MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Agriculture

By: Senator(s) Williamson, Dawkins, Jordan, Frazier, Harden

AN ACT TO ENACT THE MISSISSIPPI POULTRY PRODUCTION CONTRACT FAIR PRACTICES ACT; TO PROVIDE FOR A FAIR PRACTICES REVIEW BOARD; TO PROHIBIT DISCRIMINATORY AND COERCIVE PRACTICES; TO PROVIDE REMEDIES FOR CANCELLATION OF CONTRACTS; TO PROVIDE AN ADMINISTRATIVE REVIEW OF VIOLATIONS; TO PRESCRIBE PENALTIES FOR VIOLATIONS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known and may be cited as the Mississippi Poultry Production Contract Fair Practices Act.

SECTION 2. As used in this act:

(a) "Board" means the Fair Practices Review Board created in this act.

(b) "Commissioner" means the Commissioner of the Department of Agriculture and Commerce.

(c) "Department" means the Mississippi Department of Agriculture and Commerce.

(d) "Grower" means a person who grows, raises or produces poultry or poultry products and contracts with a processor to provide management, labor, machinery, facilities or any other production input for the production of poultry or poultry products.

(e) "Person" means any individual, partnership, association, corporation, limited liability company, or any other legal entity.

(f) "Processor" means a person who in the ordinary course of business, buys poultry or poultry products grown, raised or produced in this state or who contracts with a grower to grow, raise or produce poultry or poultry products in this state.

SECTION 3. There is created the Fair Practices Review Board consisting of three (3) members. The members are the commissioner, or his designated representative, from within his department, who shall serve as chairman; the Mississippi Attorney General, or his designated representative from within his department; and a third member, who is an expert in the field of poultry, chosen by agreement of the commissioner, or his designated representative, and the Mississippi Attorney General, or his designated representative.

SECTION 4. (1) No processor or grower shall engage in any unfair, unjustly discriminatory or deceptive act or practice as provided in this act in connection with any poultry or poultry products contract.

(2) Unfair, unjustly discriminatory or deceptive acts and practices include, but are not limited to, the following and each is a violation of this act:

(a) Using coercion, intimidation, the threat of retaliation or the threat of contract termination or cancellation to impose, demand, compel or dictate the terms, payment or manner of payment or the signing of a contract by a grower;

(b) Using coercion, intimidation, the threat of retaliation or the threat of contract termination or cancellation or threat of nonrenewable of a contract in order to require the grower to make capital improvements such as buildings or equipment;

(c) For a processor to interfere with, restrain or coerce a grower in the exercise of his right to join, form or assist associations of producers or growers and to participate with other growers in contract negotiations;

(d) For a processor to terminate or cancel a contract with a grower while the grower is financially obligated for an investment in buildings and equipment which was made to obtain a contract to be a grower, except when the grower is in willful violation of the contract and the grower fails to cure the violation within ninety (90) days after written notice from the processor;

(e) For a processor to refuse to provide to the grower upon request the statistical information and data used to determine compensation paid to the grower by the processor. This statistical information and data includes, but is not limited to, feed conversion rates, averages of other growers, origination and breeder history;

(f) For a processor to refuse to allow a grower or a grower's representative to physically observe, the actual weighing or measuring of any poultry or poultry products, feed or other substance used to determine the grower's compensation or for the processor to fail to weigh or measure any poultry or poultry products within a reasonable period of time after it has been obtained from the grower;

(g) To cancel a grower's contract based solely upon his ranking as it compares to the other growers;

(h) Any act or omission prohibited by the Packers and Stockyards Act, 7 USCS Section 181 et seq., or the Perishable Agricultural Commodities Act, 7 USCS Section 499a et seq., or the rules and regulations promulgated under those acts;

(i) For a processor to require a grower to purchase or construct additional buildings, equipment or facilities or additions, modifications or improvements, after the parties have entered into a contract, unless fair and equitable premiums are paid by the processor as compensation resulting in the payoff of improvements in that contract period, or the processor may pay for the improvements in lump sum;

(j) Any act or omission by a processor that causes a reduction in production, an increase in morbidity or an increase in mortality on the part of a grower's poultry or poultry products;

(k) For a grower to fail to maintain buildings, equipment, ingress or egress in a manner that is acceptable within industry standards;

(l) For a grower to fail to diligently follow the written day-to-day poultry management practices of the processor.

(3) Nothing in this act shall prevent a processor from providing incentives to growers in the production of poultry or poultry products.

SECTION 5. (1) The parties may voluntarily cancel the contract by mutual agreement at any time.

(2) If either party is convicted of a felony in a court of law for an offense directly related to the business covered by the contract the other party may immediately cancel the contract. If the processor is the one convicted, and the grower cancels the contract, the processor shall be responsible to the grower for the remaining indebtedness or capital cost of all buildings, equipment or other facilities, and any additions, modifications or improvements that the grower purchased or made for the purpose of growing poultry or poultry products. The processor will also be obligated to compensate the grower in an amount equal to the remaining value of the contract.

(3) Unless a contract has been cancelled as provided in this section or by a court or by agreement of the parties, the parties shall continue to fulfill their obligations under the contract, including, but not limited to, the delivery of poultry and feed by the processor to the grower and the payment of compensation to the grower.

(4) If the processor terminates the contract other than as provided in this section, and without limiting the grower's damages, the processor will also be obligated to compensate the grower in an amount equal to the remaining value of the contract.

(5) If the processor terminates or cancels the contract, the processor shall reimburse the grower for the remaining indebtedness on capital cost of all buildings, equipment or other facilities, and all additions, modifications or improvements except when the grower is in willful violation of the contract and the grower fails to cure such violation within ninety (90) days after written notice from the processor.

(6) The grower may terminate or cancel the contract if the processor is in violation of the contract and the processor fails to cure the violation within ninety (90) days after written notice from the grower.

(7) If title to the poultry is retained by the processor, the grower shall not pay for the poultry or have a value of the poultry used in calculating the grower's payment.

SECTION 6. (1) All contracts will be entered into with a sense of fairness and there is an implied promise of good faith as defined in Section 75-1-201(19), Mississippi Code of 1972, by all parties in any poultry or poultry product contract between a processor and a grower.

(2) Every poultry or poultry products production contract subject to this act shall have a term of at least five (5) years.

(3) A grower shall have the right to obtain shavings from a supplier of his choice so long as the shavings meet generally accepted industry standards.

(4) The processor shall furnish at no cost to the grower any feed, medications, vaccinations or other supplies and supplements required by the processor or as required by any state or federal regulation, other than as provided for in subsection (3).

(5) A processor shall pay the grower for the mature poultry or poultry product within fifteen (15) days after the week that the poultry or poultry product leave the grower's farm.

(6) If a grower has evidence that inferior quality feed has been delivered, the grower may request an official inspection and analysis by the department.

(7) When the mature poultry or poultry product leaves the grower's farm for the processor, the processor shall retrieve from the grower, as soon as possible, any leftover feed with no transportation or other charge to the grower, and the grower shall be given proper credit for such leftover feed, which shall be reflected on the settlement statement.

SECTION 7. No contract entered into between a grower and a processor shall abrogate, waive or diminish in any way any of the legal or equitable remedies available to either party in the event of a breach of the contract by the other party. The exercise of a remedy by either party to the contract shall not operate as an election of remedies, so as to preclude it from taking any other action available to it under the contract. Remedies are cumulative and not by election.

SECTION 8. Before a grower initially builds or makes additions or modifications to his buildings, equipment or facilities, the processor shall provide the grower with written plans and specifications of how the initial buildings, additions or modifications should be constructed or purchased. The grower may employ the contractor, builder or vendor of his choice to make the additions or modifications. The processor shall not dictate or suggest to the grower which contractor, builder or vendor shall provide construction services or goods to the grower.

SECTION 9. Any person violating this act or rules and regulations is guilty of a misdemeanor and shall be fined not more than Five Hundred Dollars ($500.00) or be imprisoned in the county jail for not more than six (6) months, or both.

SECTION 10. Notwithstanding the existence or pursuit of any other remedy, the Mississippi Department of Agriculture and Commerce, or any person, may maintain an action for injunctive relief or other process to prevent violations of this act.

SECTION 11. If any person violates this chapter, or rules and regulations, administrative proceedings may be brought against him pursuant to a written complaint filed with the department. A full evidentiary hearing may be conducted before the board. At the hearing the department shall have subpoena power, witnesses shall be placed under oath, parties shall have the right of cross-examination and the right to be represented by counsel an the testimony shall be recorded. Cases may be consolidated for hearing if there is a similarity of issues or parties or in other instances deemed appropriate by the board. The board shall render a written opinion. If the board finds that the accused did not commit a violation, the complaint shall be dismissed. If the board finds that the accused did commit a violation, the board may levy a civil penalty against the accused in an amount not to exceed Twenty-five Thousand Dollars ($25,000.00) for each violation. If a party is aggrieved by the findings of the board, the party may appeal to the circuit court of the county of the residence or domicile of the accused, or, if the accused is a nonresident of the State of Mississippi, to the Circuit Court of the First Judicial District of Hinds County, Mississippi. If a party is aggrieved by the findings of the circuit court, the party may appeal to the Mississippi Supreme Court. All fees, costs and penalties collected hereunder from the accused may be retained by the department for its operating expenses. The department may expand and amplify the procedures and other matters mentioned in this section in rules and regulations that the department deems necessary or desirable to carry out this section.

SECTION 12. The commissioner may promulgate rules and regulations to implement the provisions of this act.

SECTION 13. If any section, subsection, paragraph, sentence, clause or provision of this act shall become invalid by order of any court of competent jurisdiction, the same shall not affect the validity of any other section, subsection, paragraph, sentence, clause or provision thereof.

SECTION 14. This act shall take effect and be in force from and after its passage.