Thanks for this detailed description of the problems faced by farmers who have poultry contracts. I recently received a request for advice from a young immigrant who was about to buy an acreage with poultry houses and a production contract. That request chilled me, because every news story about poultry contracts that I've seen in 10 years has been about the tragic consequences for the landowner/'farmer'. Those landowners have, often as not, been naive immigrants or second-career retirees who appeared to have been taken advantage of. I can only hope that my correspondent looked at the contract with open eyes and received competent legal advice about the risks before acting -- which would to my mind mean walking away.

What makes the problem worse for farmers is that they don't know the tricks (that incidentally break the Packers and Stockyards Act) of the trade until after they get into the business.  The old existing farmers selling the farm aren't going to tell them, even if they knew.  The banks are not going to tell them because the farmers can get Govt. funding from programs that guarentee new farmer's loans to the banks (under the auspices of beginner farmer loans funded by the USDA) or the banks can make sure they have enough equity in the property's non poultry value.  Companies like Pilgrims dance the dance with lenders as the above article described so banks will not get burned-- just the farmer and still lend to the Ponzi scheme.

I call it a Ponzi scheme because integrators like Pilgrims are able to pay new entrants more for the same chickens than existing farmers when the existing farmers have paid most of their farms off.  With the industry's payment formula where they pay new farmers more per lb. and not count that payment in the over all cost in the comparison formula by which farmers are  paid (farmers are compared to each other during the week their chickens go out ---farmers who are low cost producers take from those who are higher cost producers in pay per lb.)  The difference in pay can be very significant.  One farmer may get 3 cents per lb. and the other get 6 cents per lb.  On a farm selling a half a million lbs of birds per grow out, that is a difference that adds up.  The 3 cent farmer would get $15,000 per grow out and the 6 cent farmer would get $30,000 per grow out.  One can barely pay all his costs like propane, water, electricity---let alone get paid himself-- and the other makes a tidy profit.  The difference over 5 growouts per year is a whopping $75,000 per year.  It is the difference between  making money and losing money.  Thus, the new entrants in the ponzi scheme get in and make the investment because it looks to pay off, and the old farmers who already have the investment work for almost nothing just to saave their house and farm.

Add to the unfairness of paying new entrants more per lb. for the same chicken and the ponzi formula for pay which mines the equity out of the old farmer's assets and rewards it unfairly to new entrants because not all costs are counted the same in the comparison formula, the inputs the integrators control--quality of feed, quality of birds, and even honest weighing of those inputs---and you see how they operate the backwards Ponzi scheme.   When Tyson was caught red handed making up the numbers on weights of farmer's chickens by a conscientious citizen working at one of their plants on the Delmarva Penninsula, there was no penalty imposed by GIPSA.  They were politically protected.  The worker lamented that she was worried that with no consequence, it would just happen again (spare the rod, spoil the child).  The politicians supposedly overseeing the industry looked the other way as they cashed their campaign checks from the industry.

The Grain Inspection Packers and Stockyards Act (GIPSA) who is supposed to be enforcing the Packers and Stockyards Act is a joke.  The way they run that run that agency shows them to be more like legal counsel and aid to the integrators than the farmers who they are supposed to protect by enforcing the Packers and Stockyards Act.  No wonder, all investigations are  designed in D. C. by the upper legal management ( a recent GA0--Government Accountability Office-- criticism) of appointed personell like the recently departed JoAnn Waterfield (who left after a very critical report from the Inspector General of the USDA).  JoAnn Waterfield's office was criticised by hiding investigations and over reporting investigations that never occurred.  There was no accountability held over JoAnn Waterfield so the problem persists.

Many farmers used the agency's now known to be "fixed" reports to Congress of the number and character of complaints made by farmers to the Grain Inspection Packers and Stockyard's reports to Congress, thus hiding the risks associated for farmer investors in the Ponzi scheme.  It was the fraudulent official stamp of credibility given by the government for insuring farmer's rights under the Packers and Stockyard's Act by the government itself.

To make sure all this goes off without a hitch, the integrators and their companies grease the wheels of Congress.  The former House of Representatives, Mr. Bonita from Texas, chair of the Agriculture Committee in the House and others were given hundred thousand dollar contributions or more to look the other way.  Members of the Senate were also paid off.  Senator John Cornyn of Texas was paid by the industry over a hundred thousand dollars for his ability to tow industry wishes-- against farmers-- and against consumers--by making sure the Country Of Origin Labeling (COOL) was derailed.  Senator Thad Cochrane of Mississippi played ball by making sure that the COOL law passed by Congress was not enforced by not funding it.  One needs only to follow the money.  Millions was spent on Congress:

http://www.citizen.org/pressroom/release.cfm?ID=2045

This corporatism, money and power has deeper roots that his humble poultry farmer uncovered---after getting hooked in the Ponzi scheme.

Beginning farmers have no chance under this corrupt system of crony capitalism.  It also disrespects the ideals our troops in the field  fight for when we send them overseas to protect democracy. We all end up looking like hypcrites to those who see and are experiencing what the leaders of our country are offering us in this form of governance.  If they would treat farmers in this way, just think of what they would to the regular guy who has the average information on the goings on in our capital and the weak media coverage that has become the norm today.  Most people are not concerned about the rich getting richer----unless it is found out that they are stealing it from others.  Large companies are using the laws of economics and a total disregard for the laws passed in the Robber Barron days (like the Packers and Stockyards Act) to prevent them from controlling all the benefits from our great economy.

"Corporatism should be more accurately defined as fascism, as it is the merging of corporate and state power"------Benito Mussolini.

Although I am worried about my own farm because of Tyson's actions and recent court decisions undoing the meaning of the Packers and Stockyards Act (part of the Judiciary Committee's responsibility of oversight), I am also worried about what our country is becoming.  The United States is becoming more like Mexico in its political corruption where the rich are continually advantaged over the rest.  It does not bode well for the average American, whether they are a farmer or not.

 

 

Dear Lou,

I think we are missing the real answer to the illegal immigration problem.  First we have to define the problem correctly.  Mexicans want to come to the U.S. because their lives are easier in the U.S.  and they have more opportunities to provide for their families in the U.S. than in Mexico.  While railing about illegal aliens and all the consequences immigration has, we are not addressing the real problem as defined above.  The U.S. should have a national policy towards Mexico that solves the problem of the disparity of wealth, power and opportunity in Mexico compared to the U.S.  Instead of addressing these problems in Mexico, namely the suppression of opportunities by those who are not paying off Mexican officials, we are embracing the paying off of those in power like corporate campaign contributions, special think tank groups that funnel money to those in the media (note Senator Grassley's charge against the Beltway Boys in the campaign against ethanol, and other more nefarious means.
In my own case, Arlen Specter has been able to stack the cards against these corporations.  With his help, the republicans put in Sandy Mattice as a U.S. attorney in order to get Tyson off of their illegal alien smuggling case in Shelbyville, TN.  After Sandy Mattice got Tyson out of that case, and murder was involved, president Bush (maybe unknowingly but with the push of Arlen Specter) appointed Sandy Mattice as a U.S. District Judge.  From that position, Judge Mattice has blocked all legal actions against Tyson for their illegal alien smuggling (with reference to workers suing Tyson for lowering wages because of their illegal alien hiring) and my case against Tyson regarding Tyson cheating the family farmers who are producing the chickens they sell to consumers.  Senator Tom Harkin asked for an investigation into GIPSA (Grain Inspection, Packers and Stockyards Administration) after allegations that the head of GIPSA, JoAnn Waterfield, was lying to Congress about the agency handling farmer complaints to them.  JoAnn Waterfield left office never to be found after the report came out by the OIG (Office of Investigator General) that was damning to the agency.  "There is a new head of GIPSA, but the same old corruption still exists.

I am a family farmer, and president of the TN Poultry Grower's Association who made these complaints.  My friend, Scott Hamilton, testified in front of Congress on the Agriculture Committee's investigation into GIPSA and he later committed suicide because NOTHING HAS CHANGED!!!

How many lives does it take to keep Tyson their image and their stranglehold on our food supply---they are the largest meat supplier in the world.

I am tired of billionaires breaking all the rules and laws and getting away with it.  What difference is there between the U.S. and Mexico in this regard?

As long as we have politicians and not statesmen, Rev. Wright's comments will ring true---that we are asking for God's blessing when our actions ask for damnation.  The issue in the media then became the audacity of Rev. Wright to profess the truth--- that we deserve damnation by our actions.  It is a pastor's (or a prophet, if you want to call him that) responsibility to point out the unGodliness in our culture that we do not recognize.  It is his responsibility as a minister.

We are so far away from the truth of what is happening in our country that it isn't funny anymore.  It has real consequences.  The U.S. citizen workers at Tyson's facilities are bearing the burden.  Many of them are praying about their economic situation.  Man is not listening.  Be sure that God does.  It certainly might mean the damnation of our country, or its government's flight from the ideals and principles that have made it great.  Ideas of justice, the rule of law, equality.  They are becoming more and more meaningless as we emulate Mexico instead of trying to change it for the average Mexican.  

There are two golden rules at play here.  One is Jesus's golden rule of treating others as you would have them treat you.  The other is he who has the gold rules.  The further we get away from Jesus's golden rule and the more we go towards the world's golden rule, the more our country will shift from a blessing to damnation.

It is clear to me what direction we have been heading.  We have to turn this around.

Sorry about the typos.  My computer keys are sticking.

 A T Terry above said,

"I think we are missing the real answer to the illegal immigration problem.  First we have to define the problem correctly.  Mexicans want to come to the U.S. because their lives are easier in the U.S.  and they have more opportunities to provide for their families in the U.S. than in Mexico.  While railing about illegal aliens and all the consequences immigration has, we are not addressing the real problem as defined above."

 This is saying a lot about nothing. The problem as you define it is,

"Mexicans want to come to the U.S. because their lives are easier in the U.S.  and they have more opportunities to provide for their families in the U.S. than in Mexico."

OK, you tell us WHY mexicans want to come to the U.S. We already know WHY they want to come here. It's America, the greatest nation on earth. That doesn't define the problem. That defines the motive. Mexico sucks. 

Actions have consequences. Consequences need to be discussed which you clearly want no part of. My solution is this: Mexicans should straighten out their country if they don't like it's current state. Simple but not easy. It is THEIR problem that Mexico just plain sucks. Mexico is a country FULL of natural resources and there is no reason why Mexico should suck all the way around as it does. 

Mexico was discovered along with the rest of the New World and is blessed with a wealth of natural resources. Why is it such a sh*t hole? Amerca was discovered at the same time. Look, lets not ruin America. We should help our Mexican friends as much as possible but we should give our damn country away. 

We've got problems to fix here, and the Mexicans have problems to fix there. I think Mexicans should go back to Mexico and make it a better place for themselves, their neighbors and the world. 

 

Hello Dan, I'm also interested in the studying of pilgrim's and I found good ideas about them..I've put the site in the homepage...hope you find it interesting.