Open Markets Urges USDA to Ban Unfair Tournament Payment Schemes in the Poultry Industry
FOR IMMEDIATE RELEASE: August 11, 2022
CONTACT: Claire Kelloway, kelloway@openmarketsinstitute.org
WASHINGTON - The Open Markets Institute submitted a comment to the U.S. Department of Agriculture (USDA) urging the agency to use its legal authority under the Packers and Stockyards Act to ban unfair tournament payment schemes in the poultry industry.
“In our corporate-dominated poultry industry, the giant chicken corporations exert their market power over growers to keep the prices they pay for chickens low and unpredictable, significantly diminishing farmers’ autonomy and wages.” said Open Markets Food Systems Program Manager Claire Kelloway. “It’s time for the USDA to use its authority under the Packers and Stockyards Act to establish a much fairer, transparent, and more equitable poultry growing market. That starts with banning unfair payment schemes that chicken corporations can easily rig, like the tournament system.”
The tournament system pays poultry growers based on their relative performance to a group average, docking pay from lower ranking farmers to pay for bonuses to higher performers. But because powerful chicken corporations give farmers the chicks, feed, and medicines that largely determine how well growers perform, the system is rife with inequal treatment and unfair pay cuts.
In its public comment, Open Markets urges the USDA to issue rules ensuring that all poultry contracts guarantee farmers a firm base price and severely restrict the use of performance-based bonuses when chicken corporations influence farmers’ performance outcomes.
In June, Open Markets and the organization Farm Action published a midterm report of the Biden administration’s progress addressing monopoly power and anticompetitive behavior across US food systems in which the USDA earned a D+ grade for its failure to take substantive policy action thus far in order to create fairer markets.
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Read more from Open Markets about fair food and farming systems.