Independent Contractor – to be or not to be?

My last post about Waterkeeper Alliance vs. Perdue and Allen and Kristin Hudson brought out many issues associated with the case. The saga continues………..

The lawsuit is about pollutants finding their way to drainage ditches surrounding a chicken CAFO owned by the Hudson’s into a tributary of the Pocomoke River and eventually the Chesapeake Bay. It also questions ownership and responsibility of the waste discharged from the farm naming Perdue as the legal owner of the chickens that produce the waste.

On November 17, 2011 both sides in the case filed a motion for summary judgment and in doing so many legal documents in the case were made available to the public. Public perusal of these court records brings to light many other issues.

It’s hard for me to decide which of the other issues to start with.

Independent contractor status is a good place to begin. Contract poultry growers (chicken farmers) are classified as independent contractors by the companies they contract with to raise company owned chickens. The job of the farmer is to receive company chickens and raise them to a marketable age – PERIOD.

Not to put the chicken before the egg we have to look at where these contract chickens originate. It’s a complex web to untangle and there are many company steps involved before ever getting to the chicks placed on farms and grown. What is known is that the company designs, through genetic selection and engineering, what the final chicken will be. When placed on contract farms, the farmer has no choice or idea about the genetics, performance in growing of the chicken, or how much manure that chicken will produce.

Prior to chicks being placed on contract farms feed is delivered to the farm. This feed is formulated, mixed and delivered by the company. Feed ingredients are unknown to the famer and are a closely guarded secret claimed by companies to be a “trade secret”. The amount of feed delivered to the farm is unverifiable by the farmer and (s)he has to accept on “good faith” that the feed is what the company says it is. There are no options for contract farmers to acquire feed from another source because the contracts stipulate that feed comes from the company. This feed delivery process continues throughout the entire life cycle of the flock.

I have to insert here a few facts about the feed. Most people don’t understand that feed ingredient’s such as antibiotics/antimicrobials and arsenic isn’t the farmer’s choice to use or not use. This pertains to animal by-products in feed as well. Everything that goes into feed is decided by the chicken company and must be accepted and used by the farmer. Should a farmer decide to acquire feed from another source the farmer’s contract will be terminated.

The chicks delivered to contract farms derive from company owned hatcheries where the eggs are hatched into chicks. During the process at the company hatchery certain procedures could be performed such as in ovo injections of vaccines and antibiotics. In ovo is a process of injecting eggs before hatching and it’s anyone’s guess as to what is injected. Another company secret of which the farmer has no control over!

It could be assumed that the independent contractor, the farmer, comes into play once the chicks are on the farm for growing. That theory might hold water if the company only delivered the chicks and disappeared out of the raising process and returned to pick up the grown chickens for processing.

Throughout the flock company employees routinely come to the farm and manage the methods in which the farmer is raising the chickens. Court documents in the lawsuit revealed a company employee went so far as to leaving written instructions saying “need to work on these things ASAP’ and then listing things to be done. Some “notes” left by Perdue gave deadlines on work to be done and many notes referred to telling the farmer to do “heavy culling” (kill many chickens). If that is not telling the farmer what work to do, I’m at a loss to say what it is!

Other notes revealed that a Perdue employee set or adjusted equipment within the chicken house, moved fans around, culled chickens, and preformed many other tasks required in raising the chickens to a marketable age. These things are the job of the independent contractor not a company employee.

Again, I have to stop here and raise a question. Suppose some disaster should occur inside the chicken house because of the Perdue employee making a mistake in equipment adjustments such as ventilation and all of the chickens die (smother) – who would be responsible for the disaster? It’s my guess the blame would be laid at the farmer’s feet and income loss would be the farmer’s bitter pill to swallow. Having been a contract farmer I say this with ease because everything is always the farmers fault according to the company and there is no recourse for the farmer.

Reading court documents revealed that Perdue routinely performed farm operations inside of the chicken houses. It’s argued that the Perdue employee and Mr. Hudson had an understanding about this. The only time that I’m aware of the company coming on the farm, performing the daily tasks of the farmer, and caring for the flock would be if the company declared that the farmer was not doing his job and that the company was taking over. There is a clause in the contract that says that the company has the right to do that. However there are no supporting documents that say that Perdue made any such declaration or decision to take over the raising of the chickens on the Hudson farm.

Farmers have argued for a very long time that they aren’t independent contractors in their relationship with chicken companies. Independent – somebody or something that is free from control, dependence, or interference. Looking over court documents it’s clear that Perdue has some other definition of “independent”.

I remember a time in the early 1990’s Perdue declared all of its chicken catchers to be independent contractors. In the late 1990’s a lawsuit was filed against the company claiming that the chicken catchers were employees of the company not independent contractors. The lawsuit prevailed and a Federal Court found in favor of the chicken catcher’s. If memory serves me correctly, the court found Perdue willful in dealings with the chicken catchers.

Might Perdue also be willful in dealings with contract farmers?

Relevant legal documents and court pleadings

GIPSA Rule – A Really Bad Joke

I recently had a contract chicken farmer, Craig Watts, ask me for advice after hearing the news that our illustrious politicians had delivered a crippling blow to farmers and consumers.

Specifically, the farmer was referring to the gutting of the USDA Grain Inspection Packers and Stockyards (GIPSA) Final Rule which would have dealt with many of the abuses contract farmers face. Known as the GIPSA Rule and something that I’ve opined about many times, House Republicans and Mealy Mouthed Democrats allowed language in a budget bill that defunded the GIPSA Rule which would have provided “commonsense protections that allow small livestock producers to compete and check the abusive practices of the poultry industry” says Wenonah Hauter, Executive Director of Food and Water Watch. House Republicans Drive More Nails Into Livestock Rule Coffin

I had no good advice to give Craig and I fear for his livelihood. He has been one of the most outspoken contract chicken farmers about the GIPSA Rule and took a public stand against the abusive practices towards farmers in the poultry industry. Although no laughing matter, my first thought was to tell Craig to cover his head and duck.

On a serious note I told him to prepare for contract termination because he will be retaliated against for speaking out. One way or another, Craig will be paid back and or illustrious politicians, who claim that they support the farmer, have assured that he has no protection. Over the past twenty years or more, I’ve seen this happen many times to farmers.

It further worries me that farmers were led down a path of destruction by our government. I’ve had my doubts from the very beginning of the latest attempt by farmers to reign in Big Ag from the monopolization of food production and the anti-competitive nature of contract farming.

USDA and the US Department of Justice (DOJ) held field hearings all over the country and encouraged farmers to speak out. Farmers believed in this process especially since they had the DOJ covering their backs……. many spoke. Even still, with the mighty DOJ at their backs, some farmers gave private testimony. A statement in itself about the fear farmer’s harbor!

When USDA finally proposed the GIPSA Rule and opened a public comment period over 60,000 comments were received by the agency and the majority was in favor of the rule. At this juncture of the game some farmers were still fearful and submitted unsigned comments so that they could not be identified by Big Ag.

Farmers have written letters and spoken in person to USDA and their illustrious politicians who supposedly represent them and have put their selves in a precarious position. Anyone who really knows me also knows that I hold no faith in our elected officials whether they are Republican, Democrat, Tea Partier, or Independent.

My cynical view overwhelms me when I travel to our Nation’s Capital because I get the feeling that our illustrious politicians are doing nothing more than paying “lip service” to their constituents. They tell you what you want to hear and send you on your way. They then turn around and “toe the line” from wherever the most power, money, and influence come from. It’s cronyism at its best!

Personally, I have no faith in our government to do what is right for the majority. I don’t think that I’m alone in my cynicism about our elected officials. On occasion I think there are some people who run for public office with good intentions toward doing the right thing. When they reach the destination of being elected to office they quickly learn that their ideals have no place in the political machine that runs our country.

In this particular situation, the GIPSA Rule, is a really bad joke that has been played on farmers and Big Ag is laughing all the way to the bank! I hope our illustrious politicians and government agencies feel good about selling out the American farmer and leaving them to suffer the tyranny of Big Ag.

Congresswoman Kaptur Stands up for Farmers!

Over the last few months I’ve witnessed a 3 ring circus going on in the US House of Representatives and if ever there were a time that faith in our government was at an all time low, it is at this moment in time.

Despite the expressed majority in favor of the USDA Grain Inspection Packers & Stockyards Administration (GIPSA) Proposed Rule change relating to fairness in the livestock and poultry industry, the House Agriculture Appropriations subcommittee mark up of their appropriations bill yesterday included a provision to stop USDA from implementing a Final Rule.

The National Sustainable Agriculture Coalition reports  that Representative Kaptur (OH) spoke out against the provision saying the bill would prevent USDA from implementing the rule even though the 2008 Farm Bill explicitly directs USDA to do so.  Kaptur has been a long time proponent for family farms.

I’ve written several posts relating to the Proposed Rule and the issue has become larger than life. Many contract poultry growers have come out of hiding from the fear of losing their contract for speaking out about the many problems within the poultry industry. It’s a big no, no as was revealed in Food INC.

Through contracts to raise livestock and poultry, corporations cohabiting in farmer’s neck of the woods have absolute control over the farms and farmers they contract with. The USDA GIPSA Proposed Rule would go a long way in ensuring fairness and level the playing field for farmers in their contract relations with corporate agribusinesses. Self described by farmers as being “serfs on their own land” has no place in today’s world.

One of the major players lobbying in opposition to a Final Rule implementation, the National Chicken Council (NCC), representing industrial chicken companies says that the proposed competitive market rule by USDA GIPSA “will fundamentally change how chicken companies operate especially with contract growers”.

Intimation from industry has been that companies would no longer contract with farmers they would own the farms that produce chickens for them. For those of us who are familiar with poultry industry maneuvering, subtle and indirect hints of putting farmers out of business is nothing new. Intimidation/coercion is what we call it! I wouldn’t be surprised to hear about subtle hints that the chicken industry will move operations to a foreign country being used while lobbying congress!

The one thing that both sides of the issue agree on is that the Proposed Rule will bring fundamental change. From the farmer standpoint the change would be a positive step forward however industry is adamant that this change will not happen.

What comes to mind is the question that if everything is wonderful and we don’t need change, why is this issue being vigorously debated? Why did farmers decide “contract termination be damned” and come out of hiding to support the Proposed Rule Change?

One thing certain about the issue is that corporate agribusiness has shown its hand and can no longer say that they support their partners the farm families they contract with. Farmers want and need the fundamental change that the Proposed Rule would bring and their partners in the chicken industry are fighting against them.