On March 6, 2018, the Small Business Administration’s Office of Inspector General issued a report on SBA loans made to poultry growers. It found that poultry companies “exercised such comprehensive control over the growers” that they no longer qualify as small businesses. Nevertheless, SBA has given out nearly $2 billion in loans to ineligible growers who are being set up to fail in a consolidated industry in which companies are able to dictate unfair prices, pit growers against each other, and retaliate against growers if they speak out.
Organization for Competitive Markets issued the following statement:
“We have seen firsthand the control these huge agribusinesses have over poultry growers, and it is no surprise that the Office of Inspector General is concerned,” said Mike Weaver, President of Organization for Competitive Markets. “This is exactly why we need the Farmer Fair Practices (GIPSA) Rules and other market safeguards to ensure poultry growers can operate as small businesses and stop subsidizing increased production for these multinational corporations by American taxpayers.”
Background: Last fall, President Trump’s USDA rescinded the “Farmer Fair Practices Rule”— rules that made it possible for poultry and livestock farmers to take legal action against multinational agricultural corporations when those corporations engaged in abusive and unfair practices. When growers contract with these corporations, they face huge risks of abuse, through practices like predatory pricing and collusion, bad faith, and retaliation. The fair practices rule that was withdrawn by USDA was the product of almost 10 years of work and would have helped growers make sure they could hold the multinational corporations accountable. In November, more than 80 farm organizations wrote to President Trump urging him to reverse USDA Secretary Sonny Perdue’s action.
In December, the Organization for Competitive Markets and farmers in Nebraska and Alabama sued the Trump Administration seeking to reinstate the rules and protect growers.
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