USDA moves to protect chicken farmers

The U.S. Department of Agriculture (USDA) is playing a game of chicken with food manufacturers.

In a fight that pits small chicken farmers against much larger food processing companies, the USDA’s Grain Inspection, Packers and Stockyards Administration announced Wednesday a series of farming regulations that will “level the playing field.”

The farming rules will crack down on efforts by food processors to “bully” chicken farmers out of business, the agency said.

"For years, American farmers have been calling for protections against the most damaging, unfair and deceptive practices confronting family farms across the country," Agriculture Secretary Tom VilsackThomas James VilsackUSDA: Farm-to-school programs help schools serve healthier meals OVERNIGHT MONEY: House poised to pass debt-ceiling bill MORE said in a statement. 

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"Poultry growers, in particular, are vulnerable to market risks and concentration in the processor market,” he added. “All too often, processors and packers wield the power, and farmers carry the risk.”

At issue is an increasingly concentrated field of food producers. The USDA claims the four largest companies control more than half of the market. This gives them strong influence over the farmers from whom they get their food.

Many farmers depend on contracts with food processors to sell their products, but because the market is concentrated around a handful of processors, the USDA argues they can force farmers into bad contracts and business conditions.

“As an example of retaliatory practices, if a chicken grower attempts to organize other chicken growers to bargain for better pay or publicly expresses unhappiness with the way they are treated by a processor, processors could require growers to make investments that are not economically justifiable for the grower, or can terminate contracts with little notice,” the USDA explained.

“And because in contract growing, the processors own the birds and provide inputs like feed, they can choose to provide poultry growers with bad feed or sickly birds that have a higher mortality rate, which cuts deeply into a grower's opportunity to earn income on those birds,” the agency added.

The farming rules are intended to give more power to the chicken farmers, the agency said.

The first rule will make it easier for farmers to show they have been harmed by unfair business practices.

The second and third rules propose to establish a criteria for determining which practices are illegal and whether food processors have engaged in those activities.