The U.S. Department of Agriculture, and other government offices, want to force integrators to disclose more information of questionable value to growers.
Paperwork
The proposed new rule says it would protect growers from potential abuses by the integrator. It would require several new financial and performance disclosures ahead of signing a new, or renewing a, contract or requiring growers to make additional capital investments. It would also require disclosures at the placement and settlement of each flock.
Sponsors of the proposal, which could be enacted soon, said this would prevent predatory and punitive practices by arming the grower with new information.
Critics of the proposal, including the industry’s voice in Washington, the National Chicken Council, say this action is onerous for the industry and discounts the business knowledge, and work satisfaction, of most poultry growers. Most importantly, it saddles both the integrator with a burden to provide reams of new paperwork and the grower with the responsibility to read it.
Half measure
The real goal of U.S. regulators is to end, or modify, the competitive pay system used by most integrators in the country. The recent settlement ahead of the merger creating Wayne-Sanderson Farms demonstrated that intent.
Under the terms of the settlement, Wayne-Sanderson Farms will establish a base pay for growers and only reward them for good performance. It cannot financially penalize growers for poor flock performance or lower their pay beyond the base pay.
Going forward, regulators could argue if the third largest integrator in the U.S. can do it and still turn a profit, then the rest of the industry can do the same.
The same settlement requires Wayne-Sanderson to make the same disclosures regulators want to make standard practice.
One executive at Wayne-Sanderson said he was unsure whether the information disclosed is actually valuable. He was certain it added new administrative work and costs for the integrator.
