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Washington, D.C. – U.S. Senator Mike Enzi, R-Wyo., urged Senate colleagues to support legislation that would protect livestock producers from unfair and deceptive contracting practices.

The Senate voted 82-14 in favor of the measure.

Enzi cosponsored the proposal which was offered as an amendment to the farm bill. The amendment is designed to keep ranchers in production contracts from being taken advantage of by packers. It would also allow producers to discuss their contracts with individuals that could help protect their interests.

A more detailed statement from Enzi is included below.

Statement of Michael B. Enzi on Amendment #2604, the Production Contract Amendment

Mr. President, today I rise in support of the amendment offered by Senator Harkin. This amendment puts ranchers with production contracts under the same umbrella of protections the Packers and Stockyards Act provides to other livestock producers. Producers with production contracts, excluding those that raise poultry, are not included in the Packers and Stockyards Act. They are not protected from unfair and deceptive practices as other livestock producers are.

In a production contract, a producer provides the labor and materials to raise livestock owned by another individual, the contractor. Until recently, the contractor could be a packer or another person. On December 13, 2001 this body passed an amendment to the Farm Bill that prevents packers from owning, feeding or controlling livestock more than 14 days before slaughter. This means that packers can no longer directly enter into production contracts because they would own the livestock more than 14 days before slaughter. However, the amendment we passed in December does not prevent other individuals from production contracting with producers. These producers with production contracts need the same protections other producers receive against unfair and deceptive practices.

We should not be fooled into thinking that this ban of packer ownership we passed in December will completely shrink packer influence over the market. This bill must still go to conference and the ban will face incredible scrutiny. The ban will probably go the way many similar amendments have gone in the past. Amendments that reduce the choke hold of the packers have routinely disappeared in conference. It took years of work to get mandatory price reporting into law. However, we all know the packers are still withholding a fair amount of pricing information from producers.

Many of you may be wondering why these producers need protection from their contractors. A production contract entails a large capital investment to feed, shelter and care for the livestock that the producer doesn't own. Many producers have suffered through unfair treatment because their contract was too large to risk contending with the unfair practices. This great pressure from the contractor was also the reason the second part of the amendment was included.

The second portion of the amendment guarantees that the producer has the right to discuss the contract with their business advisors, landlord, managers, family, and State and Federal agencies charged with protecting parties to the contract. In states where producers already have this right, the pressure and intimidation from contractors is so extreme producers forego sharing the contents of their contracts. They fear retribution. Other producers are given contracts with secrecy clauses that prevent them from discussing the contract terms with individuals that could help protect their interests.

This amendment offers an overlooked group of livestock producers the same protections others in their industry already have. They would be protected from unfair and deceptive acts and given the right to discuss their contracts with certain individuals. I urge my colleagues to throw your support behind this amendment.