Ladies and gentlemen, start your computers!
In the second phase of the U.S. Department of Agriculture’s (USDA) campaign to fortify the U.S. Packers and Stockyards Act, the Agricultural Marketing Service (AMS) is unleashing a second round of new, paperwork and recordkeeping-heavy regulations on the U.S. poultry industry.
In October 2022, the AMS published a lengthy proposed rule “Inclusive Competition and Market Integrity under the Packers and Stockyards Act” with four stated goals:
- Protect people at higher risk of unjust treatment in the marketplace, based on their race, gender, sexual orientation and religious affiliation.
- Ban retaliatory practices to protect activities such as: communicating with government agencies, joining producer or grower associations, being a witness in a proceeding against a packer or live poultry dealer and asserting legal and contractual rights.
- Offer protection against deceptive contracts that are false, misleading and result in harm to producers.
- Inspect relevant records to better monitor compliance with the Act.
Record access
A whitepaper published by Hogan Lovells said the sweeping action would “impose a broad recordkeeping requirement on dealers, packers and swine contractors.”
The proposed rule would require the regulated entities to maintain “all records relevant to compliance with” the requirements for at least five years. This would go hand in hand with “expansive” record access by regulators of everything it considers relevant including and not limited to: “policies and procedures, staff training materials, materials informing covered producers regarding reporting mechanisms and protections, compliance testing, board of directors’ oversight materials, and the number and nature of complaints received.”
According to the regulation, a stated goal of this access is to keep an eye on the executives.
“AMS believes that its recordkeeping approach will enable it to monitor and facilitate a regulated entity’s approach to compliance at the highest levels, including the tone at the top: chief executive officers and boards of directors,” the proposed rule reads. “The tone and compliance practices set by senior executives can be expected to play a vital role in establishing a corporate culture of compliance, which is a critical defense against legal and regulatory violations.”
This broad recordkeeping and compliance requirement follows up another rule pitched by the AMS earlier in 2022 which will also require the integrated poultry industry to produce reams of new documents for its poultry growers and the G-men.
It’s hard for me to see how this part of the regulation is going to do anything but raise costs for poultry producers.
I foresee this proposal will require integrators to hire more staff to both comply with the regulations and to ensure compliance with the regulations. At the same time, it will create a new cost of recordkeeping and someone to collect and monitor those records and ensure the government can access them.
It’s a classic unfunded mandate that may well end up sending food prices higher as processors pass on the higher costs to consumers. Better still, one can wonder how this new recordkeeping requirement will directly, significantly improve the lives and livelihood of the average farmer.
It seems, to me at least, the biggest winners will be the regulators, who get a new, microscopic view of, and policing power over, animal agriculture’s human resources operations and various activist organizations that scour and use public records for their own ends.
