USDA faces backlash over rules it says will help poultry growers

Reuters News
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Posted: Dec 14, 2016 6:42 PM

By Tom Polansek

CHICAGO (Reuters) - The U.S. Department of Agriculture proposed rules on Wednesday it said will help protect chicken producers from mistreatment by the small group of meat companies that control most of the country's production.

With less than six weeks left to the Obama administration, the agency clarified that individual farmers who feel they have been treated unfairly do not need to show the entire poultry industry was harmed to prove wrongdoing by a processor.

Two other rules would establish criteria for determining when companies have treated producers unfairly.

Proponents of the changes, including the National Farmers Union, said they hoped Republican President-elect Donald Trump's administration would allow them to take effect, citing the support he received from rural voters in the Nov. 8 election.

However, agricultural associations opposed to the rules said the regulations were overreaching. The National Pork Producers Council, a trade group, said they were "an apparent attack on rural America for its role in helping elect Donald Trump as president."

Speaking to reporters on a conference call, USDA Secretary Tom Vilsack, a Democrat, said that accusation was "absurd."

"This has got nothing to do with the election of 2016," he said. "This has everything to do with what's fair to producers."

Vilsack said it was "common sense" to clarify how producers must prove they were harmed and that the position represented a long-held view at the USDA. The agency said it acted to clarify the rule after four courts of appeal disagreed with the rule's previous version.

Four meat processors, including Tyson Foods Inc, control 51 percent of the U.S. market for chicken meat, according to the USDA. It said they "can often wield market power over the growers, treating them unfairly, suppressing how much they are paid, or pitting them against each other."

Tyson, the top chicken producer, said the rules were "bad for farmers, food companies and consumers, and we’ll be working with others in the livestock and meat business to address it."

A spokesman for Pilgrim's Pride Corp, which is the second biggest chicken producer and mostly owned by meat packer JBS SA, did not respond to a request for comment. Mike Weaver, who raises chickens for Pilgrim's Pride and is president of the Contract Poultry Growers Association of the Virginias, said he hoped the rules would give farmers more freedom to speak out against abuses.

"Everybody needs these types of protections against these multinational companies that are running agriculture in this country," he said.

(Reporting by Tom Polansek; Editing by Phil Berlowitz)