Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to johnc@cfra.org.

Thursday, January 05, 2006

Protect Farmers Legal Rights

- from our friend Becky Ceartas at RAFI-USA, becky@rafiusa.org

Calls Needed to Protect Farmers Legal Rights!

You can reach your Senator by calling the Capitol Switchboard at (202) 224-3121. Ask to speak to the Senator’s agriculture staff person. If you get voice mail just leave a message.

Message: “I am calling to ask Senator ____to cosponsor Senate Bill 2131 that would protect the rights of farmers and keep arbitration truly voluntary in livestock and poultry contracts. Will Senator _____ cosponsor S. 2131?

If the staff person needs more information, please have him/her call Steve Etka, who works with the Campaign for Contract Agriculture Reform. His number is 703-519-7772.

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The Problem: Mandatory Arbitration Clauses

Many farmers and growers are forced to sign mandatory arbitration clauses, as part of a take-it-or-leave-it, non-negotiable contract with a large, vertically integrated processing firm. By signing a binding mandatory arbitration clause a farmer is signing away his/her constitutional right to a trial by jury. This is a problem for a farmer because -
1. Arbitration can be very expensive and beyond the means of most farmers. A grower in Texas was recently billed over $20,000 for her portion of the initial costs, with payment due before the arbitration process could begin. In comparison, court filing fees run around $200.
It is more difficult for a farmer to prove his/her case in arbitration since basic legal processes such as discovery are waived
2. Arbitration is governed by procedures and rules chosen by the company that wrote the contract. Since a farmer signs a contract before any dispute arises, it allows the companies to use practices that are abusive without fear of the farmer bringing them to court or having a record of their wrong doings.

The Solution: The Fair Contracts for Growers Act

The Fair Contracts for Growers Act (S. 2131), sponsored by Senators Grassley (R-IA) and Feingold (D-WI), provides for greater fairness in livestock and poultry contracts. The bill ensures that the decision to arbitrate is truly voluntary and that farmers are not coerced into waiving their rights. It specifies that if a livestock or poultry contract provides for the use of arbitration to resolve disputes, arbitration may be used to settle a dispute only if, after the dispute arises, both parties agree in writing to use arbitration.

A bill similar to S. 2131 that provided voluntary arbitration in contracts between car dealers and car manufactures passed as part of a larger appropriations package and is now law. Arbitration can be a useful tool if it is a mutually agreed upon method of settling a dispute. But the law should not permit large companies to use arbitration to deny family farmers’ access to justice. Don’t farmers have as much right to a fair contract as the Jaguar dealer?

Please let me know the results of your calls - John Crabtree, johnc@cfra.org
and as always, post any questions or comments here.

Center for Rural Affairs
Values. Worth. Action.

2 Comments:

  • At 11:37 PM, Anonymous Anonymous said…

    Arbitration is not a cheaper alternative to taking a case to court. It can require both filing fees and fees related to actual proceedings such as the arbitrator’s hourly wage. The total costs for the individual filing a complaint can quickly mount to over $10,000 and much more. These fees are in addition to any legal fees related to attorneys or expert testimony. Filing in a public court typically runs $150 - $200.

     
  • At 12:55 PM, Anonymous Anonymous said…

    Arbitration does not have the procedural safeguards of going to court such as standards of evidence and the discovery process. Without these safeguards, the company may not have to share documentation or evidence that may be crucial to the dispute.

    While theoretically an individual could attend arbitration without a lawyer, there is little doubt the corporate counter part to the dispute will have legal representation. The absence of legal representation for the farmer would create an immediate and significant disadvantage.

     

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