Tags

, , , , , , , , , , , , , , , ,

From ProPublica.org:
How a Top Chicken Company Cut Off Black Farmers, One by One
The Trump administration has weakened legal protections for farmers and eased off enforcing rules on powerful meat companies.
by Isaac Arnsdorf June 26, 5 a.m. EDT

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

After years of working as a sheriff’s deputy and a car dealership manager, John Ingrum used his savings to buy a farm some 50 miles east of Jackson, Mississippi. He planned to raise horses on the land and leave the property to his son.

The farm, named Lovin’ Acres, came with a few chicken houses, which didn’t really interest Ingrum. But then a man showed up from Koch Foods, the country’s fifth-largest poultry processor and one of the main chicken companies in Mississippi. Koch Foods would deliver flocks and feed — all Ingrum would have to do is house the chicks for a few weeks while they grew big enough to slaughter. The company representative wowed Ingrum with projections for the stream of income he could earn, Ingrum recalled in an interview.

What Ingrum didn’t know was that those financial projections overlooked many realities of modern farming in the U.S., where much of the country’s agricultural output is controlled by a handful of giant companies. The numbers didn’t reflect the debt he might have to incur to configure his chicken houses to the company’s specifications. Nor did they reflect the risk that the chicks could show up sick or dead, or that the company could simply stop delivering flocks.

And that growing concentration of corporate power in agriculture would only add to the long odds Ingrum, as a black farmer, faced in the United States, where just 1.3% of the country’s farmers are black.

The shadow of slavery, sharecropping and Jim Crow has left black farmers in an especially precarious position. Their farms tend to be smaller and their sales lower than the national average, according to data from the U.S. Department of Agriculture. While white farmers benefited from government assistance such as the Homestead Act and land-grant universities, black farmers were largely excluded from owning land and accumulating wealth. In recent decades, black farmers accused the USDA of discriminating against them by denying them loans or forcing them to wait longer, resulting in a class-action lawsuit that settled for more than $1 billion.

Along with these historical disadvantages, black farmers say they have also encountered bias in dealing with some of the corporate giants that control their livelihood. In complaints filed with the USDA between 2010 and 2015, Ingrum and another black farmer in Mississippi said Koch Foods discriminated against them and used its market control to drive them out of business.

After the complaints by the farmers, an investigator for the USDA, which is responsible for regulating the industry, looked into Koch Foods’ dealings with those farmers and found “evidence of unjust discrimination,” according to a 700-page case file obtained by ProPublica. The investigator concluded that Koch Foods violated a law governing meat companies’ business practices.

The Trump administration has cut back on enforcing this law, with the USDA now conducting fewer investigations and imposing fewer fines, as ProPublica has reported. Koch Foods hasn’t faced any penalty.

Koch Foods declined to provide an interview with any of its executives or to answer detailed questions about its dealings with black farmers in Mississippi. A lawyer for the company said it denies wrongdoing.

The five largest chicken companies now make up 61% of the market, compared with 34% in the hands of the top four firms in 1986. As the biggest companies expanded their control, they raised farmers’ average pay by a mere 2.5 cents a pound from 1988 to 2016, while the wholesale price of chicken rose by 17.4 cents a pound, according to data from the USDA and the National Chicken Council.

Mississippi is the fifth-largest poultry-producing state, with more than 1,300 chicken farms. In a state where the population is 38% black, only 96 of those farms were operated by African Americans in 2012, the most recent USDA data available. From 2009 to 2017, Koch Foods went from having contracts with four black farmers in Mississippi to zero.

Koch (pronounced “cook”) Foods is based outside Chicago and supplies chicken, often sold under other brands, to major restaurants and retailers such as Burger King, Kroger and Walmart. The company, which is privately held, is not part of the business empire of the conservative billionaires Charles Koch and David Koch. The owner of Koch Foods, Joseph Grendys, has a fortune that Forbes estimates at $3.1 billion.

After Ingrum signed his contract to grow chickens for Koch Foods, in 2002, different company representatives kept coming with lists of expensive modifications they wanted Ingrum to make, according to an affidavit he provided to the USDA investigator. After Ingrum met all the specifications, the next representative went back on what the previous one said and wanted things done a different way, Ingrum said in the affidavit.

Chicken companies usually say they update their specifications to improve animal welfare or respond to consumer preferences like avoiding antibiotics. But Ingrum couldn’t find much logic in the changes Koch Foods wanted him to make. One service technician directed Ingrum to install lights in one place, the next one someplace else. Another time, the company wanted Ingrum to move a power line, even though it was out of the way of the feed trucks and bins. That cost him $6,000.

According to Ingrum’s affidavit, when he met with a manager about the shifting demands, the manager said, derisively, “I had a couple of y’all when I was at Sanderson,” another big chicken company. Ingrum asked the manager, who was white, what he meant by that. The manager didn’t answer Ingrum. Reached by ProPublica on his cellphone, the manager hung up.

Ingrum suspected that the truck drivers who delivered feed were shortchanging him, so he installed sensors to alert him when the drivers arrived. In 2007, according to his affidavit, Ingrum caught a driver failing to fill a whole feed bin. The company brushed it off as an honest mistake. But Ingrum had heard of drivers asking farmers for payoffs to get more feed, according to the affidavit.

In 2009, Ingrum spent $50,000 on renovations that Koch wanted. Then the company wanted Ingrum to rebuild his compost shed. That was another $5,000. Then Koch Foods said the shed had to be certified by a government inspector. Ingrum called the agency, which said the shed didn’t require approval and they only sent an inspector out once a year.

With Koch Foods delivering flocks to Ingrum’s farm less frequently than expected, he was making less money and falling behind on his loan payments. He looked into selling his farm. When a prospective buyer from Florida called Koch to inquire about a contract with them, a Koch employee scared him off by saying Ingrum’s farm needed $100,000 in repairs, according to Ingrum’s affidavit. The employee also swore at Ingrum’s real estate agent and spread a rumor that the bank had foreclosed, according to the affidavit. That wasn’t true, but it was becoming increasingly hard to avoid.

In 2010, Ingrum heard that the Obama administration was making a push to help farmers who were getting squeezed by consolidation in agriculture. Attorney General Eric Holder and Agriculture Secretary Tom Vilsack were going around the country to hear from farmers about the problems in their markets. When they came to neighboring Alabama to meet with chicken farmers, Ingrum went and spoke on a panel.

At the hearing, Ingrum recounted how the company would pay him less if the birds were sick or underfed, even though the company supplied the chicks and the feed. Ingrum said he’d received a tray of 100 chicks with 35 to 40 already dead. Another time, he ran out of feed for three days and the chickens started eating one another.

“There’s no way it could be fair,” he said at the hearing, according to the transcript. “I had no control over the feed that they brought me.”

That night, when Ingrum returned home to Lovin’ Acres Farm, he found a note from Koch Foods saying his contract had expired.

The USDA investigator later inquired whether it was “solely a coincidence” that Koch Foods left the note at Ingrum’s farm on the same day he attended the hearing 300 miles away. A company supervisor said he “could not say.”

“I never got another chicken after going to that meeting over there in Alabama,” Ingrum, 55, said in an interview. “They put me slap out of business.”

As Ingrum ran out of money, the power company cut his electricity, but he refused to leave for three months. His former colleagues at the sheriff’s office had to come remove him. For the next five years, he stayed with relatives until he scraped together enough money from working at a car dealership to get back on his feet.

“Twenty years, everything I worked for, I lost it in one summer,” Ingrum said. “It just ruined me.”

Around the same time, two other black farmers in the area also stopped growing chickens for Koch Foods. Out of 173 chicken farmers under contract with Koch Foods in Mississippi, there was only one African American left. His name was Carlton Sanders.

Ingrum said he warned Sanders: “They’re coming after you, Carlton. You next.”

Sanders’ farm was in a nearby town called Lena. He had been in the business since 1992. Back then, he worked with a local family business called BC Rogers, which he said always treated him professionally. He used the chicken manure to fertilize his vegetable garden, and he took pride in his trees growing figs, pears and apricots. “I just had everything set,” Sanders said.

When Koch Foods bought BC Rogers in 2001, everything changed, Sanders said. Sanders’ performance was above average, according to the ranking system that the company used to pay farmers. But he felt singled out for disadvantages.

“I’ve never been treated like that by anybody,” Sanders, 63, said. “It was just like I was in hell with them.”

In 2014, Koch Foods wanted Sanders to make $105,000 worth of improvements, according to the USDA case file. Then Sanders borrowed an additional $93,000 to buy new curtains, insulation, cables and heaters. Suddenly, he owed a total of $295,000, but he made his payments on time, according to financial records reviewed by ProPublica.

” CC-BY-NC-ND-3.0: https://www.propublica.org/article/how-a-top-chicken-company-cut-off-black-farmers-one-by-one https://creativecommons.org/licenses/by-nc-nd/3.0/