Later On

A blog written for those whose interests more or less match mine.

Obama’s failure to protect farmers from predatory businesses

with 4 comments

Linda Kahn reports in The Washington Monthly:

In May 2010, Garry Staples left his chicken farm in Steele, Alabama, to take part in a historic hearing in Normal, an hour and a half away.

The decision to go wasn’t easy. The big processing companies that farmers rely on for their livelihood had made it known that even attending one of these hearings, much less speaking out at one, could mean trouble. For a chicken farmer, that’s no trivial thing. Getting on a processing company’s bad side can deal a serious blow to a farmer’s income—and even lose him the farm entirely. Still, Staples, a former Special Forces commander, and a number of other farmers decided to risk it. Many felt it was their only chance to talk directly to some of the highest-ranking officials in the country, including Attorney General Eric Holder and Agriculture Secretary Tom Vilsack, about the abusive practices now common in their industry. It was a chance, finally, to get some relief.

Staples and other farmers described a system that is worse in certain respects than sharecropping. It works like this: to do business nowadays, most chicken farmers need to contract with a processing company. The company delivers them feed and chicks, which farmers raise into full-size birds. The same company then buys those same birds back when they are full grown. The problem is that the big processing company is usually the only game in town. So it can—and usually does—call all the shots, dictating everything from what facilities a farmer builds on his farm to the price he receives for his full-size chickens.

As Staples explained, a processing company can require a farmer to assume substantial debt to pay for new chicken houses, tailored to the company’s exact specifications. Staples said he himself had borrowed $1.5 million. Then the company will offer that same farmer a sixty-day contract that can be changed or terminated by the company for any reason at any time. If a farmer gets fed up with the chronic uncertainty and tries to negotiate better terms, the company can punish him by sending lousy feed or sickly chicks, thereby depressing his earnings. Or the company can simply undercount the full-grown chickens’ weight. Whatever the particular abuse, because there are now so few processing companies—often only one or two in a farmer’s geographic area—there’s little way out of the cycle. For many chicken farmers in America, the only real option is to accept the terms, even if those terms are slowly driving them out of business. And even if those terms keep them from publicly speaking their minds.

Staples told the crowd at the hearing that he feared that Pilgrim’s Pride, the processing company with which he contracts, might punish him for voicing his troubles. Later, Christine Varney, the government’s chief antitrust regulator at the time, who was sitting in front of an American flag, spoke up. “Mr. Staples, let me say, I fully expect you will not experience retaliation by virtue of your presence here today,” she said, handing him a piece of paper with her phone number on it. “But if you do, you call me.” The hearing erupted into applause.

The message seemed to be clear: the highest brass in the Obama administration was listening closely to how America’s independent farmers are pushed around by big companies, and they were no longer going to tolerate it.

For the next seven months, Holder, Vilsack, Varney, and other officials from the Departments of Justice and Agriculture toured the country, hearing from more farmers and rural advocates. Along the way, they learned about concentration in the seed, pig, cattle, and dairy industries, as well as in poultry. During this same period, the USDA also worked on revising and updating the main law that regulates the livestock industries to prevent many of the unfair and deceptive practices that now threaten the dignity and survival of farmers and ranchers. From dairy farms in Wisconsin to cattle ranches in Montana, hopes soared.

But today, two years on, almost nothing has changed. Big processing companies remain free to treat independent poultry, cattle, and dairy producers largely as they please. . .

Continue reading. Where is the GOP on this? I continually hear how they want to protect small business owners: where are they in protecting these farmers?

Written by LeisureGuy

14 November 2012 at 11:14 am

4 Responses

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  1. Abusing farmers is an age old tradition in both parties. I think the worst of it started in the 70’s when interest rates were so high, and it’s just gone on for there.
    An interesting note is that both Romney and Obama have close ties with Monsanto. Romney has invested in the company, and Obama refuses to challenge the safety issues with GMO crops. In fact, the President went so far as to appoint Michael Taylor Deputy Commissioner for Foods. Michael Taylor, quite frankly, is utterly owned by Monsanto- this wikipedia article may be of interest:

    Jeff Beyea

    14 November 2012 at 6:01 pm

  2. Monsanto is an octopus. Obama is way too big-business-friendly for my taste: I want a president who’s more oriented toward protecting consumers. And the way the Obama Administration is letting companies ride rough-shod over these farmers is a disgrace.


    14 November 2012 at 6:06 pm

  3. I’ve been terribly disappointed in the Obama administration. I grew up in a Republican family, and generally felt that was the way to go. Then we got GW, and I was horrified at the stunts he pulled, in the name of being conservative. In 08 I got really excited about Obama, read both his books, and got involved in the campaign. This time around I found myself with 2 candidates that I was uncomfortable with, and though I ended up voting for Romney I wasn’t terribly upset when he lost. At this point I am really starting to realize that I’m more Libertarian than anything else…

    On a slightly different note, after reading your reviews of the Tradere razor I looked up the company. I’ve decided I need to own one, not only because of the reviews, but because it seems they are just the sort of company I like to support- small, USA made, without the big business overtones.

    Jeff Beyea

    14 November 2012 at 8:02 pm

  4. My complaints about the Obama Administration are mainly his protective stance toward the financial industry, his human rights failings (including the Presidential assassination list, which includes American citizens) which mainly hinge on lack of due process, and his refusal to prosecute war crimes (including torture). I also didn’t like the way he gave away the single-payer option without fighting for it.

    I am not libertarian in part because I simply don’t believe that the invisible hand of the market will correct wrongs (cf. the farmers who are currently being screwed by the invisible hand of the market): businesses are controlled only by thoughtful regulation and careful monitoring, otherwise their incessant drive to grow profits takes them on dark paths (cf. the Ford Pinto); and I believe that it’s wise to pool resources and work together. In other words, I believe in a social safety net as one reason we live together in communities and societies.

    But that’s me.


    14 November 2012 at 8:25 pm

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