About the Tyson Case in Last Week's News

by: Jill Richardson

Mon Jan 31, 2011 at 22:08:47 PM PST

Terry was a poultry farmer who brought together a group of area farmers and told them they had the right to complain about Tyson's practices. He also raised concerns directly with Tyson, among the world's largest meat companies.

Terry's story is one we should pay attention to. In the broiler industry, the farms are owned by farmers who contract with integrators, large companies like Tyson. The integrators provide the chicks, feed, and meds, and they make the rules about how the farmer raises the chickens and often require the farmers to make costly equipment upgrades in order to renew their contracts. The farmers, for their part, own the buildings, the equipment, and the dead birds and manure. They've got all of the debt and liability, while the integrator has the control. The farmers are paid for the amount of weight the chickens gain while in their custody.

Terry bought his farm in 2001, but only after getting assurances from a Tyson manager that the farm he was buying had a first-rate reputation. He says he was led to believe that he would not need to make major investments in the poultry equipment anytime soon.

Yet, by 2005, when Terry lost his contract with Tyson, he was already required by Tyson to make expensive upgrades in order to stay in business. The need for these upgrades has scared others away from buying his farm now that he can no longer get a contract.

Terry had conflicts with Tyson because he wanted to watch them weigh his birds, something he says he has a right to do under federal law and his contract with Tyson. He also organized local farmers to pool their complaints with Tyson and send them on to the USDA. Obviously, Tyson did not like this. So, they refused to sign any new contracts with Terry.

This basically leaves Terry with what must be hundreds of thousands of dollars in debt, perhaps more. That's the power integrators like Tyson have over farmers they contract with to keep them from complaining. And there is likely few or no other integrators in the area who Terry could contract with now that he's had a fallout with Tyson.

From the article:

Since Barack Obama became president, USDA has proposed rules that would limit the control chicken companies have over the farmers who raise birds for them and would make it easier for farmers to file suits under the 90-year-old Packers and Stockyards Act. The proposed changes would make clear that farmers don't need to prove industry-wide anticompetitive behavior to sue under the act.

I believe this refers to the so-called GIPSA rule. This case is an illustration of why the GIPSA rule is so important. It seems like Terry is doomed to financial ruin, but it would be great if the USDA would go forward with the reforms to keep this from happening to others. And there is no doubt that Terry is NOT unique. What happened to him would be much less important if he was the only one. Who knows how many others this has happened to, and how many contract farmers live in fear of complaining, instead putting up with unfair conditions.