Speech by Wes Sims, TFU President
National Catholic Life Rural Conference
--Discussion with Bishops--

July 27, 2001

The family farm has long been an integral part of America's self-image. However, America's "family farm system" of agriculture today stands on the threshold of eradication. The economic and social fabric of rural America is unraveling.

Two fundamental changes are taking place in agriculture: the concentration control by fewer and fewer processing firms and the gradual replacement of traditional open markets by contract production and vertical integration.

The compounded impact of these changes is growing inequality between the family farmer and monopolistic agribusiness corporations--an inequality that is depressing farm income and threatening the economic viability and environmental health of rural communities.

MARKET TRENDS

Traditionally, farmers produced and then sold animal or crops in an open market to the highest bidder among several local processing firms. But today's agricultural markets are highly concentrated with less than a handful of national and multi-national firms controlling the majority of the market for many commodities.

For example, the top four processing firms for beef, pork and chicken control from 55 to 87 percent of the U.S. market for their commodity.

POULTRY CONTRACT PRODUCTION

The farmer-processor relationship is further tilted in favor of the giant processing monopolies through the growing trend towards contract agriculture.

For example, in contracts for poultry growers, the farmer provides the labor, management and facilities required to raise the company-owned chicks of the appropriate processing weight.

Over the years, because of poultry industry consolidation and a lack of market power on the part of growers, the typical contract relationship between growers and poultry companies has been very abusive.

Growers are generally offered take-it-or-leave-it contracts with very unfavorable terms. The companies control all the production decisions, leaving the growers little if any autonomy in their farm operations. Growers are often forced to produce beyond the capacity of their land, and left by the companies to shoulder the environmental responsibility for the manure and dead bird disposal.

Because of growers' lack of market power, they have no leverage to negotiate better contracts, and often face significant retribution if they attempt to speak out against the abuses.

THE GROWTH OF CONTRACT AGRICULTURE

Contract production in the poultry industry is not unique to the agriculture sector.

By 1998, over a third of the total value of U.S. agricultural production was under contract agreement. This included almost 90 percent of the total value of poultry production and more than half of the total production for fruits and vegetables. Other commodities commonly produced under contract include soybeans, corn, cotton, beef and pork.

The increasing strength of the corporate hand is choking the family farming systems most cherished characteristics: diversity and individuality. An industrialized agriculture system has a stronghold on the producers and rural communities.

With the trend toward contract agriculture hastening, it is time for Congress to act to facilitate a more competitive and balanced marketplace for contract negotiations.

TREATMENT OF WORKERS

In addition to exploiting rural land owners, a system towards contract industrialized agriculture mistreats its workers. For example, in the poultry industry, factory workers face hazardous working conditions and mistreatment.

The following is an excerpt from "Harper's Magazine" describing some of the hazards facing poultry industry workers:

"A typical plant can in one eight-hour shift turn 144,000 chickens into packages of ready-to-eat meat, but the human cost even early in the process is high: repetitive-motion injuries abound, catchers are prey to cuts, eye infections and respiratory ailments."

The National Institute for occupational Safety and Health has documented painful muscular-skeletal disorders in poultry workers who are forced to make thousands of repetitive motions every day. Some workers are permanently disabled. The U.S. Labor Department says one of every six poultry workers suffers a work-related injury or illness every year.

Along with hazardous working conditions, the Labor Department has documented widespread violations of worker's rights in poultry production. These include routine violations of the Fair Labor Standards Act, failure to pay overtime for hours worked, and monies deducted from workers' paychecks for clothing and protective gear which the companies are supposed to provide.

Immigrants, largely Mexican or Guatemalan, make up a significant portion of factory workers. To the company's financial gain, immigrant and low-wage workers alike are easily exploitable due to the lack of readily available legal wage and labor information.

One of the most alarming concerns is that the poultry industry is not unique in the agriculture sector. Increasingly, the livestock industry and other commodities are becoming more and more vertically and horizontally integrated. In the cattle industry, about 20 feedlots feed about half of the cattle in the U.S. and these are either owned by the slaughtering firms or have contracts with processing firms. Dairy farmers are being consolidated, leaving only the cow/calf sector out of the integrated system.

An industrialized system of agriculture harms not only family farmers and factory workers, but has dire effects on rural communities. Family farms provide the infrastructure to rural communities contributing to the economic well-being of the community. Family farmers keep the main street businesses prosperous and schools filled with children. In the past when family businesses were the predominant system in rural communities, there was a multiplier of three or four. Newly generated dollars in the agricultural sector would circulate in the community, changing hands from one business family to another three or four times before leaving the rural community. This greatly enhanced the economic viability of the community.

Large corporations, whether hiring labor as factory workers or growers, see labor as just another input cost to be purchased as cheaply as possible. The profits do not go to the community, but the company's headquarters and then are sent to all corners of the world to be reinvested.

However, the industrialized system of agriculture and the loss of family farms and rural communities are not destined to occur. The current trend towards a monopolistic industrialized system is not the only system that could emerge.

I am hopeful that through a growing ethical and social consciousness and evolving dialogues on concentration in the food system--such as this one today--that we will be able to redirect the course and guide to a sustainable agriculture system that will mend the economic and social fabric of rural America.


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