MAY 26, 2010
www.gfb.org
Vol. 28 No. 21
GFB TELLS USDA, DOJ THAT POULTRY GROWERS NEED LONGER CONTRACTS Citing a number of factors that often leave poultry producers in a difficult economic situation, Georgia Farm Bureau President Zippy Duvall suggested longer integrator contracts and changes that would foster more bargaining power for growers in written comments submitted for a series of workshops held by the United States Department of Agriculture (USDA) and the Department of Justice (DOJ). The USDA and DOJ held the second of five public workshops on competition and regulatory issues in agriculture on May 21 at Alabama A&M University, with a focus on the poultry industry. Led by Agriculture Secretary Tom Vilsack and U.S. Attorney General Eric Holder, the workshop included roundtable discussions about the issues facing poultry producers. In his comments, Duvall emphasized that the arrangement under which poultry companies own the birds while the growers own the land, chicken houses and equipment has worked well in Georgia, which has been the top poultry-producing state for 25 years. However, he expressed concern over length of growers’ contracts with the poultry companies and the amount of input growers have in negotiating the contracts. Duvall noted that while some integrators offer purchase contracts of a year or more, those instances are not the norm. Further, because of variations in production requirements and geography, the opportunities to negotiate with competing integrators are rare. “Integrators have virtually all the bargaining power and growers have essentially none,” Duvall wrote. “It is a ‘take it or leave it’ proposition.” Duvall suggested requiring longer-term integrator contracts and for the growers to be allowed more leverage to negotiate their contracts and more meaningful input in the process. “Secretary Vilsack and I are committed to improving our understanding of how particular agricultural markets function,” said Holder, who assured growers that the Obama administration is committed to protecting competition in agricultural markets. “One thing that already is clear is that competition is crucial to ensuring opportunity and fairness in our agricultural markets.” The first workshop, held in Ankeny, Iowa, on March 12, covered issues of concern to farmers. A dairy industry workshop is scheduled for June 25 in Madison, Wis. Livestock issues will be addressed on August 27 in Fort Collins, Colo., and margins will be disucussed on Dec. 8 in Washington, D.C.