August 24, 2022

 

US' largest broiler association voices opposition to proposed poultry contracting rule

 

 

The National Chicken Council (NCC) in the United States voiced strong opposition on August 23 to the "Transparency in Poultry Grower Contracting and Tournaments" proposed rule and called for its withdrawal, in comments filed with United States Department of Agriculture's Agricultural Marketing Service (AMS).

 

NCC said it is deeply concerned that the proposed rule would have a devastating financial impact on the US chicken industry by raising costs and administrative burdens, contributing to increased food prices for consumers and, ultimately, destabilising a successful compensation system for the country's growers.

 

"This isn't about transparency," said NCC president Mike Brown. "This is just the first salvo in the administration's attempts to resurrect failed policies that would dismantle a successful industry structure that has benefited growers, chicken companies and ultimately, consumers all around the world. The last thing USDA should be doing is pushing increased regulations, red tape and costs onto businesses at a time of record inflation and input costs, threatening food security and potentially raising grocery bills even further for Americans."

 

In the comments, the NCC called for the withdrawal of the proposed rule, but also identified several issues requiring further consideration, including the following:

 

- The NCC argued that AMS has failed to consider the risks of frivolous litigation, industry-wide efficiency losses, costs to farmers and consumers from new regulatory burdens, and the effects on inflation. AMS was said to have underestimated the hourly rates, number of people involved and time required of executives, compliance officers, regulatory consultants, attorneys and other services required to implement the proposed rule. According to the NCC, with supply chain disruptions, loose fiscal/monetary policy, labor shortages, rising feed costs, lingering effects of the pandemic and geopolitical events all placing immense cost pressures on the supply chain, AMS is proposing to recklessly inject even more costs that will affect everyone who are involved in chicken production — growers, companies, and consumers;

 

    - The NCC argued that AMS has positioned the proposed rule as part of a broader set of planned changes to AMS's PSA regulation.  The NCC added that AMS should address all amendments to PSA regulations in a single rulemaking and avoid a piecemeal approach that imposes shifting requirements and hidden costs over several years;

 

    - The NCC suggested that AMS should limit the scope of the proposed required disclosures to only information that would actually affect grower compensation expectations and omit all information that is publicly available or unrelated to compensation. Several of the proposed disclosures are unhelpful and introduce unnecessary complexity into an already highly regulated process;

    - The NCC suggested that AMS should omit the proposed governance framework and certification in its entirety as this proposal is a very costly measure that does not provide useful information and does not address a real concern;

 

    - The NCC said that all forward-looking projections should be omitted from a final rule, as they, by definition, cannot be accurate and risk causing significant confusion;

 

    - The NCC said the proposal's requirement that contracts specify minimum annual placements and minimum stocking densities goes well beyond mere disclosure, imposes terms on private contracts and would wrongfully impede the ability to adjust to market dynamics, including pandemics, natural disasters and weather events.

 

- NCC