The Senate voted unanimously on Tuesday to adopt a farm bill amendment introduced by U.S. Senators Chris Coons (D-Del.) and Saxby Chambliss (R-Ga.) to commission a pair of studies on the feasibility of insurance programs to protect America's poultry growers from catastrophic loss, such as disease outbreaks, and from bankruptcies of poultry integrators. The amendment is now part of the Agriculture Reform, Food and Jobs Act of 2012 (S. 3240), on which the Senate is expected to vote later this week.
"Poultry growers and integrators play an important role in our local, regional, and national economies," Senator Coons said. "The studies we proposed in this amendment would explore whether insurance programs make sense as a tool for helping our poultry farmers and integrators continue to thrive during uncertain economic times. Between the recession and the volatile cost of chicken feed, the number of factors that can have a catastrophic impact on local economies but are beyond the control of our local farmers and integrators is rising. I'm grateful to my Senate colleagues for their support today, and look forward to supporting final passage of the farm bill."
"Farmers must have an adequate safety net to continue providing Americans with the highest quality food. This safety net is even more important to poultry producers, who risk losing their entire stock from an unexpected disease outbreak," Senator Chambliss said. "These studies are necessary to ensure that insurance programs would benefit both the poultry farmer and the country, and I am grateful that the Senate passed this amendment today."
The first study would focus on the impact of the growing number of bankruptcies of poultry integrators -- companies that hire local farmers to raise their chickens, then process and sell the chicken products in the market. Because local poultry farmers are typically only contracted with one integrator, if that integrator goes bankrupt -- as Seaford, Delaware-based Allen Family Foods did last year -- the farmer would be financially exposed unless able to secure a contract with another integrator. The Coons-Chambliss amendment would require the U.S. Department of Agriculture (USDA) to study the feasibility of an insurance program that would provide a safety net for individual growers in the event that their integrator files for bankruptcy and they are unable to secure contracts with another integrator.
The second study would focus on the cascading economic impacts of catastrophic events, such as disease outbreaks within America's poultry industry. While the poultry industry, state and federal entities have established the gold standard for poultry disease prevention, outbreaks are still possible, and can have significant impacts on integrators and local poultry farmers. Disease outbreaks can result in significant losses for both growers and integrators, including destruction of flocks, quarantined farms, and closure or restricted access to export markets. Often, a disease outbreak in one community can lead to prohibitions against imports from a much larger region, or the entire country. The Coons-Chambliss amendment would require USDA to study the feasibility of an insurance program that would provide support for growers and integrators in the event of a disease outbreak or other catastrophic event that results in significant losses.
The two studies would come at no additional cost to taxpayers.
The amendment was cosponsored by Senators Tom Carper (D-Del.), Barbara Mikulski (D-Md.), Ben Cardin (D-Md.), Kay Hagan (D-N.C.), and Amy Klobuchar (D--Minn.).