaster of variability in pay that can cause cash-flow and credit problems. This is a far cry from the positive-sounding “incentive” system described by Rep. Harris, and it’s a precise example of why we need the USDA and GIPSA to finalize the rule-making process.
Did your representative vote against farmers?
If they supported the GIPSA rider (a Y = Yes vote), they did.
If they voted against it (a N = No vote), then they didn’t, and you can tell them thanks!
|Bishop, Jr., Georgia||D||N|
|Herrera Beutler, Washington||R||N|
|Israel, New York||D||N|
|Lowey, New York||D||N|
|Price, North Carolina||D||N|
|Serrano, New York||D||N|
|Wasserman Schultz, Florida||D||N|
|Frelinghuysen, New Jersey||R||Y|
|Harris, MD, Maryland||R||Y|
|Jenkins, West Virginia||R||Y|
|Rogers, Kentucky, Chairman||R||Y|
Sally Lee is Project Director of RAFI’s Contract Ag Reform program.