The plucking of the American chicken farmer


From the big poultry companies comes a new twist on capitalism: Farmers put up half the money, companies get all the power.

February 28, 1999|By Dan Fesperman and Kate Shatzkin | The Baltimore Sun

To Ed Probst, the poultry company's invitation sounded like the fulfillment of a dream: Come on down to Alabama and be a chicken farmer. Share the wealth. Be your own boss. Having scanned the horizon of America's poultry empire from the plains of Delmarva to the foothills of the Ozarks, Probst knew he'd need $250,000 just to get started. He'd be on call 24 hours a day. But he counted on succeeding the same way farmers had for centuries: Live off the land, pay your debts, then enjoy the fruits of independence.

So, in 1992 Probst sold his home in Pennsylvania and staked his family's future on four used chicken houses near the Alabama town of Luverne.

With his wife, Georgia, and their children pitching in, Probst began to turn around a once lackluster farm. But every year the poultry company - ConAgra - wanted more, eventually demanding that he install $200,000 worth of new equipment and sign away his right to sue if things went wrong.

Probst decided he'd had enough, and in 1996 he put his farm up for sale. He then got his last, harshest lesson: Without ConAgra's approval, his farm was virtually worthless. The company refused to offer a chicken-growing contract to any prospective buyer, and within three months the Probsts lost everything to foreclosure.

Only with the help of a collection by their Baptist church did they make it out of town, hauling their last possessions on a rented truck to a relative's house in San Angelo, Texas.

``They were toying with us, that's what they were doing,'' Probst said later. ``They make it look good, and it's so deceiving. And once they have you, once you sign that contract, either you grow chickens for them or you don't grow them at all.''

The ruination of the Probsts is an all too familiar tale among America's 30,000 contract chicken growers. Like Probst, they must invest hundreds of thousands of dollars in land and equipment just to get into the business. But once a farmer signs a contract to grow chickens, he finds himself at the bottom of a rigid pecking order, in which the poultry company controls his fortunes to the last detail.

Dictating much of that power today are the five largest companies - Tyson Foods, Gold Kist, Perdue Farms, Pilgrim's Pride and ConAgra - controlling more than half the business of this wealthy industry. Together they have transformed a barnyard byproduct into the cheap, plentiful centerpiece of the national diet.

But while the companies have been flourishing on Wall Street and extending their political reach to the White House, the growers have been increasingly beleaguered: The public denounces them as polluters whose chicken manure fouls waterways, while the poultry companies squeeze them ever tighter for profits. Formerly able to share in the bounty of an industry on the rise, they have become the land-owning serfs in an agricultural feudal system.

An eight-month Sun investigation across 13 states has found:

* A new chicken farmer today can expect an annual net income of only $8,160 - about half the poverty level for a family of four - until he has paid off the 15-year loan he took to get into the business, and even that estimate may be overly optimistic. Fewer than half of Delmarva's chicken farmers say they're making enough to meet expenses.

* Getting into the business is more expensive than ever, requiring an investment of about $257,000. In return, a farmer is saddled with round-the-clock responsibility, daily collecting dead birds by hand during strolls through dust and ankle-deep manure. A farmer battles heat waves, power outages and outbreaks of avian disease, and his every move is controlled by the vagaries of a contract that can be canceled virtually anytime, cutting income to zero.

* A chicken farmer's first big loan is almost never his last. Companies routinely require farmers to install expensive and sometimes unproved new equipment. The additional debt means most chicken houses aren't paid for until they've reached the age when productivity - and income - generally begin to decline.

* Some companies have systematically cheated growers at the place that matters most on payday - the scales where chickens are weighed. Class action lawsuits in four states uncovered evidence that such cheating went on for years. Yet law enforcement agencies launched no criminal probes.

* The chicken farmer has virtually no one in government to help him. The lone federal agency charged with protecting his interests has missed evidence of fraud. Even when empowered to investigate, the U.S. Department of Agriculture's Grain Inspection, Packers and Stockyards Administration almost never produces tangible results. Despite fielding more than 1,000 complaints from chicken farmers, the agency has gone to court on their behalf only twice. The only resulting financial penalty: $477, paid by a small poultry company in South Carolina.

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