MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Agriculture

By: Representatives Malone, Livingston

AN ACT TO CREATE THE "MISSISSIPPI POULTRY PRODUCTION CONTRACT FAIR PRACTICES ACT"; TO PROVIDE DEFINITIONS; TO CREATE THE FAIR PRACTICES REVIEW BOARD; TO PROVIDE PROHIBITIONS AND REQUIREMENTS FOR PROCESSORS AND GROWERS; TO PROVIDE 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) "Department" means the Mississippi Department of Agriculture and Commerce.

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

(c) "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 producer to grow, raise or produce poultry or poultry products in this state.

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

(e) "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.

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

SECTION 3. There is created the Fair Practices Review Board for the purpose of conducting evidentiary hearings and assessing penalties for violations of this act. The board shall consist of the commissioner or his designated representative chosen from within his department, who shall serve as chairman, the Mississippi Attorney General or his designated representative chosen 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 defined 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, each of which is declared to be a violation of this act:

(a) A processor's 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) A processor's using coercion, intimidation, the threat of retaliation or the threat of contract termination or cancellation or threat of nonrenewal of a contract in order to require the grower to make capital improvements such as buildings or equipment;

(c) A processor's interfering with, restraining or coercing 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) A processor's terminating or cancelling a contract with a grower while the grower is financially obligated for an investment in buildings and equipment that was made to obtain a contract to be a grower unless 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;

(e) A processor's refusing 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) A processor's refusing 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 the processor's failing to weigh or measure any poultry or poultry products within a reasonable period of time after it has been obtained from the grower;

(g) A processor's cancelling 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 thereunder;

(i) A processor's requiring a grower to purchase or construct additional buildings, equipment or facilities, or additions, modifications or improvements thereto, 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; alternatively, 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) A grower's failing to maintain buildings, equipment, ingress or egress in a manner that is acceptable within industry standards;

(l) A grower's failing to diligently follow the written day-to-day poultry management practices of the processor.

SECTION 5. Nothing in this act shall prevent a processor from providing incentives to growers in the production of poultry or poultry products.

SECTION 6. (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 person convicted and the grower cancels the contract, the processor shall be responsible to the grower for the remaining indebtedness on capital cost of all buildings, equipment or other facilities, and any additions, modifications or improvements thereto, that the grower purchased or made for the purpose of growing poultry or poultry products. The processor also shall be obligated to compensate the grower in an amount equal to the remaining value of the contract.

(3) Unless and until a contract has been cancelled as provided herein 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 herein, and without limiting the grower's remedies or damages, the processor also shall 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 thereto, except where 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 such violation within ninety (90) days after written notice from the grower.

SECTION 7. (1) All contracts shall 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) by all parties in any poultry or poultry products contract between a processor and a grower.

(2) 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 8. A grower may obtain shavings from a supplier of his choice so long as the shavings meet generally accepted industry standards.

SECTION 9. 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 Section 8 of this act.

SECTION 10. Any person violating any of the provisions of this act or the rules and regulations promulgated hereunder shall be 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 11. 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 12. A processor shall pay the grower for the mature poultry or poultry products within fifteen (15) days after the week that the commodity leaves the grower's farm.

SECTION 13. If a grower has evidence that inferior quality feed has been delivered, the grower may request an official inspection and analysis by the department.

SECTION 14. 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 such 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 15. Every poultry or poultry products production contract subject to this act shall have a term of at least five (5) years.

SECTION 16. Before a grower initially builds or makes additions or modifications to his buildings, equipment or facilities, the processor shall provide to the grower written plans and specifications of how the initial buildings, additions or modifications should be constructed or purchased, and the grower may employ the contractor, builder or vendor of his choice to make such additions or modifications. The processor shall not dictate or suggest to the grower which contractor, builder or vendor shall provide such construction services or goods to the grower.

SECTION 17. When the mature poultry or poultry products leave 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 18. If any person violates any of the provisions of this act, or the rules and regulations promulgated hereunder, 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 and 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 Fair Practices Review 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 either party is aggrieved by the findings of the board, he 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 either party is aggrieved by the findings of the circuit court, he 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 is hereby authorized to expand and amplify the procedures and other matters mentioned in this section in such rules and regulations that the department deems necessary or desirable to carry out the provisions of this section.

SECTION 19. The commissioner may promulgate rules and regulations to implement the provisions of this act.

SECTION 20. 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 21. This act shall take effect and be in force from and after its passage.