Complaints pepper D.O.J., U.S.D.A. poultry event
May 24, 2010
by Bryan Salvage
NORMAL, ALA. — Chicken farmers in Alabama told federal officials on May 21 they do not have the power and have little ability to deal with large poultry companies in the industry, according to The Associated Press.
This discourse took place at Alabama A&M University, where representatives from the U.S. Department of Justice and the U.S. Department of Agriculture held a hearing on competition in the chicken industry.
Poultry companies are demanding more from chicken farmers but paying less, charged one attendee. But Richard Lobb, spokesman for the National Chicken Council, said the hearing was skewed with testimony from unhappy farmers and, in fact, many poultry farmers are satisfied with contracts that allow them to sell a steady supply of chickens.
"The processing plant has to have birds coming in. They've got to continue working with farmers in that area to secure a supply of birds. [Companies] are not going to cut off their nose to spite their face," he added.
Dozens of chicken farmers traveled to Alabama A&M University for the hearing on competition in the chicken industry. Although they raise birds for different companies, some farmers claimed they have little power to negotiate with the businesses that control an increasingly consolidated industry. In some regions, farmers only have one or two potential buyers which makes it hard to make demands.
The May 21 event was the second of five workshops that the Obama administration will hold this summer and fall to examine competition in agriculture, where seed, cattle, chicken and hog markets are dominated by a few large corporations.
Stepped-up antitrust enforcement in agricultural businesses is a top priority for the Obama administration, said U.S. Attorney General Eric Holder and Agriculture Secretary Tom Vilsack, who both attended the hearing. If that happens, farmers might earn more, but food prices might also increase.
The Justice Department hasn't been vigilant enough in pursuing antitrust cases against big poultry companies, Mr. Holder suggested during a news conference.
"There is a new attitude in the antitrust division," Mr. Holder said. "Everyone should understand. There is no hesitancy on the part of this antitrust division, in this administration, to take action where we think it is needed. This antitrust division is open for business again."
One former chicken farmer from North Carolina said government intervention is long overdue. Companies lure farmers into borrowing money to build chicken houses, then threaten to cancel their contracts if farmers complain about pay or refuse to invest more money to upgrade the buildings, she charged.
Friday's hearing was attended by farmers, lobbyists and agribusiness representatives who are paying close attention to the hearings, eager to see what new rules or federal lawsuits might result.
However, it's not clear stepped-up antitrust enforcement would do anything to change the broader food system, according to AP. Chicken companies have developed their contracting system over decades, and it has survived antitrust lawsuits and challenges in the past.
U.S.D.A. could use its regulatory power to complement the Justice Department's antitrust efforts, Mr. Vilsack said. The department is getting more money to hire lawyers and investigators and has formed a joint task force with the Justice Department to coordinate antitrust enforcement.
The poultry industry says, however, existing antitrust law is adequate and it opposes more regulation.
These workshops are the first-ever to be held by the Department of Justice and U.S.D.A. to discuss competition and regulatory issues in the agriculture industry. The goals of the workshops are to promote dialogue and foster learning, as well as to listen to and learn from people involved in agriculture. More information about the workshops can be found here