The latest rule proposed by the U.S. Department of Agriculture's Grain Inspection, Packers & Stockyards Administration (GIPSA) is "ill-advised" and "unconstitutionally vague," according to comments submitted by the poultry industry to the agency.
According to the industry, the rule, which makes significant changes in the relationship between U.S. chicken companies and the farmers who grow chickens under contracts with those companies, should be withdrawn and rewritten. “GIPSA fails to provide an adequate justification for imposing such sweeping and detrimental changes to the poultry industry and does not explain corresponding benefits to counterbalance the hundreds of millions of dollars of detrimental effects this proposal will have on the U.S. economy,” said the statement, which was signed by both National Chicken Council President George Watts and U.S. Poultry & Egg Association President John Starkey.
The comments also raise concerns regarding GIPSA's proposed change from a "tournament" system of compensation, which rewards farmers based on performance, to a "base rate" system that the industry said might reduce the premiums given to more efficient growers. “The result would be increased production costs for poultry dealers coupled with a decreasing incentive for growers to deliver high quality chickens because compensation would not be tied to performance or quality,” the letter stated. The lack of an economic analysis and the concept of "competitive injury" were also addressed.