SAINT PAUL, Minn. — The USDA’s proposal Thursday to address the highly controversial “tournament system” in poultry production is a positive, yet overdue, step forward as the agency seeks to address unfair competition and trade practices under the Packers and Stockyards Act, according to members of the Minnesota-based Land Stewardship Project (LSP).
“Corporate ag has monopolized all aspects of the livestock industry,” said Bonnie Haugen, a livestock farmer and LSP member from Canton, Minn. “It is taking our livelihoods, shrinking consumer choices and raising consumer costs. Corporate ag wants serfs, not independent farmers.”
Currently, poultry processors exert control over much of the process of raising chickens through take-it-or-leave-it contracts with growers. Under these contracts, processors provide inputs like chickens and feed to poultry growers. Poultry growers, who often take on debt to build growing facilities, have limited access to information on the real range of outcomes and risks they face under these contracts. Moreover, once enrolled in the contracts, the processors then determine the payments that poultry growers receive for their services by weighing the chickens and ranking farmers based on how much the chickens grew. Pay is generally determined based on how a farmer compares to other farmers, but farmers currently have little insight into this comparison. Growers have long complained that the so-called “tournament” system is ripe for abuse.
This proposed rule could provide transparency in an industry that often benefits large corporations by leaving producers in the dark, according to LSP policy organizer Sarah Goldman. The USDA is proposing requiring poultry processors to release key information to farmers at several critical steps. For example, processors would be required to disclose details of the inputs they provided to each farmer and information about the input differences among farmers being ranked. Contracts would also be required to contain guaranteed annual flock placements and density. The USDA is also opening an inquiry into whether some practices of processors in the tournament system should be banned or otherwise regulated.
Thursday’s action is the first of three rulemakings that USDA will issue under the Packers and Stockyards Act under President Joe Biden’s executive order calling for a stop to unfair, deceptive, discriminatory and anticompetitive practices in the meat and poultry industry.
The Land Stewardship Project is heartened by these recent USDA announcements, said Goldman, adding the caveat that in order to meaningfully address corporate consolidation throughout the livestock industry, the USDA needs to finish the other rules under the Packers and Stockyards Act that address additional abuses in the livestock sector. Congress also needs to pass significant reforms such as spot market requirements and reinstating the mandatory Country of Origin Labeling requirement that was proposed under initiatives such as the American Beef Labeling Act.
“This new rule proposal alone is not enough,” said Goldman. “To address the exploitation endemic to the poultry industry, tournament pricing should be banned outright. And to address the exploitation that characterizes all other aspects of the livestock industry, we need other significant reforms.”