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" down South.

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 connected.

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 failed.

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 giving up."

-- Jim Cullen