New USDA Rules Excite Poultry Growers

Tyson Says Changes Will Hurt Progressive Producers

— Looming regulatory oversight sets the stage for a battleground of poultry growers applauding proposed industry rules and poultry companies resisting change.

About 100 poultry growers for Tyson Foods gathered Thursday in Green Forest to discuss proposed changes introduced by the U.S. Department of Agriculture on June 22.

The 2008 Farm Bill directed the USDA to address unfair trade practices and provide growers with key protections to mitigate biased contract provisions that can favor the corporations, said Becky Ceartas, a spokeswoman with Rural Advancement Foundation International.

BY THE NUMBERS

Chicken Impact

2: Benton and Washington county’s national rank in broiler production.

3: The number of large poultry processing companies based in Northwest Arkansas

18,000: The number of jobs in Northwest Arkansas the chicken industry provides.

$2.52 billion: Value of broiler production in Arkansas in 2009.

Source: Staff Reports

Ceartas meets with grower groups around the country to discuss the proposed regulations and help them submit their input during the open comment period that has been extended to Nov. 22.

Tyson said it favors the extension of the comment period to allow for adequate discussion with regards to the negative consequences of the proposed rules that are not in the best interests of growers, producers or consumers.

“The rule includes provisions that have been repeatedly rejected by both Congress and a legion of federal courts around the country. The government is trying to make changes that will take money out of the pockets of progressive livestock and poultry producers and redistribute it to the less competitive, less efficient producers,” said Tyson spokeswoman Libby Lawson.

But local growers say they have been asked to mortgage their futures with little guarantee from the large poultry companies for which they supply birds.

“We just want to make a fair return on our substantial investment and be adequately paid for the services we provide,” said Paul Harrison.

He moved from Texarkana to Carroll County about six years ago and purchased a large broiler farm, a financial decision Harrison regrets.

Ceartas encourages growers to use this time and opportunity granted by the federal government to be heard without fear of retaliation.

Earlier Thursday she met with a group of Hmong growers in Siloam Springs who also want to see the industry reformed.

The proposed rules provide growers with contract security and outlaw retaliation by companies when a grower speaks out.

Don McClung, a grower in Carroll County, said poultry companies have used the divide and conquer method for too long.

“People are afraid if they speak out, they will have their birds pulled,” McClung said.

The new rules will require companies to give growers at least 90 days notice before chick deliveries to their farm are suspended, as well as limit a company’s ability to cancel contracts when a grower has made major farm upgrades that were required by the company.

Ceartas said the new rules ensure contracts be long enough to allow growers to recoup at least 80 percent of their investment on upgrades required by the company.

Under the present system, growers shoulder all the debt related to their operation, including upgrades required by the poultry company. Meanwhile, they have no control over the quality of birds they get, flock size or number of flocks.

Jim Yell, a broiler grower in Lincoln, said he suffered $32,000 loss in production last year because of smaller flocks and more down time, issues totally out of his control. He has since switched companies.

Barbara Walker just purchased a $12,000 incinerator to deal with the 300 dead birds she picks up every day — higher mortality linked to the extra week she is told to keep the birds.

“We were told to build a compost shed or buy an incinerator,” she said.

Ceartas said an important provision under consideration allows contract growers to opt-out of arbitration clauses in their contract.

Tyson opposes this provision: “The only real winners under the rule are trial attorneys, who will find it easier to file frivolous lawsuits. The rule and increased litigation could also add costs, hurting consumers and the U.S. poultry industry’s ability to compete in the world marketplace.”

An Oklahoma jury returned a $7.3 million verdict in April against Tyson Foods finding the company defrauded a group of 10 McCurtain County chicken growers through a series of deceptive and coercive business practices.

Tyson is appealing the verdict.

“We rely on thousands of independent cattle, hog and poultry producers and our relationship with them is already extensively regulated. We want and need livestock and poultry producers to succeed so they can continue to supply our processing plants,” Lawson said.

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