How to ensure you protect your poultry business with legal compliance
In poultry production, the focus is often on the day-to-day operations, such as managing health and welfare to optimise productivity. However, the legal and administrative aspects are also crucial, even if they are not always forefront of mind. It is important to ensure compliance with legal requirements to avoid any potential issues which could harm the business’ reputation and financial stability.
Partners and agricultural law specialists at HCR Law, Aled Owen and Rory Hutchings, highlight some of the key areas that producers should consider to steer clear of legal challenges and ensure smooth, compliant operations.
Up-to-date exemptions and permits
From bird registration to pollution control, there are an array of exemptions and permits required for poultry production to control and manage the disposal of waste.
“Making sure your exemptions and permits are correct, applicable and keeping within the set parameters for your operations must be a key consideration,” says Aled Owen. “One particular permit to be aware of is the intensive farming permit which is needed when producers exceed 40,000 birds.”
The permit, which is policed by the Environment Agency, covers the pollution of air, land and water, and failure to obtain a permit when you require one is a breach of the law.
Owen encourages producers to review their operations to ensure that exemptions and permits are adhered to.
He says producers should seek professional advice as the size of the business changes, even if it reduces.
“If you’ve recently increased your flock, consider the terms of your permit. An accidental breach will still be an offence which can lead to enforcement, sanction and conviction.
“You might not realise that you’ve tipped over that threshold, but the consequences can be serious to your business,” he adds.
Risk of proceeds of crime
Owen stresses the importance of obtaining necessary permits for operations, such as the construction of new sheds or expanding facilities to increase bird numbers.
Producers face significant risks of drifting into violations of the Proceeds of Crime Act 2002 (POCA) due to various regulatory challenges inherent in the industry.
“Putting up a new shed for additional birds is a seemingly legitimate activity. But without the correct permissions to do this, producers can land themselves in a sticky situation. This can result in regulatory violations that fall under the POCA, leading to severe legal and financial consequences,” he says.
According to Owen, the penalties can increase quickly.
“With most farms home to thousands of birds, it doesn’t take long for the fines to build up if you’re charged under the POCA, so it’s something you can’t afford to overlook.
“For example, if you’ve been able to produce an additional million eggs following the erection of a new shed without permission, the authorities could seek to recover the profits made during that time,” he explains. “This can amount to hundreds of thousands of pounds.”
Owen says building expansion is something broiler producers might consider when the new rules for lower stocking density come into force this autumn.
Legal compliance for employing migrant workers
Labour, or a lack of, is a persistent issue throughout UK agriculture, with all sectors struggling to recruit. This is why migrant workers are an important asset to the poultry sector.
However, Owen explains that non-compliance with employment laws concerning migrant workers can lead to huge financial penalties and therefore should be carefully managed.
“In order to legally hire migrant workers, employers must secure the necessary permits, such as work visas and residence permits.
“Failure to obtain these permits can result in hefty legal penalties against the employer, including fines of up to £45,000 per migrant worker,” he says.
“And, when you’ve got more than one migrant worker without the necessary paperwork, it’s damaging to your finances as well as your reputation.”
Understand your contract
Rory Hutchings explains that, although generally not a bad thing, the tight production contracts both egg and broiler producers are often tied into can present challenges. This is due to their restrictiveness and the inability for producers to operate independently in certain circumstances.
“For example, if there are issues with supply of pullets, the producer cannot go out and seek them from elsewhere.
“Understanding your contractual arrangements is really important, so there are no surprises if something does go wrong,” Hutchings adds.
“It’s important you understand what can and cannot terminate a contract; the fact that a contract is not economically viable is not a ground to terminate – the law will not protect you from a bad bargain.”
According to Hutchings, pullets and housing equipment are often sourced from overseas, which can lead to questions around jurisdiction.
“Knowing the specifics of your contract, such as where legal authority lies, is important too.
“For example, if a problem arises with housing equipment from overseas, is this governed by UK law or the country the equipment originated from, because legal frameworks can differ from country to country,” he explains.
Hutchings says a key consideration for producers is understanding what notice period is required to bring the contract to an end.
“In a market impacted by fluctuating prices, the ability to bring the contract to an end will be key in any negotiation.”
He recommends producers seek legal advice either through their solicitor or via the NFU contract checking service to clarify the details of their contracts.
Litigation, both civil and criminal, can easily arise in poultry production. Consulting with agricultural law solicitors can support producers to seek advice and clarity around their practices to ensure they are operating in line with regulation and the law.