WASHINGTON — U.S. Agriculture Secretary Sonny Perdue moved to kill a set of Obama-era regulations on Wednesday that was designed to level the legal playing field between poultry farmers and the large processing companies that ultimately deliver that chicken to America’s dinner plates.
His decision will have major implications for Georgia, which leads the nation in broiler chicken production, and the ability of small farmers to take legal action against the powerful poultry and food corporations that pay them to raise the young birds to full size.
Corporations such as Tyson Foods, Pilgrim’s Pride and ConAgra exert vast control over the industry since they provide many contractors with their chicks and feed. The farmers raise the birds, and those same companies later buy back those full-grown chickens — controlling both the supply and income for farmers.
Investigative reports in recent years by The Baltimore Sun and other media outlets have leveled allegations that the corporations use retaliatory business practices against farmers who speak up, saying they’re being treated unfairly — claims those companies have disputed. In the meantime, farmers seeking to take those companies to court must prove corporate wrongdoing that harms competition across the industry, not just individual damage.
The regulations, which came out during President Barack Obama’s final weeks of office, sought to make it easier for those farmers to take legal action.
Perdue said the regulations would have spurred “unnecessary and unproductive litigation” and harmed the very small farmers they were trying to protect. He said his duty was to protect competition as a whole and not just individual competitors.
“My goal at this point is to make sure the industry — both those in the production side and those in the buying and processing side — that we abide by the USDA motto, which is to do right and feed everyone,” Perdue, who ran his own agribusiness after serving two terms as Georgia governor, told reporters Tuesday.
But groups advocating for those small farmers warned the move amounted to nothing more than an appeasement of industry groups.
“Farmers will lose even the most basic protections — protections that folks in any other profession would take as a given, like the ability to understand how their pay is calculated or the right to bring abusers to court without having to prove harm to an entire industry in the process,” the National Sustainable Agriculture Coalition, a grass-roots ag group, said in a statement.
‘Harmful and unnecessary’
The rules, which were scheduled to go into effect Thursday, also would have affected other types of livestock.
Perdue said he would abandon the regulations and review another that focused on the so-called “tournament system.” Under that practice, companies determine a farmers’ pay by comparing the quality of their birds with that of their peers.
“We’ll be watching to make sure that our producers individually and collectively are not disadvantaged by unfair, uncompetitive rules that they operate under, and I look forward to doing that,” Perdue said.
Large livestock companies, Georgia agriculture officials and most members of the state’s delegation in Congress cheered Perdue’s decision. Many said the regulations would have led to frivolous lawsuits and backfired on small farmers by providing an incentive to large processing companies to grow the chickens themselves rather than contract out the task.
“I’m not aware of any situation where more government regulations led to greater profitability for Georgia farmers,” Georgia Agriculture Commissioner Gary Black said.
Ten of the state’s 16 members of Congress wrote to Perdue earlier this year calling on him to withdraw the rule.
U.S. Sen. Johnny Isakson, R-Ga., said the regulations were “harmful and unnecessary” and would have caused chicken prices to “skyrocket.” The Georgia Poultry Federation signaled its support, as did the National Chicken Council and U.S. Rep. Doug Collins, R-Gainesville, who represents the coop-heavy northeast corner of the state.
Perdue’s move “signals the administration’s commitment to reducing burdensome regulations on American agriculture,” Collins said.
‘We have no power’
Agriculture is Georgia’s biggest industry, and poultry and egg production by far make up the largest share, accounting for some $25.9 billion in economic activity and 104,000 jobs in 2015, according to the University of Georgia’s Center for Agribusiness and Economic Development.
But reaction Wednesday was extremely muted among the farmers who raise many of the state’s chickens.
Nearly all are afraid to talk among each other — much less to lawyers or the media — for fear that the big companies they work for could punish them. Retaliation tactics detailed in the press have included sending farmers sickly chicks that will be worth less money later, requiring costly equipment upgrades or blacklisting them altogether.
Farmers typically put upward of hundreds of thousands of dollars into their operations up front for land, property, equipment and labor. And many are scared to do or say anything that would jeopardize their investments.
“We have no power,” said one Georgia farmer interviewed by The Atlanta Journal-Constitution who asked for anonymity due to fear of retaliation. “We have to do what they say.”
The farmer, who has been a contract grower for roughly two decades, said he lives in constant financial fear. His concern was so great, he wouldn’t even allow the AJC to reveal his general location in the state.
“I couldn’t afford” any legal challenges, the farmer said. “They have more lawyers than I do. Even if there’s something out there to help me, they would wear me out over time.”
Even before the decision came from Washington, Georgia farmers said they feared the regulations would do little.
Rules are already on the books to protect farmers, said a separate poultry farmer based south of Macon who also feared punishment by his corporate partners, but they often aren’t enforced.
“It may sound good, it may give some people hope,” the farmer said about the Obama regulations this summer, “but the bottom line is it won’t matter.”