WASHINGTON – After the US Department of Agriculture announced updated rules to provide more transparency on contracts between processors and poultry producers on Nov. 8, several associations announced their positions on the issue.

The National Chicken Council (NCC) stated that a final rule under the Packers and Stockyards Act would have a devastating financial impact on the US chicken industry by raising costs and administrative burdens.

The trade association added that the move would open the floodgate for frivolous litigation and ultimately destabilize a successful compensation system for farmers.

“Make no mistake, this isn’t about transparency,” said Mike Brown, president of NCC. “This rule was specifically designed to chum the water for lawsuits. It is just the first salvo in the administration’s attempts to resurrect failed policies that would dismantle a successful industry structure that has benefited farmers, chicken companies and ultimately consumers all around the world. This is the latest example of Bidenomics pushing increased regulations, red tape and costs onto businesses causing record inflation and input costs, and threatening food security and potentially raising grocery bills even further for Americans.”

Other potential impacts noted by the NCC include retroactively amending 25,000 contracts in two months over three major federal holidays.

The NCC said the requirement for contracts to specify minimum annual placements and minimum stocking densities goes well beyond disclosure and imposes terms on private contracts. NCC said the rule would wrongfully impede the ability to adjust to market dynamics like pandemics, natural disasters and weather events.

Some other associations stated their approval of the move by the USDA, including the Campaign for Contract Agriculture Reform (CCAR).

“The opaqueness of the contract poultry production system is at the heart of the economic abuse and deception inherent in the model,” said Steve Etka, policy director of CCAR. “By requiring poultry companies to be more honest and business-like with prospective and existing poultry growers, this rule helps to deter that deception and give farmers the information they need to make wise investment decisions. Without a doubt, a full-scale reform of the poultry payment system is needed, but this rule is a very important and welcomed step toward that goal.”

Farm Action also came out in favor of the measure from the USDA but wants further action from the agency.

“The Final Rule on Transparency in Poultry Grower Contracting and Tournaments exemplifies this point. Providing contract growers with additional information about flock sizes and how much they can expect to make is helpful,” said Angela Huffman, president of Farm Action.

Both groups also urged for changes to the “tournament system” used by large poultry companies to determine the payment structure for poultry farmers and growers in many parts of the United States.