"If I had known 14 years ago what I know today, there's no way I would have bought a poultry farm."
These are the words of Mike Weaver, a contract chicken farmer in West Virginia, whose story was recently highlighted by Rural Advancement Foundation International's Under Contract. (Learn more from the video to the right).
Contract Farming Can Prove to Be a Catch-22
Contract farming is a common agribusiness practice amongst multi-national meat processing companies and accounts for the majority of industrial poultry production. In a contract farming arrangement, farmers agree to produce a specific amount of output within a set time period. The main draw of contract farming is the promise of a guaranteed market. However, contract farmers often find themselves spending much more to keep their operations afloat than what they earn from their contractors. The responsibility to pay for all inputs (animals, feed, infrastructure, maintenance, etc.) incurs heavy financial risk, as the farmers absorb all costs of any losses that occur during production.
If I had known 14 years ago what I know today, there's no way I would have bought a poultry farm.
When it comes to acquiring more just compensation, farmers generally have no bargaining power. Production contracts also usually include provisions barring the farmers from discussing their unfair treatment, which can result in intimidation or retaliation.
Getting Justice for Farmers
Groups like the Rural Advancement Foundation International (RAFI) are working hard to build public attention and legislative action to help contract farmers. An important step is ensuring that the USDA finalizes rules for GIPSA, the agency responsible for creating regulations to prevent major agribusiness corporations from taking advantage of farmers. This has become all the more important considering the House Appropriations Bill for the fiscal year 2017 was passed with a GIPSA rider. Moving forward, we need to keep farmers like Mike in mind and remind the USDA of the critical role GIPSA plays in preventing abusive practices within production contracts.