Concern is growing over coercion in USDA chicken rule- POLITICO

Concern is growing over coercion in USDA chicken rule- POLITICO


PROGRAMMING NOTE: Morning Agriculture won’t publish from Monday, Aug. 29, to Monday, Sept. 5. We’ll be back on our normal schedule on Tuesday, Sept. 6.

With help from Marcia Brown, Meredith Lee and Cristina Rivero

Former chicken farmers and their advocates are accusing major poultry companies of trying to influence poultry farmers during the comment period of a proposed USDA rule.

The White House hunger conference is right around the corner, but insiders say planning calls for it are sporadic at best. The tentative date is set for the last week of September.

It’s been about a year since Danone announced it would exit from New England organic dairy markets. The milk giant notified 89 organic dairy farms their contracts would be terminated as Horizon Organic turned toward larger dairy farms in the Midwest.

HAPPY MONDAY, AUG. 22. Welcome to Morning Ag. I’m your host, Garrett Downs, back from vacation. Tips? Send them along to [email protected] and @_garrettdowns and follow us at @Morning_Ag.

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ADVOCATES AND USDA WARN AGAINST POULTRY COERCION: Advocates and former growers are accusing some of the country’s largest poultry companies of pressing farmers to oppose a proposed USDA rule they say could help raise their pay and give them more control over their farms, Marcia reports.

Context: At issue is a proposed USDA rule that would make contracts more transparent for farmers that raise chickens for poultry processing companies. The farmers are paid through the “tournament system,” where high performers earn bonuses and poor performers are penalized.

The proposed rule, published in May, is the first of three USDA has said are necessary to strengthen the nation’s antitrust laws among an increasingly concentrated agricultural industry.

The proposed rule does not eliminate the tournament system, but would require companies to disclose the true top and bottom incomes a grower could earn.

First in MA: Competition advocates and independent farmer groups argue the proposed rule does not go far enough. In a forthcoming public comment first shared with MA, the Government Accountability Project (GAP) is alleging that the tournament system enables companies to outsource the risk to growers and use their farms for “mandatory trial-and-error” research. If the experiment goes poorly, farmers eat the losses via docked pay in the tournament system. Examples include requiring expensive, unproven updates in chicken houses such as windows and the transition to “no antibiotics ever.”

Rudy Howell, a former contract grower in North Carolina, told MA that installing windows—however well-intentioned—has failed in his experience and farmers would bear the cost. He said when filling up the feed bins at night “the shadows would scare the heck out of the chickens and they would pile up and suffocate.”

The National Chicken Council declined to comment on GAP’s comments but asserted that poultry companies—not farmers—take on most of the risk in raising chickens. “The structure of the industry was explicitly designed for the company to bear most of the risk,” Tom Super, NCC spokesperson wrote in a statement. “Studies have shown that chicken companies remove about 97% of the economic risk farmers face in raising a flock compared to independent growers.”

Public comment campaign: As Marcia reported, chicken processor Mountaire Farms, a privately-held company which describes itself as the nation’s fourth-largest chicken processor, provided growers with form letters and step-by-step instructions on how to submit the comments, according to documents reviewed by POLITICO. Reuters first reported on Mountaire’s role.

Another company, Perdue Farms, confirmed that it had “invited” contract growers to comment on the rule, and several form letters in the Federal Register have the document name “Perdue.” The company declined to confirm whether the company provided form letters to its contract growers. USDA confirmed to POLITICO it had received “multiple complaints about fear of coercion.”

Possible repeat? This is not the first time the industry has rallied to oppose regulations like this. They did it back in 2010 when the USDA tried to end the tournament system, the last time the department attempted to significantly change the industry. At the time, advocates and former growers alleged that companies provided postcards growers could mail to USDA with similar instructions to oppose the rule. The finalized rule was later blocked by Republicans in Congress.

WH EYES LATE SEPTEMBER HUNGER CONFERENCE: White House officials are eyeing the last week of September as a rough date for the Conference on Hunger, Nutrition, and Health — but an insider tells MA that planning for the event is “a clusterfuck.”

Walking the tightrope: The White House will be facing enormous mobilization from hunger advocates and food bank groups who are reeling from high food prices, record inflation and the lingering mobilization supply chain and economic shocks from the Covid-19 pandemic.

Those factors, which are sure to come up at the conference, will put the Biden administration in an awkward position as it tries to paint a rosy picture of the economy before the November midterm elections, while also calling for more to be done to end hunger in the US

It’s a mess: Planning is still rather “a clusterfuck,” according to a person who has been on the biweekly Wednesday afternoon Zoom calls organized by the White House Office of Public Engagement. The at-times chaotic calls reflect the wide array of groups and interests coming together and jostling for a piece of the action — both the good PR from the event itself, but also subsequent legislation that could come from the meeting.

White House response: In a statement to MA, a White House official said that “we know many are eager to learn more about the planning that has been underway in full force for the first White House Conference on Hunger, Nutrition, and Health in 50 years, and we look forward to sharing additional details very soon.”

“The conference will serve as an important forum for the public and private sectors to come together to drive toward a coordinated strategy to end hunger and reduce diet-related disease,” the official added.

ICYMI on school meals: The conference also comes as the universal free pandemic-era school meals program is coming to an end. Meredith and Cristina Rivero broke down the ongoing efforts to keep kids fed. A bipartisan deal struck to extend universal meals for three months will end as kids return to school. Democrats are racing to push the programs through in appropriations bills, but Republicans are calling for the end of pandemic-era assistance.

CUT OFF IN NEW ENGLAND: Last summer, Danone North America announced that its subsidiary Horizon Organic would be terminating its contracts with 89 small dairies in four New England states, in what critics called a devastating blow to independent dairies and local economies. Facing criticism, the company gave producers the option to extend contracts another 6 months. As of earlier this month, 18 farms have secured contracts with Stonyfield or Organic Valley and eight have gone out of business.

Criticism: Detractors have said that Danone’s decision to cut ties with small producers in the Northeast runs contrary to its stated values ​​and its status as a B Corp, a third party certification that attests the company meets certain environmental and social standards.

At the time, Danone attributed the decision to increase transportation costs in the northeast. Danone did not immediately respond to a request for comment.

Next steps: One year later, groups including the Organic Farmers Association and the Northeast Organic Dairy Producers Alliance are making renewed demands for severance payments for dairy farmers and for Danone to match USDA’s $20 million commitment to expanding dairy processing in the region.

— An E. coli outbreak in the Midwest has been possibly linked to lettuce in Wendy’s sandwiches. The company is removing its sandwich lettuce for the time being.

— Tyson Foods is investing $200 million in its Amarillo, Texas beef processing plant that will expand the size of the operations floor. The expansion won’t add new jobs and is expected to be completed by 2024.

— Sen. Mark Kelly (D-Ariz.) said it will take all of the Western states to avoid a “catastrophic collapse” of the western water supply, writes POLITICO’s Olivia Olander.



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