RAFI-USA
Agriculture
Production Contracts and Corporate Concentration Watch
Bulletin #3 January 2002
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Chapter 12 Bankruptcy
Competition Title of the
Farm Bill
Tyson Foods, Inc. –
Action on new state Producer Protection Acts
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As long as this nation
has any family farmers left, we will need the protections and options afforded
them by Chapter 12 Bankruptcy. Yet
Chapter 12 has "sunset" again and needs to be reinstated now. Better yet, it should be made a
permanent chapter of the Bankruptcy Code.
Many poultry farmers who
were "cut off" because they could not afford to "upgrade"
their poultry houses are faced with huge debts, no birds in their perfectly
good poultry houses and not enough income to meet minimum living expenses. They are facing bankruptcy this year
with no bankruptcy chapter that really meets their needs. Farm Advocate Benny
Bunting says, "Our hotline handles cases of these and many other farmers
who are making their situation worse by waiting for Chapter 12 to be
reinstated."
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Debate on Senate Farm
Bill is anticipated to start up again the first full week of February. Farmers
will be working not only to protect the positive measures that have been
included, but looking for new opportunities to include their issues.
One of the significant
differences between this Farm Bill and previous Farm Bills has been the fact
that contracting and concentration issues are actually in the debate and the
legislation.
In September, the US
Senate Agriculture Committee took up the Farm Bill. The initial Farm Bill
legislation introduced in the Senate Agriculture Committee by co-chair Senator
Harkin included a Competition Title designed to protect market access and
competition. Among the measures included were amendments to the Packers and
Stockyards Act to increase USDA authority to enforce fair trade practices
related to contracts, the establishment of minimum standards for fair contracts
and obligations for good faith bargaining between processors or handlers and
contract producers.
While the Competition
Title did not pass out of the Senate Agriculture Committee, several individual
pieces have been successful amendments on the Senate Floor. These included the
Feingold-Grassley-Harkin amendment prohibiting binding arbitration clauses in
agricultural contracts. This
amendment establishes that contract farmers always have the right, once a
dispute arises, to choose to take the dispute to court or to arbitration.
Another important
amendment that passed was the Wellstone-Grassley-Johnson Amendment banning
packer ownership. This amendment will prohibit packers from owning livestock
more than 14 days prior to slaughter. It is designed to decrease the ability of
large packers to manipulate the price of cattle and hogs. It exempts the
commercial poultry industry, farm cooperatives and small packers.
Two coalitions in
particular are working in Washington to protect open markets and empower
farmers. The Campaign for Contract Agriculture Reform (CCAR) is a national
alliance of organizations working to provide a voice for farmers and ranchers
involved in contract agriculture. CCAR supports good faith bargaining between
farmer associations and commercial processors and increased enforcement of the
Packers and Stockyards Act to protect contract farmers from unfair trade
practices. For more information on CCAR see: http://www.rafiusa.org/actionalert/contractag/intro.html
CCAR also participates in
a larger coalition of organizations brought together with the help of the
National Campaign for Sustainable Agriculture. In May 2001 this larger group of
organizations delivered a letter to congress with 62 organizations signed on
that called for a Competition Title in the Farm Bill. To date 72 organizations
have signed on. To see the text of the letter, go to <http://www.sustainableagriculture.net/compsign.htm>http://www.sustainableagriculture.net/compsign.htm)
The struggle is about to
continue. Stay tuned.
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* At Tyson Foods, Inc.,
the world's largest poultry company, two executives and four former managers
have been indicted on 36 counts of conspiracy to smuggle illegal immigrants to
work at company processing plants in order to increase profits. The indictment,
unsealed in federal court in Tennessee on Dec. 19th, is the largest case
alleging corporate smuggling of illegal alien workers in U.S. history,
according to the Immigration and Naturalization Service (INS). Company officials deny the charges
saying that they have fired the staff involved and have cooperated with the INS
after discovering the 2 1/2 year "sting"
operation.
In the indictment, the
INS says that Tyson Foods executives "cultivated a corporate culture in which hiring of illegal alien
workers was condoned to meet production goals and to cut costs to maximize
profits ."
* A Tyson Foods
shareholder is suing the Directors of Tyson Foods for mismanagement causing the
company to be charged with smuggling illegal immigrants. Crandon Capital Partners accuses Don Tyson,
senior chairman; John Tyson, chairman and CEO; and all other board members of
failing to stop illegal acts that may damage the company.
*Tyson Foods and
subsidiary Cobb-Vantress are 2 out of 6 poultry companies being sued by the
city of Tulsa, Oklahoma for polluting Lake Eucha- Tulsa's water supply. While admitting that there are also
other causes, Tulsa Mayor, Susan Savage says the many scientific studies of the area show that the
overwhelming cause of the pollution is the overloading of nutrients (esp.
phosphorus) in the lake watershed which comes largely from chicken farms that
put out the poultry manure for fertilizer. The lawsuit seeks monetary damages
for costs to treat the taste and odor of the lake water and includes an
injunction to prevent further pollution.
[ The lawsuit does not target the
contract growers in the watershed since the Oklahoma Attorney General expressed
his opinion that the poultry companies could be liable for pollution produced
by their contract growers.]
*Tyson Foods is being
sued by property owners around the Missouri/Oklahoma border for discharging
millions of gallons of wastewater from its processing plant near Noel, MO
directly into the Elk River which flows into Grand Lake, Oklahoma. The suit also charges that the poultry
company is responsible for the waste from the company's contract farms that is
suspected of leaching into the lake.
Ten national law firms, including that of Robert Kennedy, Jr., will be
assisting the plaintiffs with the case.
*Tyson Foods and hog
farmer sued. Court says Growers
are "Agents" of the Contractor, not independent contractors. The
Mid-January 2002 issue of Progressive Farmer reported on a recent case in
Alabama where a hog farmer contracting with Tyson Foods Inc. had been sued by neighbors
over alleged odors and waste coming from the farm.
A district court found
that the farmer was an "agent" of Tyson Foods and therefore both the
farmer and the company (Tyson) were liable for damages to the plaintiff.
Tyson appealed the jury
verdict, but the Alabama Supreme Court agreed with the lower court and found
that the production contract controlled the farmer's actions to the extent that
he could not be considered an "independent contractor."
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=al&vol=1990131&invol=2 or
Tyson
Foods Inc. v. Stevens, 783S. 2d 804 (Ala.2000)
Huge Bonus for John Tyson
In spite of all of these
"troubles" and others we have chosen to leave out of this report due
to lack of space, Tyson Foods awarded John Tyson, CEO, a $2.1 million bonus on
top of his $650,000 annual salary!
Tyson Foods also reported a substantial increase in profits for the
first quarter of the present fiscal year.
That's what it is all about. How long will it last?
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A Special Committee on
Agriculture recommends that a contract protection bill be drafted
The Legislative
Coordinating Council assigned the Special Committee on Agriculture the task of
studying agriculture marketing and concentration issues in 2001. The Special Committee held four
hearings across the state to focus on certain ag topics.
Attorney Clay Fulcher,
Arkansas: Mary Clouse, RAFI-USA, North Carolina; and Kansas turkey growers were
among those who related their experiences with production contracts at the
first hearing. At later
hearings, contract protections
were supported by Kansas Farmers Union, Kansas Farm Bureau, Kansas Cattleman's
Association, and the Kansas National Farmers Organization.
As a result of the
hearings, the Special Committee recommended (among other things) that a
contract protection bill be drafted.
House Bill 2659 is the result of the process. Among the bill's provisions, it is stated that no provision
of a production contract shall:
* deny the producer the
ability to address a dispute in the Kansas courts
* require the producer to
accept sick, defective or substandard contract inputs
* shall discourage or
prohibit contract producers from associating with
other
contract producers to address concerns or problems or to
collectively
negotiate production contract terms.
Georgia
House Bill 308,
Agricultural Production Contracts, is a bill to amend Title 2 of the Official
Code of Georgia Annotated to provide for the regulation of certain agricultural
production contracts and for other purposes. The bill was introduced in January of 2001 with six
sponsors. A hearing was held in
Atlanta and others are planned.
The United Poultry Growers, headquartered in Montezuma, and the Georgia
Poultry Justice Alliance with an office in Atlanta are coordinating the efforts
to pass the bill this year.
HB 308 and the lists of
sponsors can be found at http://www.legis.state.ga.us/Legis/2001_02/sum/hb308.htm
If you are travelling to
Atlanta by car, you might see the billboard below. It is located at the intersection of I-985 and Friendship
Rd. on the way into Atlanta and near Gainesville.
To help win support for
HR308, the Sierra Club donated the funds for the billboard for the next 3
months. "Crooked
Chicken" is a website maintained by poultry growers trying to use new ways
to get their message out to the general public.
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