Shut Down Chicken Racketeers
Now that the FBI appears to have a suspect in the Unabomer case, they should
peel off a few agents to check into allegations of racketeering that threatens
poultry growers who try to fight for their rights in the "Broiler Belt"
Larry McKnight, a chicken farmer in Forest, Miss., received a letter on
March 27 from the company with which he had dealt for nearly 17 years, notifying
him that they were dropping him as a grower. The company cited the high
price of corn and the Russian embargo on chickens in its decision to reduce
its number of growers. So they cut McKnight off, despite the fact that his
production has been better than average in comparison with other growers.
That left McKnight with a farm whose debts outstrip the $350,000 value of
the property, and practically no way to make a living. In the poultry industry,
the growers are at the mercy of the companies, which provide the chicks,
feed and drugs but the farmers must supply chicken houses, which may cost
$125,000 each, and they must grow the chickens according to company specifications.
After a seven-week growing season, the grower is paid based on the increase
in weight, usually 15 to 20 cents per bird. But the grower also may be terminated
and left with no way to service the debt.
"I had already been told when the chickens were going to be placed
back [on the farm]," McKnight said. "I had cleaned out my houses
and they had sent a spray truck out here and had washed down my houses,
and I was out there working and getting ready to get the birds back in ...
and one of them drove up out here and [handed me the letter]."
McKnight does not believe it is a coincidence that he is the president of
the Mississippi Contract Growers Association. Nor does he think it is an
accident that he has been the point man for the growers' attempts to get
the Mississippi Legislature to enact regulation of the poultry industry.
After he became president of the association two years ago, another company
had dropped him, which caused him to lose his second farm, which also had
been producing at better than average, McKnight said. And the fact that
his predecessor as president of the state growers' association also lost
his farm leads McKnight and other growers to believe that the events are
The National Contract Poultry Growers Association has filed a formal complaint
against Lady Forest Farms Inc. of Forest, Miss., alleging violations of
the Packers and Stockyards Act of 1921, which provides that growers cannot
be terminated for non-economic reasons, and of the Agricultural Fair Practices
Act of 1967, which protects the right to organize. "Because of this
high profile position working for improvements in grower/processor relationships,
Mr. McKnight has apparently become a threat to the poultry processors in
the state," the association's executive director, John Morrison, wrote
in a March 28 letter to Secretary of Agriculture Dan Glickman.
The association is asking that the Secretary of Agriculture require Lady
Forest Farms to immediately place birds on McKnight's farm to prevent irreparable
financial harm to him; enjoin Lady Forest against use of discriminatory
practices which violate federal law; and initiate a Justice Department investigation
to determine if processors have conspired against McKnight.
Readers of The Progressive Populist may recall from the April issue
that McKnight was hopeful that, although he had lost one farm, presumably
because of his position with the growers' association, he could avoid problems
with Lady Forest Farms. "I grow for a small, family-owned poultry operation
and they've treated me fairly," he had said in mid-March. When a few
weeks later he got the termination letter, he said, "You could have
pushed me over with a feather. I've never had trouble with this company,
never had a cross word with 'em, no problem whatsoever and this came totally
out of the blue. I've never been told that my performance was poor and I've
never been told that they had any kind of problems with me whatsoever. Of
course my contention is that they cut me off because of the work I'm doing
at the Capitol."
In Jackson, about the same time McKnight was being terminated, the growers
had managed to get a bill through the Legislature that would have set up
an panel, including one processor, one grower, the chair of the poultry
science department at Mississippi State University and the executive director
of the state Agribusiness Council, to advise the state commissioner of agriculture
on setting up fair practices in the industry. The commissioner would then
investigate complaints and arbitrate disputes.
"We felt we had a good bill. It wasn't everything we wanted, but we
felt the Commissioner would be very fair to both sides," McKnight said.
But Republican Gov. Kirk Fordice vetoed the compromise bill, calling it
a dispute between two family members. "He had the same old Republican
line about 'less government and no more regulation' kind of crap. We were
never allowed in to talk to the Governor before he vetoed the bill. The
other side got in to see him on a regular basis, but the best we could do
was to talk with his chief of staff." An attempt to override the veto
Mississippi is not an isolated case as far as the risks of organizing. Morrison,
whose office is in Ruston, La., said he has received complaints from 40
growers from nine states who were involved in organizing the association
and who believe they were targeted in retaliation for their efforts. Presidents
of state growers' associations in Arkansas and Louisiana were forced out
of business, as was a founder of the Texas association. Presidents of the
Oklahoma and Florida growers were cut off from birds and later were reinstated
- in the Florida case by court order.
For more than a decade lawsuits have been cropping up throughout the South
alleging fraud against growers. A federal judge in Florida has approved
a class-action settlement that requires Cargill Inc. to pay about $2.6 million
in cash and benefits to poultry producers who served a processing plant
from 1980 to 1988. The lawsuit, filed in 1989 by growers in Georgia and
Florida, alleged that Cargill had intentionally underweighed poultry at
its Jacksonville, Fla., plant.
In December 1989 the U.S. Department of Agriculture filed a separate lawsuit
alleging that Cargill had illegally terminated Arthur Gaskins, president
of the Northeast Florida Broiler Growers Association, for organizing the
lawsuit against Cargill. In 1990, the court ordered Gaskins reinstated.
In 1992, the court certified the lawsuit as a class action involving 143
growers and ConAgra recently settled the case, admitting no liability.
In another case, Alabama growers alleged fraud and breach of contract against
ConAgra Inc., doing business as C-Poultry Co. Inc., alleging that the buyer
had misweighed broilers over an eight-year period. The lawsuit was filed
in state court in Coffee County, Ala. in 1982 and the case was moved to
federal court in 1988. The federal court jury found in favor of the growers
and awarded the growers $4,550,000 in compensatory damages and $9,100,000
in punitive damages. Growers in Georgia have filed a lawsuit in federal
court making similar claims against ConAgra there. That case has yet to
be certified as a class action.
There is a strong odor - literally and figuratively - about the poultry
industry in the Broiler Belt. Racketeering is not too strong a word to apply
to industrialists who not only would cheat their growers at the scales but
then retaliate against those growers who seek redress, or pressure other
companies to retaliate against growers whom they may think are causing trouble.
If federal authorities find evidence of conspiracy, that evidence should
be brought before a grand jury, the skullduggers should be brought to justice
and the victimized growers should be made whole.
This case offers President Bill Clinton a good opportunity to show his independence
of food magnate Don Tyson. The chairman of Tyson Foods, the nation's largest
poultry producer, has supported Clinton, on and off, ever since Clinton
ran for Congress in 1974. In 1992 Tyson family members and company executives
contributed $29,000 to Clinton's presidential campaign.
Charles Lewis noted in The Buying of the President, an examination of the
special interests behind the Democratic and Republican candidates for President
this year, that after Clinton took office Tyson provided Agriculture Secretary
Mike Espy with plane rides, meals and lodging as well as $6,000 from Tyson
and company executives to help retire the campaign debt of Espy's brother,
who ran for Congress in 1993. That same year the Department of Agriculture
shelved work on new poultry inspection regulations. But Espy was forced
to resign his position and an independent counsel was named to investigate
those favors. Meanwhile, Tyson has reportedly become disenchanted with Clinton
and has been contributing to Dole's campaign, although growers are not holding
their breath in anticipation of a sea-change in the Clinton administration's
attitudes toward poultry producers.
If the companies conspired to terminate McKnight and his predecessor in
order to intimidate the growers, McKnight said, "their intention failed
miserably, because all it does was made [the growers] more determined."
His fellow growers are taking up a collection to try to help him keep his
farm, although he realizes they are in little better position than he is.
"They're just like us. They're one flock of chickens from being in
the same situation as we are. It's hard enough to take money from them the
way it is. If we don't get this settled quickly, we'll just lose our farm
and I'll get a job in town, whatever, because I just can't keep taking money
from these folks."
[For more information on how to help, contact the National Contract Poultry
Growers Association at 1-800-259-8100.]
Even if he is forced to sue the company, he realizes that it will be many
years before he can expect to see the inside of a courtroom. His farm will
be long gone by then.
"I've put 24 years of my life into this farm. It's our family home
- my wife and I worked our rear ends off to make this our home, but the
poultry growers can't pay me to stay [in business without] chickens. It's
a very humbling experience."
But they don't plan to give up, he said.
"I think I speak for the vast majority of the people in the association
that it was worth the struggle and if we can't get something worked out
with the Governor then we'll be back next year and we'll be back the year
after that. Fordice is a lame duck and it might take three years but he
won't be Governor forever, and if it takes another three years before we
can get a bill past [the Governor], that's what we'll do, but we're never
-- Jim Cullen