The U.S. Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA) is increasing audits of swine production contracts to ensure they meet the requirements established in the 2008 Farm Bill.
The 2008 Farm Bill amended the Packers and Stockyards Act to require that swine contracts:
--Allow contract growers to cancel growing or production contracts for up to three days after signing or up to any date specified in the contract or growing arrangement;
--Include a disclosure statement on the first page that clearly states whether additional large capital investments could be required of the grower during the term of the contract; and
--Allow growers to opt out of arbitration provisions before entering a contract.
Violators could be fined up to $11,000 per offense. So far two pork operations have been fined.
According to GIPSA, the requirements became effective when the Farm Bill was signed into law in June 2008, but the agency never issued guidance on them to producers.
Other provisions of the Farm Bill are also awaiting implementation of regulations.
Producers should consult with their attorney on contract matters.