USDA's Grain Inspection Packers and Stockyards Administration is reviewing the contracts involving pork and poultry producers and their respective processors. The motivation is to determine compliance with the 2008 Farm Bill.
As the National Meat Association points out, the farm bill changed some of GIPSA's responsibilities as follows:
- Provide pork and poultry producers with a three-day cancellation right after signing a grow-out contract and requiring the contract to clearly disclose the cancellation right.
- Requiring that pork or poultry grow-out contracts disclose on the first page whether additional large capital investments may be required.
- Require that disputes under the contract and the law governing the contract be heard in the Federal Judicial District and state in which the contract's principal performance takes place.
- Require all livestock or poultry contracts containing arbitration provisions to disclose the producer's (or grower's) right to opt out of the arbitration contract before signing it.
Even though these requirements became effective with the Farm Bill's passage in May 2008, the criteria for some of these provisions have not yet been written. The goal is for GIPSA's review to help packers better prepare for compliance with these news provisions.