---
kind: "section"
citation: "7 U.S.C. § 197"
title: "7"
title_heading: "Agriculture"
number: "197"
heading: "Statutory trust established; poultry"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/7/197"
units:
  - "Chapter 9 — Packers and Stockyards"
  - "Subchapter II — Packers Generally"
  - "Part A — General Provisions"
---

# §197. Statutory trust established; poultry

- (a) **Protection of public interest from inadequate financing arrangements—** It is hereby found that a burden on and obstruction to [commerce](/usc/7/182.md?p=11) in [poultry](/usc/7/182.md?p=6) is caused by financing arrangements under which [live poultry dealers](/usc/7/182.md?p=10) encumber, give lenders [security](/usc/7/24.md?p=b) interest in, or place liens on, [poultry](/usc/7/182.md?p=6) obtained by such [persons](/usc/7/182.md?p=1) by purchase in cash sales or by [poultry growing arrangements](/usc/7/182.md?p=9), or on inventories of or receivables or proceeds from such [poultry](/usc/7/182.md?p=6) or [poultry products](/usc/7/182.md?p=7) therefrom, when payment is not made for the [poultry](/usc/7/182.md?p=6) and that such financing arrangements are contrary to the public interest. This section is intended to remedy such burden on and obstruction to [commerce](/usc/7/182.md?p=11) in [poultry](/usc/7/182.md?p=6) and protect the public interest.
- (b) **Poultry, inventories, receivables and proceeds held by dealer in trust for benefit of unpaid cash sellers or poultry growers—** All [poultry](/usc/7/182.md?p=6) obtained by a [live poultry dealer](/usc/7/182.md?p=10), by purchase in cash sales or by [poultry growing arrangement](/usc/7/182.md?p=9), and all inventories of, or receivables or proceeds from such [poultry](/usc/7/182.md?p=6) or [poultry products](/usc/7/182.md?p=7) derived therefrom, shall be held by such [live poultry dealer](/usc/7/182.md?p=10) in trust for the benefit of all unpaid cash sellers or [poultry growers](/usc/7/182.md?p=8) of such [poultry](/usc/7/182.md?p=6), until full payment has been received by such unpaid cash sellers or [poultry growers](/usc/7/182.md?p=8), unless such [live poultry dealer](/usc/7/182.md?p=10) does not have average annual sales of live [poultry](/usc/7/182.md?p=6), or average annual value of live [poultry](/usc/7/182.md?p=6) obtained by purchase or by [poultry growing arrangement](/usc/7/182.md?p=9), in excess of $100,000.
- (c) **Effect of dishonored instruments—** Payment shall not be considered to have been made if the cash seller or [poultry grower](/usc/7/182.md?p=8) receives a payment instrument which is dishonored.
- (d) **Preservation of trust benefit by seller or poultry grower—** The unpaid cash seller or [poultry grower](/usc/7/182.md?p=8) shall lose the benefit of such trust if, in the event that a payment instrument has not been received, within 30 days of the final date for making payment under [section 228b–1 of this title](/usc/7/228b–1.md), or within 15 business days after the seller or [poultry grower](/usc/7/182.md?p=8) has received notice that the payment instrument promptly presented for payment has been dishonored, the seller or [poultry grower](/usc/7/182.md?p=8) has not preserved his trust under this section. The trust shall be preserved by giving written notice to the [live poultry dealer](/usc/7/182.md?p=10) and by filing such notice with the [Secretary](/usc/7/182.md?p=2).
- (e) **Definition of cash sale—** For the purpose of this section, a cash sale means a sale in which the seller does not expressly extend credit to the buyer.

## Source credit

(Aug. 15, 1921, ch. 64, title II, § 207, as added Pub. L. 100–173, § 4, Nov. 23, 1987, 101 Stat. 918.)

## Notes

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective 90 days after Nov. 23, 1987, see section 12 of Pub. L. 100–173, set out as an Effective Date of 1987 Amendment note under section 182 of this title.