WASHINGTON — The Department of Agriculture on Thursday proposed a rule designed to increase fairness in the poultry industry, which is dominated by a handful of meat processors.
The department also said it plans to examine whether certain companies should be more closely regulated, and announced $200 million in funding for independent meat processors to increase the capacity of slaughterhouses.
The actions “ultimately will help us give farmers and ranchers a fair chance, strengthen supply chains and make food prices fairer,” Agriculture Secretary Tom Vilsack said in a statement.
The proposed rule would require the companies to disclose certain details to farmers, such as how the pay is calculated; how much feed, chicks and supplies are provided to other growers; and where the farmers are ranked under a performance-based system that determines how they are paid. The companies would also have to guarantee a minimum number of chickens they would supply to farmers in a year.
More than 90 percent of the chickens eaten by Americans are raised by farmers under contracts with poultry processing companies. Four poultry processing companies control more than half of the market, while the top 20 companies control 95 percent. Farmers are paid based on their performance relative to others, pitting growers against each other. Known as a poultry tournament, this method leads to wide disparities in income and has been criticized as offensive and opaque.
The department expects to publish additional rules for packaging meat this year.
