WASHINGTON — On Aug. 23, the National Chicken Council (NCC) submitted a comment to the US Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) requesting the withdrawal of the proposed Transparency in Poultry Grower Contracting and Tournaments rule.

The initiative is the first of many to be proposed by the USDA to strengthen enforcement of the Packers and Stockyards Act (PSA) of 1921. It would require poultry companies and live poultry dealers to provide necessary documentation for contract producers.

“NCC 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 destabilizing a successful compensation system,” the association wrote in its comment.

NCC claimed the following as issues with the proposed rule:

  • AMS’s cost assessment overlooks numerous key costs industry would shoulder to comply with the Proposed Rule and significantly underestimates the actual costs of the proposal, including the Proposed Rule’s potential effects on inflation.
  • AMS has positioned the proposed rule as part of a broader set of planned changes to AMS’s PSA regulation. 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.
  • 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.
  • AMS should omit the proposed governance framework and certification in its entirety as this proposal is an incredibly costly measure that does not provide useful information and does not address a real concern.
  • All forward-looking projections should be omitted from a final rule, as they by definition cannot be accurate and risk causing significant confusion.
  • 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.

“This isn’t about transparency,” added 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.”

Earlier, a coalition of 10 attorneys general submitted a comment in support of the initiative. The coalition believes that, with the rule, smaller poultry farmers can compete more fairly with larger processors.