Author Archives: Christopher Collins

USDA Rolls Back ‘Fair Practice’ Rule That Would’ve Protected Texas Chicken Farmers

They get lured in by the promise of an easy, steady paycheck. Just raise some chickens, keep them healthy, and the company — Tyson, Sanderson Farms or some other industrial poultry processor — will take care of the rest, farmers are told.

They sign an exclusive contract and take out a loan to build several 24,000-square-foot chicken houses on their land. At first, everything’s fine. But eventually the growers, as they’re known in the industry, run into trouble, said Mike Weaver, a Pilgrim’s Pride contract farmer in West Virginia.

Weaver, who is also the president of the Organization for Competitive Markets, an antitrust think tank in Nebraska, told the Observer that sometimes the companies demand expensive improvements be made to the chicken houses, such as new heating or feeding systems that growers can’t afford. Sometimes entire flocks of up to 100,000 birds inexplicably die, he said. Many growers see their pay slashed and their expenses skyrocket. It gets so bad that some contractors have to take a second or third job just to make loan payments on the chicken houses. Some declare bankruptcy; at least one committed suicide.

A rare federal lawsuit allowed to go forward in Oklahoma this year bears out allegations made by Weaver and other farmers.

Mike Weaver

“Your choices are to lose your farm or raise their chickens,” Weaver said. “The bank’s beating door your door and you’re gonna have to declare bankruptcy or something else drastic. Sometimes [farmers] think it’s hopeless.” He said farmers are frequently taken advantage of, but due to nondisclosure agreements in the contracts signed by growers, many outside of the industry are unaware of the abusive practices.

About 800 of these contract farmers work in Texas, the nation’s sixth largest poultry producer. The three major players in the industrial chicken game — Tyson, Sanderson Farms and Pilgrim’s Pride — all have operations in Texas, mostly in the eastern part of the state. All three companies have been accused of mistreating farmers by employing tactics that push contractors into a cycle of crippling debt and bankruptcy. Now, due to last month’s rollback of a U.S. Department of Agriculture (USDA) proposed rule meant to protect farmers, they’ve lost what little hope they had to sue companies who take advantage of them.

Experts say the USDA’s decision to kill the Farmer Fair Practice rule, an Obama-era protection for contract growers that was slated to take effect this month, could indicate that the president won’t stand up for the farmers who overwhelmingly voted him into office.  

Wes Sims, president of the Texas Farmers Union, a century-old rural advocacy group based in Sweetwater, told the Observer that he’s disappointed but not surprised by the rule’s withdrawal. And with Trump’s administration siding with agribusiness interests instead of farmers, “How do you stop them?” he said.

While the Texas Farm Bureau supported added protections for contract growers, the National Chicken Council and other meat processing industry groups have hailed the rule’s withdrawal.

Representatives for Tyson, Sanderson Farms and Pilgrim’s Pride did not immediately respond to a request for comment.

Farmers previously have said that meat processors pit them against one another in what’s called a “tournament system.” Those who raise the fattest chickens with the least feed are paid the most, while their competitors split the money that’s left. Farmers can do little to improve their position, since companies control which chicks and feed are sent to them. Enough poor showings in the “tournament” can put a grower out of business for good.

Contracts between farmers and meat processors usually stipulate that farmers must settle disputes through arbitration instead of in court. Theoretically, farmers can still file a lawsuit against the companies, but court rulings have held that for a suit to even go forward, plaintiffs must prove that unfair practices are occurring industry-wide. The Farmer Fair Practice rule, which was initially proposed in 2010 and delayed several times before being nixed on October 18, would have eased that requirement.

“There’s no other industry that has to meet that standard,” said National Farmers Union President Roger Johnson. “If you’ve been harmed, you should have the right to redress.”

In withdrawing the protection, USDA Secretary Sonny Perdue said the rule would have caused “unnecessary and unproductive litigation.” U.S. Representative Mike Conaway, a Midland Republican who chairs the House Agriculture Committee, echoed the sentiment. “I appreciate the Trump administration’s dedication to regulatory reform through the rollback of unnecessary and burdensome regulations like these,” Conaway said.

Though some farmers who have quit the industrial chicken raising business have raised the alarm about industry abuses, many active growers are loathe to speak with the press. If they do, they face retribution from processors, including being provided with sickly chicks and bad feed, or having their contract canceled, Sims said.

“The company controls all the inputs. They control everything,” he said. “If they speak up, stand up for themselves, they’re done.”

With the proposed rule withdrawn, a lawsuit being heard in the U.S. District Court of the Eastern District of Oklahoma may be contract farmers’ last hope. In Haff Poultry Inc. v. Tyson Foods Inc., farmers have accused processors of colluding to trade information in an attempt to limit farmers’ compensation. The lawsuit claims companies keep farmers “in a state of indebted servitude, living like modern-day sharecroppers on the ragged edge of bankruptcy.”

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Immigrant Workers in Texas Could Fill Farm Vacancies, but They’re Trapped in the Valley

For the last two years, Bernie Thiel has watched yellow squash rot in his farm fields outside of Lubbock. The crops weren’t diseased, and they weren’t ravaged by pests or pelted by hail, he said. There just wasn’t anyone to pick them. Though Thiel has consistently lowered the acreage he plants to squash — from 160 acres seven years ago to 60 acres now — his aging immigrant workforce just can’t keep up anymore. And there’s no one to replace them.

“It’s very, very frustrating because we can move this product. The demand is there,” Thiel told the Observer. “The labor is just not available.”

Along with squash, Thiel also grows other labor-intensive crops, such as zucchini, tomatoes and okra, which must be hand-picked. He has 35 employees working six or seven days a week. It’s hard, backbreaking work that most Americans aren’t willing to do. That’s why he, like many farmers, largely relies on immigrant labor to get the work done.  

But there’s a problem: Between 50 and 70 percent of immigrant farmworkers are in the country illegally. Texas is home to an estimated 1.6 million undocumented immigrants, and many of those who are available to work on farms live in the Rio Grande Valley, near the Texas-Mexico border. Though large populations of immigrants are clustered in Houston and other urban areas of the state, many already work in non-agricultural industries.

The Valley, however, has a surplus of undocumented labor — Hildalgo County alone has an undocumented population of approximately 100,000, according to the Migration Policy Institute. But to get to Thiel’s Panhandle farm, workers would have to travel on a major highways, past  immigration checkpoints and risk being deported. That’s a chance many of them aren’t willing to take.

Permanent border checkpoints in Texas  Yale Law Journal

Thiel said most of his current workers are beneficiaries of the Reagan-era Immigration Reform and Control Act, which granted amnesty to immigrants who entered the country before 1982. But the workers are getting old (some of them are in their 70s and 80s), and they don’t move as quickly as they used to. Thiel said he’s advertised for domestic workers but has had little luck. If he can’t find more labor soon, “I may just bow out and ride off into the sunset.”   

The pressure to find adequate labor is increasingly being felt across agricultural industries, Texas producers say. In July, Erath County dairy operator Sonja Koke testified to the U.S. House Agriculture Committee that she was struggling to hire year-round help for her 200-cow dairy. “Every day, we try to get people to come work for us,” she said. Proponents of the horse and beef cattle industries have also bemoaned worker shortages.  

Several factors, including relatively low pay and sometimes dangerous work conditions, contribute to farm labor shortages statewide. But especially outside of the Rio Grande Valley, they can also be tied to enhanced immigration enforcement by federal, state and local authorities. In June, the Associated Press reported deportation fears were driving labor shortages in several Texas industries, including agriculture, which has an annual economic impact of $100 billion here. Those fears are exacerbated by the “show me your papers” or “sanctuary cities” bill that was signed into law this year.

President Donald Trump has made it clear he does not welcome immigrants to the U.S. He’s promised to build a border wall, signed executive orders banning travel to the U.S. by people from certain countries, and most recently has held hostage hundreds of thousands of immigrants protected under Deferred Action for Childhood Arrivals in an effort to pass other hardline immigration proposals.

For undocumented workers who dare to travel outside the Valley for farmwork, the stakes are high. If caught by immigration authorities, they could be separated from their families and sent back to their home countries where they have fewer economic opportunities and may face violence, said Daniela Dwyer, managing attorney for Texas RioGrande Legal Aid’s farmworker program.

Jen Reel

“I have heard of workers deciding not to migrate out of the Valley to migratory jobs they used to take,” she said, giving the example of one “migratory stream” that once saw immigrants harvesting crops through Texas and into the Midwest. That stream, and others like it, are in jeopardy. “I have heard of some people, especially because they’re concerned about the checkpoints leading out of the Valley, deciding not to migrate.”

There’s at least one immigration checkpoint on three major highways leading out of the Valley: U.S. 281, U.S. 77 and U.S. 83.

The H-2A visa program, which allows employers to hire foreign nationals for temporary agricultural jobs, is designed to alleviate such labor shortages. But some of the growers interviewed by the Observer said the program’s requirements — that employers provide transportation to the jobsite and nearby housing — are too expensive, and the paperwork that comes with participating in the federal program is a hassle. Despite the fact that Texas has more agricultural production than almost any other state, it doesn’t even break the top 10 in certified H-2A workers.  

This month, U.S. Representative Robert Goodlatte, a Virginia Republican,proposed a bill that would create a new visa program, called the H-2C, that would allow workers to stay in the U.S. for longer but would not require employers to provide transportation and shelter. The bill has been met by opposition from both pro- and anti-immigrant groups. Immigration hawks fear that allowing laborers to work in the country for longer than a year might encourage them to overstay their welcome, while farmworker advocates say the bill would further erode workers’ rights.

Bloomberg reported that a markup on the bill was scheduled for October 4, but pressure from an anti-immigrant group has stalled the measure. Meanwhile, Democrats have introduced their own legislation that would revamp the visa system and offer undocumented farmworkers a path to citizenship.

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With Trump’s Infrastructure Plan, Rural Texas Could be Left in Disrepair

Cattle crossing in Wharton County.  Jen Reel

Arnie Amaro, the city administrator of La Villa, knows Hidalgo County’s sprawl will eventually reach his town. In the last decade, the border county’s population has exploded from 684,000 to 850,000, transforming scrub brush into South Texas suburbia. But for the moment, La Villa, located on Hidalgo County’s eastern edge about 20 miles north of the U.S.-Mexico border, is a small town with the tax base to match.    

“We need to get our infrastructure beefed up and ready,” Amaro said. La Villa’s most pressing need, he said, is expanding the town’s overburdened wastewater treatment plant. But upgrading the facility to accommodate the coming population boom is an expensive undertaking. Generally, cities consider raising property taxes and water rates to fund such capital improvements, but those are difficult propositions for a community where the poverty rate is 36 percent, more than twice the state average.

But La Villa has help. The U.S. Department of Agriculture (USDA), through its Rural Development Office, awards grants and loans to rural communities for a wide range of projects, including economic development, home repairs and infrastructure. Recently, Amaro secured a $4 million deal with the agency to expand the town’s wastewater treatment plant. (About $1.6 million of that amount comes in the form of a grant; the remaining $2.4 million is a low-interest loan).

“Now, $4 million may not seem like much to a large community, but to us, it’s huge,” Amaro told the Observer. “We’re going to take this project on without increasing any taxes or water rates.”

In fiscal year 2016, the USDA awarded 85 grants totaling $29.1 million to rural Texas communities for water and wastewater projects. It also approved about $68 million in loans for those projects last year, agency statistics show. So far this year, the Rural Development Office has awarded grants and loans totaling $42,000 to the water provider serving Study Butte and Terlingua to buy new equipment and a $3.6 million loan to Monahans’ water supply corporation to upgrade wastewater treatment equipment.  

Under Trump’s proposed federal budget for 2018, La Villa and those West Texas water providers may be among the program’s final beneficiaries. In 2017, the USDA took on an estimated $492 million in obligations through the initiative, but Trump’s budget proposes taking on no new program obligations in 2018.

“I hear some of the stuff that’s going on up in D.C., and I know all that stuff trickles down to us eventually,” Amaro said. “When you restrict these small communities’ funding, that hamstrings us even more …  We need assistance down here. We really do.”

Without federal funding, the equipment at small water facilities eventually will fall into disrepair, a problem exacerbated by the plant continually being run at full capacity. “This existing plant is going to start nickel and diming us, but with wastewater, you’re not talking about nickels and dimes. You’re talking thousands and thousands of dollars,” Amaro said, noting that the city recently replaced two clarifiers (machines that remove particulates from water) to the tune of $30,000.     

The president’s budget proposal also suggested massive cuts to other rural development initiatives, such as those involving power lines, internet connectivity and subsidies for rural housing repairs. All told, rural America stands to lose billions in assistance funding if the proposal becomes law.

A Texas pothole  Daniel Lobo/flickr

Trump’s plan also has yet to address Texas’ aging infrastructure, despite the fact that the state has more miles of roads as well as more bridges, ports and dams than most others. Some of it’s in bad shape, too, according to the American Society of Civil Engineers, which gave the state’s infrastructure a “C” rating overall in 2012.

This month, a coalition of organizations representing farmers, power providers, banks, schools and other interests sent a letter to the White House to urge support for rural infrastructure funding. “Your effort to make investment in our nation’s infrastructure a priority is critically important and we look forward to working with you to help reinvigorate rural America,” wrote the Rebuild Rural Coalition. At least five of the coalition’s members represent interests in rural Texas: Alliance for I-69 Texas, Texas Ag Industries Association, Texas Elective Cooperatives, Texas Grain and Feed Association and Texas Vegetation Management Association.

Loyd Neal, Nueces County judge and chairman of Alliance for I-69 Texas, said that securing funding  for improvements to rural roads can be difficult because few federal transportation dollars are set aside for such projects. Ultimately, communities outside major metropolitan areas must compete with big cities. “They’ve got more congressmen and more representatives and just more dad-gummed people. It’s a tough fight,” Neal said. “Our part in signing that letter was, ‘Texas is a big state and has a lot of rural areas. Don’t forget the rural areas.’”

The Alliance for I-69 project aims to improve existing highways, such as U.S. 77 and 59 in South Texas, so that they meet interstate standards. Neal said improving the roadways will relieve congestion caused by freight traffic on Interstate 35 and better connect small communities to the state’s major hubs. But that work will cost an estimated $18 billion over 25 years, and it’s unclear how Trump’s budget proposal bodes for the project. When I asked Neal, a Republican, whether he thinks the austere spending plan will hurt the I-69 endeavor, he was noncommittal. “I learned a long time ago that the Lord giveth and the Lord taketh away, and the Lord is usually someone in Washington, D.C. In Texas, we try to work with what we have.”

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