Letter Opposing anti-arbitration provisions within the Senate Farm Bill

September 26, 2007

The Honorable Tom Harkin

Chairman Committee on Agriculture, Nutrition and Forestry

United States Senate

Washington, DC 20510

The Honorable Saxby Chambliss
Ranking Member Committee on Agriculture, Nutrition and Forestry
United States Senate
Washington, DC 20510

Dear Chairman Harkin and Ranking Member Chambliss:

The U.S. Chamber of Commerce, the world's largest business federation, representing more than three million businesses and organizations of every size, sector, and region, strongly opposes the inclusion of any anti-arbitration provisions within the Senate Farm Bill such as those included in H.R. 2135, S. 221, and S. 622.

The anti-arbitration provisions under consideration for inclusion in the Farm Bill would effectively nullify pre-dispute binding arbitration clauses in livestock contracts agreed to by livestock and poultry growers. The long-term effects of such provisions, if enacted, would cause serious damage to the general use and availability of alternative dispute resolution (ADR) as well as weaken the Federal Arbitration Act (FAA). Many businesses rely on FAA for enforcement of agreements to engage in ADR. Businesses and consumers use ADR mechanisms, such as arbitration, to fairly, quickly, and relatively inexpensively settle disputes. The inclusion of antiarbitration provisions would weaken long-standing, clear congressional intent to encourage ADR and could also call into question the U.S. Supreme Court's continual reaffirmation of contractual arbitration clauses.

The Chamber believes in the principle of sanctity of contract. Parties mutually agree to use binding arbitration before disputes arise in order to set up a mechanism to resolve problems before their relationship deteriorates. Unfortunately, these bills and their associated antiarbitration provisions all run counter to this principle and would allow a party to repudiate its agreement to engage in arbitration after the relationship may have soured.

While the anti-arbitration provision under potential consideration in the Farm Bill deals with agreements between meat, poultry, and livestock packers and producers, enactment of such an exception would ultimately endanger the enforceability of all agreements to engage in alternative dispute resolution mechanisms that are used by business and consumers as a better alternative to going to court.

This would be a dangerous step down a slippery slope and would establish a dangerous anti-contract and anti-arbitration precedent. Accordingly, the Chamber strongly urges you to oppose the inclusion of any anti-arbitration provisions in the Farm Bill.

Sincerely,

R. Bruce Josten

Cc: Members of the Committee on Agriculture