Date of this Version
Cornhusker Economics, November 1, 2000, agecon.unl.edu/cornhuskereconomics
Agricultural production contracts are becoming more widespread in Nebraska. (Contract production should be distinguished from custom farming, which is not at issue here). Under ag production contracts, farmers may contract to produce crops or livestock typically for processors. Contracting is widespread in the broiler industry, and is becoming more common in the swine and beef industry, and for some crops. The Producer Protection Act of 2000 (PPA) is a proposed model state statute prepared by the National Association of Attorney Generals to deal with legal issues associated with agricultural contracting. The PPA was developed in order to avoid some problems that have arisen with contracting in the broiler industry. Legislative proposals based on the PPA are likely to be introduced in the 2001 session of the Nebraska Unicameral. The PPA is 15 single-spaced pages long, and this newsletter provides only a brief summary of the legal issues raised. The PPA would provide substantially more legal protection to contract growers than they would likely receive under a typical production contract.