Bargaining bill
(Continued from Page 34)
with a producer because of membership in an association.
Also included in the new bill is a list of unfair practices for
an association. For example, it would be unlawful for an
association to coerce or intimidate a handler to breach,
cancel or terminate a marketing contract with an
association or a contract with a member of an association
The intent of the unfair practices section is to create an
environment for the exercise of free choice to participate
in a bargaining association or refrain from participation
While the Agricultural Fair Practices Act has received
little use and has proven difficult to enforce, those sup
porting the new bill believe that establishing tnese fair
practices in the law has a beneficial effect for farmer
bargaming An attempt has been made to improve the
procedures for enforcement
The proposed bill makes it a mutual obligation of a
designated handler and an accredited association to
bargam in good faith. This means that a handler must
recognize an accredited association as a legitimate
representative of its members and must meet and
negotiate over terms of trade. The obligation to bargam m
good faith does not require either party to agree to a
proposal or to make a concession
It has been argued that good faith bargaining is difficult
to enforce and the obligation may simply result m par
ticipants establishing a record of negotiations. Those who
argue for this provision maintain that it provides a legal
relationship between an association and handlers. The
association cannot simply be ignored. Also, courts have
been able to enforce good faith bargammg in labor
relations.
The bill further requires that if a handler purchases a
product from other producers under terms more
favorable to such producers than the terms negotiated
with an accredited association for such product, he shall
offer the same terms to the accredited associations This
provision is mtended to strengthen the bargaining position
of associations, to make association membership more
attractive and to eliminate “sweetheart contracts” with
non-members which, undermine an association.
It has been argued that this provision would be difficult
to apply to some commodities. Those supporting the
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proposition point out that the bill gives the Secretary
authority to make such rules, regulations and orders as
may be necessary to carry out the provisions of the Act.
The rules would need to be adapted to the unique
characteristics of different commodities and markets.
The obligation to bargain m good faith applies to ac
credited associations and designated handlers. An
association seeks accreditation by submitting a petition to
the Secretary of Agriculture specifying the producers and
products it wciud represent and identifies the designated
handlers, either individually or by class, with whom the
association wishes to bargain. The Secretary will accredit
an association if he finds it meets a set of criteria, in
cluding that of having binding contracts to serve as agent
for a sufficient number of producers and quantity of
product to enable the association to function as an ef
fective agent for producers in bargaining with the
designated handlers Thus, it would be possible for more
than one association to be accredited to bargain for a
commodity or with a particular handler Associations
could represent producers selling to a single handler or,
theoretically, ail of the producers selling a commodity in
the U.S. It has been argued that accreditation should be
based upon a more specific criterion such as representing
a given percent of a product, thus reducing the problem of
the Secretary in determining the number of producers or
quantity of product necessary to enable an association to
function effectively. Those drafting the bill believed that
because of the great differences m commodities and
situations it would be much more workable to leave the
decision to the Secretary. The bill leaves the initiative in
defining an appropriate bargaining unit and convincing
the Secretary that the association can bargain effectively
for its members to producer’s associations.
The bill provides that handlers shall collect funds from
the proceeds of members’ sales for an association if the
member has signed an agreement with the association for
such a payment. The officers of associations made a case
that this provision would reduce the costs of collecting
fees and thus strengthen the association. Collecting fees
and keeping records of sales of a dispersed membership
can be time consuming and expensive.
The bill provides that the Secretary may provide
mediation services if requested by a handler or
association and requires the Secretary to provide
assistance in proposing and implementing arbitration
agreements between accredited associations and
designated handlers. The Secretary may establish a
procedure for compulsory and binding arbitration if he
finds that an impasse m bargaining exists and such im
passe will result in serious interruption in the flow of
product to consumers or will cause substantive economic
hardship to producers or handlers mvolved in the
bargaining. This section received a great deal of
discussion in the process of formulating the bill. The
committee concluded that arbitration was workable and
in the public interest. The rule making and other decisions
of the Secretary would be especially important in ef
fectively implementing this section. The administrative
procedures for rule making would allow mput from far
mers and handlers in developing appropriate procedures
for implementation.
The bill spells out the administrative and enforcement
authority for implementing the bill. The responsibility for
administration of the bill was assigned to the Secretary of
Agriculture. Some had argued that a separate Board
should be established. They feared that the Secretary
might not put proper priority on the implementation of the
bill. The decision by the drafting committee reflected
their belief that implementation of the bill is a proper
responsibility of the Secretary of Agriculture and that a
separate board would add unnecessarily to the problems
in administration and enforcement.
Finally, the bill states that, “This Act shall not in
validate the provisions of any existing state legislation
dealing with the same subjects as this Act, nor shall this
Act prevent any State from enacting legislation similar to
existing state legislation, except that such similar
legislation may not permit any action that is prohibited
under this title.” Several states have passed farmer
bargaining legislation and several more have groups
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Lancaster Farming, Saturday, July 14,1979
working to obtain legislation. The committee wished to
avoid preemption of the state legislation, believing it is
important to allow states to develop procedures adpatec
to their unique situation and preferences. A review of the
bill and state legislation indicated that they would be
complementary and no problems would be created by
allowing associations the option to seek accreditation
under either the national or state rules.
The political fortune of the bill is uncertain. Among the
general farm organizations The National Council of
Farmer Cooperatives, the Grange, the Farm Bureau and
the Farmers Union and many commodity groups are
participating in organizing political support. Other farm
organizations seem to support the objectives of the
proposed bill but have not participated in organized
support.
There will be substantial opposition to the bill A new::
release by the National Food Processors Associatin'
January 23,1979 urged food processors to strongly oppose
the bill in its entirety. According to a spokesman for cue
Association the basic objection to the bill is that it would
impose compulsory bargaining on processors of
agricultural products and that compulsory bargaining is
anti-competitive, inherently inflationary and solely for
the benefit of farm organizations as distinguished from
farmers. The argument continued that where collective
bargaining makes good economic sense, it can and will
take place under existing law. Additional opposition
arguments mclude the assertion that the bill would create
additional bureaucracy which would have excessive
regulatory authority and would be expensive to both the
government and processors. Some farm groups who favor
collective bargaining by farmers also hold that existing
permissive legislation is adequate. They believe farmers
should “see the light” and all jom bargaining associations
organized under the authority of the Capper-Volstead Act.
Other opposition comes from people who believe collec
tive bargaining is an infringement on freedom or is in
consistent with a competitive market.
The proponents of the bill argue that the proposed bill is
a reasonable response to a real problem. They argue there
is an inbalance m bargaining power between individual
farmers and buyers of their products. In many situations
relatively few buyers control access to markets and
farmers believe this puts them at a disadvantage,
especially when they have perishable products. In
discussion leading to the development of the proposed bill,
representatives of poultry producers said the producer of
broilers often has only one or two possible outlets for his
birds and seems to be at the mercy of the buyer. The
producer feels especially vulnerable after investing m
specialized facilities which have practically no alter
native uses. At least proponents argue that in many
markets there are few enough buyers so that buyers are m
a position to influence price and other terms of trade.
They point to situations where they believe there is
evidence of price leadership among buyers and show that
the total number of competing first handlers has been
declining.
They argue that the balance of bargaining power is not
simply one of the relationship between growers and
processors. They see the farmers as a residual claimant
in a system where almost all other participants have a
capacity to influence their terms of trade. They argue that
when an increase m supply of a product results m a lower
retail price that all other participants in the food system
continue to get the same or higher returns for their con
tnbutions and farmers get what is left. Processors,
wholesalers and retailers are not only large enough to
have some influence on their own returns, but more im
portantly, their costs for labor, utilities, transportation,
containers and other inputs are not based upon flexible,
competitive prices, but are supplied by groups which have
some capacity to influence their wages or prices.
Those supporting the proposed bill argue that, as
residual claimants, farmers are subject to large fluc
tuations in income. Modem farming requires large ex
penditures for inputs such as fuel, machinery, and fer-
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