* USDA expected to propose marketing rules in June
* Rules deal with "undue preference" in purchases
* Also clarify producer rights in contract disputes
* Packers say they follow the law
By Charles Abbott
WASHINGTON, May 25 The U.S. government will
soon propose rules to bar meatpackers from unfairly favoring
big cattle feedlots and to give poultry producers more
leverage, two small-farm groups said on Tuesday.
The proposal would modify Agriculture Department guidelines
on fair play in livestock and poultry sales. Activists say
farmers are out-muscled by big packers who dominate meat
processing. The 2008 farm law required action on the issue.
Agriculture Secretary Tom Vilsack told agribusiness
lobbyists on Tuesday that changes to marketing rules would be
proposed in June but did not specify them. He said the changes
would allow USDA to "do a better job of responding to some of
the complaints we've heard" from farmers.
Two farmer advocacy groups identified the proposals as
dealing with "undue preference" in livestock purchases by
meatpackers and clarifying the contractual rights of producers
who feed poultry for large processors.
Most U.S. poultry, pork and beef is produced under contract
to companies such as Tyson Foods Inc (TSN.N), Cargill, JBS USA
(JBSS3.SA), National Beef Packing Co and Smithfield Foods Inc
Producers say they have limited recourse if packers treat
them unfairly. Meat processors say existing antitrust and
competition laws are effective.
Vilsack cited ongoing Obama administration hearings into
competition in the agricultural sector before mentioning the
imminent release of proposed revisions.
"It's encouraging the secretary is mentioning them," said
Kathy Ozer of the National Family Farm Coalition, referring to
the proposed rules.
A spokesman for the National Sustainable Agriculture
Coalition said, "we've been waiting and waiting" for the update
to USDA's application of the 1921 Packers and Stockyards Act.
Under the 2008 farm law, USDA is required to issue
--prevent packers from price discrimination in buying
livestock. Farm activists say small and medium-size producers
do not get as good a price as big producers.
--give poultry producers the right to refuse arbitration in
a contract dispute and take the issue to court.
--require poultry processors to warn producers if they will
delay delivery of a new flock of birds.
--mandate poultry processors tell producers in advance of
improvements that will be required in feeding houses.
--give swine and poultry producers a reasonable amount of
time to correct problems that could lead to termination of a
(Reporting by Charles Abbott; Editing by David Gregorio)