Poultry growers seek rights in Mississippi
Larry McKnight became president of a farmer's group,
By Jim Cullen
then lost his contract
Over 17 years as a poultry grower, Larry McKnight had expanded from his
base near Forest, Miss., to a second farm in nearby Sebastopol. He had 11
chicken houses, with a capital investment of $650,000 and he was growing
1.5 million chickens a year. For all that, he was netting only $20,000 to
$25,000 a year, because the poultry processors call all the shots.
"They put the contract on the table and we have to sign because our
loan is tied up in those houses," McKnight said.
Until the contract is pulled, that is.
Poultry "integrators" typically provide the chicks, feed and drugs
but they require growers to supply houses that meet the company's specifications.
Each new house may cost the grower $125,000. After a seven-week growing
period, the company may decide not to renew the contract, leaving the grower
with the debt.
The conditions are familiar throughout the "Broiler Belt" from
Texas and Oklahoma southeast, where 90 percent of the nation's chickens
are produced. [See "Chicken Fat Goes to Processors," The Progressive
Populist February 1996.]
Mississippi growers recently got their state House of Representatives to
spell out some of the rights and responsibilities of growers and processors.
Among other things, the bill would have required companies to give growers
notice of termination and to pay off the capital investment of growers who
were terminated without cause.
But the Senate Agriculture Committee watered down the House bill to create
a mediation board to hear complaints and refer them to arbitration. Even
that compromise was too much for the agribusiness interests who put pressure
on senators to kill the bill.
One Mississippi poultry grower, who asked not be identified for fear of
retaliation by his "integrator," said six senators flaked on the
growers in the half-hour between the time they talked to them in the lobby
and the 27-22 vote on March 11 to study the issue at least until after the
general election. The growers still hope that House and Senate conferees
will restore the bill.
"We've got everybody in the state of Mississippi against us, except
the hunting dogs association, and I'm not sure about them," the grower
said. "But the problems are real."
Actually, the poultry growers have a few other allies: loggers, Gulf
Coast commercial fishermen and the formidable Farm Bureau Federation, which
is not noted for siding with small farmers over agribusiness interests.
McKnight, president of the 2,800-member Mississippi Contract Poultry Growers
Association, said they were running up against not only a powerful industry
that is used to getting its own way, but also the prevailing view among
people in power that government should not interfere in people's lives.
The poultry growers had been working to obtain legislative relief since
1994 but the processors were resisting. "The integrators told people
who had contracts and were building new [chicken] houses if the bill passed,
the wouldn't be adding those houses and the growers were told the companies
would leave Mississippi. Some people bought into that argument," McKnight
In 1994 the growers had run up against the opposition of the Farm Bureau.
They were told, the issue was not among the resolutions in their policy
book. "So we backed up and became part of the Farm Bureau and changed
their policy book," McKnight said.
The loggers and fishermen have similar situations in their businesses, McKnight
said. They were looking for support when they seek relief from what they
see as attempts to regulate them out of business.
This year the companies also broadened their base, enlisting the Mississippi
Manufactur-ers Association and the Mississippi Economic Council. But the
growers managed to get the bill through the House. "Because the House
is much closer to the people, they understand the types of contracts we
were talking about," McKnight said.
Gov. Kirk Fordice, a Republican who is in the construction business, indicated
he would veto the House bill, but growers hoped he would go along with the
mediation plan in the Senate version since that is often used in disputes
in the building trades.
Meanwhile, the growers are still under pressure and McKnight's activism
has done his business no good.
"Two years ago when I went over there as president of the association
my farm in Sebastopol was at or above average [in performance grading by
the integrator]. Then after I became president it went below average and
my contract was terminated. All of a sudden I couldn't grow a good chicken
anymore." He noted that his predecessor as president also was terminated,
lost his farm and had to file for bankruptcy.
McKnight, who is 45, has filed a lawsuit in federal court, alleging that
the integrators stopped doing business with him because of his activities
with the association. His remaining farm is still in business. "I grow
for a small family-owned poultry operation and they've treated me fairly,"
John Morrison, executive director of the National Contract Poultry
Growers Association in Ruston, La., said relief for growers tends to boil
down to two types of bills. One spells out rights and responsibilities in
the contracts to protect growers, as a Minnesota law and the House version
of the Mississippi bill did. But he said growers generally prefer "empowering"
legislation that requires processors to engage in good-faith bargaining,
such as California, Washington, Oregon, Maine and Michigan have enacted.
An attempt to amend the federal Agricultural Fair Practices Act with an
empowring provision to require good-faith bargaining has a relatively broad
base of support by farm groups but it is dormant in Congress.
"Growers need some type of empowerment," Morrison said. "If
we don't give them some type of equalizing power we're going to be tied
up entirely in vertically integrated industry or they're going toe limited
to the terms the companies offer."
If growers had enough leverage to increase the price of chickens by a few
cents a bird, McKnight said, it could double the net income of some growers.
In the states of Washington and Oregon, processors are relatively smaller
and family-owned but they are required to negotiate their contracts in good-faith
and growers receive 30 to 32 cents per bird, Morrison said. That compares
with 15 to 20 cents per bird in much of the "Broiler Belt" in
the South, from Texas and Oklahoma through the Southeast, where 90 percent
of chickens are produced.
McKnight once worked as a supervisor in a poultry processing plant and recognizes
that workers in the plants have their problems, but he said that is a separate
issue. Labor unions are not part of the growers' coalition; he said some
allies joined the cause with the provision that unions were not involved.
Morrison said the growers have had preliminary discussions with labor organizations.
They have not yet approached consumer organizations, but he is not ruling
anybody out. "We've got to have every ally we can find in this battle,"
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