Letter from Langdon: Farmer Protections Are About as Strong as a Puny Pig in a Poke
After an eight-year delay, the Obama administration released new rules to help poultry and hog farmers stand up to corporate abuses. Better late than never? Not if the Trump administration has its way.
When oppressed farmers from around the country get together, the conclusion they always come to is that “there ought to be a law.” As it turns out there is.
One, called the GIPSA, was enacted in 1921 as the Grain Inspection Packers and Stockyards Act with the stated purpose of creating uniform, honest grain inspection, as well as market oversight for livestock and poultry.
Government loves acronyms. In this case, serves double duty. That’s because the A in GIPSA stands for “act” when used to describe legislation — he Grain Inspections, Packers and Stockyard Acts. But it can also stand for “administration,” for Grain Inspections, Packers and Stockyards Administration, the government agency entrusted with enforcing the law. After close to eight years of delay, Ag Secretary Tom Vilsack finally issued some new GIPSA rules as he left USDA just ahead of the incoming Trump administration.
Those rules should offer protections to farmers of every shape, size, and color as they go about the business of growing and selling their stuff. Except … they’ve been put on hold again, this time by President Trump’s freeze on new regulations.
Farmers once produced everything we eat. They calved the cows, farrowed the sows, and hatched the chicks. Today the word “farmer” is applied with a looser meaning. Today a lot of what we grow is under contract with big corporations. Those companies own the feed and the animals that consume it (poultry and hogs, especially). But they don’t own the facilities or directly hire the labor that raises the corporations’ animals on the corporations’ feed.
That’s why big names like Tyson, Pilgrim’s Pride, and Smithfield are well known to consumers. Those names are prominently displayed on meat packaged for sale in grocery stores. But the farmer, the guy who did the work and paid for things like heated barns and automatic feeders and the land they sit on, is not.
The reason farmers no longer own much of today’s livestock or feed is that over the years, corporations have done very well by controlling markets where those things are bought and sold. Eventually there were so few corporations dealing in things like that, they were able to limit competition in open auctions where prices were set. In some price setting auctions today there is only one bidder, and that’s how prices for much of our animal based food are set.
That market power has translated into even more control by corporations that have been able to limit competition to the point that they could contract farmers to grow chickens and pigs, because farmers could not grow them on their own without a competitive market to sell into. While beef is still raised from conception to birth by family farmers and ranchers, some of the corporations that have mastered pork and poultry are doing about the same thing with beef markets by owning a large part of the cattle they slaughter.
The whole marketing thing has turned into a dead end for family farmers.
When corporations hire farmers, they use contracts that minimize the corporate liabilities while maximizing their control over the production process. Contracts specify terms of engagement between farmers and corporations. Over the years farmers have seen representation of their rights eroded by an unbalanced scale that leaves farmers holding the bag even when corporations fail to do their part by providing healthy animals and good feed to give them. Farmers simply have no power over that, and today most contracts deny farmers their day in court when their rights are abused.
GIPSA rules were supposed to fix that.
Farmers hope to make money feeding corporate livestock based on something called a tournament system. The system pits each farmer against the others. If one makes more, others make less. It’s a way to blame farmers for poor results so that profits the farmer counted on to pay his debts and provide a living disappear faster than you can say monopoly. When performance drops with lighter-weight animals or higher death loss, some farmers make less money. Or no money. Or go in the hole.
The feed and the animals, which common sense tells you make a huge difference in how the final product turns out, come from the corporation. Farmers bear the risk, and corporations make the profits.
You can’t make a silk purse from a sow’s ear. The tournament system unfairly penalizes farmers on the low end while minimizing returns for farmers in the middle and at the top.
All that GIPSA rules will do is to bind corporations to the same set of standards as the farmers who work under them. That’s why corporations and special interest groups with strong ties to the meat industry, like National Cattlemen’s Beef Association, oppose new rules, because they would establish rule of law protecting farmers’ rights to be paid fairly for what they do.
If the president of the bank gave you a key to the back door and said “help yourself,” why wouldn’t you? That’s pretty much what’s happened with beef, pork, and poultry as big packers have been helping themselves for a long time.
It’s true that some poultry and hog contract farmers don’t have many complaints. Some fear retaliation, some may be treated better than others, and some work for smaller corporations where specialty products and quality demands result in a team effort between farmers and big business that makes everybody happy. But five former chicken farmers are shining a light on the difference by suing their corporate masters under both the Sherman Antitrust Act and the Packers and Stockyards Act. The class action suit could end up improving life for tens of thousands of contract farmers if lead plaintiffs (Johnny Upchurch of Alabama, Jonathan Walters of Mississippi, Brad Carr of Texas, Craig Watts of North Carolina, and Haff Poultry in Oklahoma) are successful.
Their lawsuit compares raising chickens under contract to sharecroppers on the ragged edge of bankruptcy. But even a sharecropper gets to keep part of what he produced. All these guys got was the shaft. Or maybe a pig in a poke.
And sometimes not a very healthy one at that.
Richard Oswald is a fifth generation farmer and president of the Missouri Farmers Union.