October 23, 2017
TOPEKA — The Kansas agriculture community was divided this past week over a decision by the Trump administration to block new rules from taking effect that were intended to protect poultry producers from unfair commercial practices by food processing giants like Tyson Foods.
The rules had been proposed by a federal agency called the Grain Inspection, Packers and Stockyards Administration, or GIPSA, a division of the U.S. Department of Agriculture. They were scheduled to go into effect on Thursday.
Among other things, the new rules would have made it easier for individual poultry producers to lodge complaints against poultry companies like Tyson for unfair practices.
U.S. Sen. Pat Roberts, R-Kan., who chairs the Senate Agriculture Committee, praised the decision to block the rules.
“The Obama administration spent the better part of a decade ignoring the calls from farmers, ranchers, and agriculture economists warning of the billion dollar blow this rule would have levied against American agriculture," he said in a statement released Tuesday. "Secretary (Sonny) Perdue’s actions today demonstrate the Trump Administration’s commitment to promoting economic prosperity and reducing regulatory burdens in rural America.”
But not all agriculture groups were equally pleased with the decision. One group, the Nebraska-based Organization for Competitive Markets, called it "a slap in the face to rural America."
Don Stull, a retired anthropology professor at the University of Kansas, is vice president of that organization. He has studied the meat and poultry industry since 1986, especially poultry growers who grow for Tyson near his home community in western Kentucky, where he is half-owner of a family farm.
"I am disappointed. I’m not surprised. I don’t think anyone is truly surprised. But yes, we’re very disappointed," Stull said during a telphone interview. "Sen. Roberts has sided with the multinational agribusiness corporations to the detriment of farmers and ranchers."
Stull said that in the modern poultry industry, a company like Tyson, or any other major meat producer, will contract with a local grower to raise chickens for a certain number of weeks. The company will deliver a batch of chicks to the grower, and the grower agrees to accept a certain amount of money for every pound they put on before delivering them back to the company.
The problem, he said, is that the grower has no control over the quality of chicks he receives. They may be healthy, or they may already have bacterial infections or genetic abnormalities that cause them to die before they are delivered back.
In addition, he said, because of non-disclosure agreements in those contracts, growers have no way of knowing whether they are being paid the same rate that other growers are being paid.
A 1920s-era law called the Packers and Stockyards Act was intended to protect livestock producers from those kinds of practices, Stull said. But over the decades, regulations have been adopted favoring the meatpacking industry so that it’s nearly impossible for individual producers to file claims under the act unless they can show that a company is engaged in a practice that negatively affects competition nationwide.
"That’s impossible to show, really," Stull said. "If that rule had been implemented, then farmers would be able to go into court and lodge complaints that they had been harmfully treated, and would have been able to challenge the poultry companies in court."
Tyson, which recently cancelled plans to build a major poultry production facility near Tonganoxie, but which is still considering other locations in Kansas, strongly opposed the rules, saying in a statement posted on its website that they would increase costs for the company and consumers, and would increase the company’s exposure to litigation.
But even the U.S. and Kansas Farm Bureau organizations, which normally oppose any new federal regulations on their industries, said they hope USDA will continue working on rules to protect independent producers, although the organizations did oppose other rules that were part of the GIPSA package.
"As to the unfair and undue preferences rule, we’re encouraging the agency to continue to work toward solutions that protect our farmers and ranchers from unjust practices and strengthening GIPSA’s ability to enforce these issues," Nancy Brown, KFB’s director of policy development, said in a telephone interview.
Roberts said in a news release that he has been working to block the new rules since 2010. He said he had heard concerns about the GIPSA rules from farmers and ranchers in February during a field hearing in Manhattan about the upcoming Farm Bill reauthorization. In April 2016, he sent a letter to USDA urging the agency to reconsider issuing the rules.