Protecting Food. Empowering Whistleblowers.
Protecting Food. Empowering Whistleblowers.
Craig Watts is about as farmer as they come. He chews tobacco, he’s gruff, he wears overalls, and he loves Willie Nelson.
He’s not what you think of when you think of whistleblowers like Deep Throat or Edward Snowden. But six months ago he embarked on a journey to expose what he calls hidden injustices in the chicken industry.
Watts invited Fusion along to document his story. We followed Craig as he wrestled with becoming a whistleblower, showed us the conditions on farms, got nationwide attention for stepping forward—and then saw how the chicken industry reacted. Here is his story.
Watch Fusion’s 43 minute documentary in six chapters:
The farmer is an iconic American character: those earthy, wholesome, rosy-cheeked frontier men and women who worked the land were the cornerstone of our society. But the farmer’s reality today is far from the image portrayed in the famous painting American Gothic.
Craig Watts’ income from chickens fluctuates wildly: One year he will take home $67,000, another under $3,000. Many of our farmers live on the edge of poverty. In 2011, Pew Research reported that 71% of U.S. farmers who only grow chickens live at or below the poverty line.
One of the reasons for this is the way the industry is structured: Despite higher than ever meat production, there are fewer farmers and companies who control it.
In the 1950s, there were more than 1.5 million chicken farmers in America. Today there are about 30,000—and four companies control 54% of the chicken we eat.
That means fewer options for farmers, who mostly live in small towns in the rural South.
“The poultry production is organized in very small geographic areas,” said Robert Taylor, an agricultural policy professor at Auburn University. “If company A cuts a grower or shuts down the whole complex, there’s not another company nearby to pick up those farmers.”
Chicken farmers are usually contractors for big companies. Most of them don’t even own the chickens they raise.
The chicken industry, like much of the meat industry, is what’s called “vertically integrated.” That means the company controls or owns almost every step of the production process, and competition between entities is minimal.
Companies usually own the breed of bird, and the hatchery where chicks are born. Same with the chickens they deliver to the farmer, the mills that make the feed farmers use, the slaughterhouse – and often even the trucking lines that deliver the meat to market.
Usually, the only thing they don’t own is the farm where the chickens are grown — the riskiest, lowest-yielding stage of the production line. The farmer has little control over what chicks he’s given, and little say in how they are raised. Some compare contract chicken farmers to sharecroppers.
The contracted chicken farmer has no control over what chickens a company sends him to raise. Sometimes, it’s a bad batch of unhealthy birds. Watts will kill anywhere between 20 and 400 chickens every day, and he says he loses money on every single one he has to kill.
“It’s disheartening on two levels. One that having to do this to a live animal. And two, that I know it’s going to hurt me financially,” said Watts.
Watts says his job has become more about killing than growing. The industry’s acceptable method to euthanize a chicken is called “cervical dislocation.” Watts is a reluctant expert.
“I’m used to it, but it doesn’t get easier,” he said.
The industry expects there to be a three to five percent loss in most flocks before they go to the slaughterhouse. That means in a flock of 30,000, which he keeps for between six and eight weeks, Watts will kill up to 2,000 chickens. Nationally, if you do the math, that means about 450 million chickens die like this every year.
Watts’ contract with the Perdue Farms—the third largest poultry company in the country—stipulates Watts should euthanize any deformed, injured, or stunted chickens. Perdue Farms said it occasionally compensates farmers for bad chickens. In a statement to Fusion, it said Watts was reimbursed last Spring for a batch with an unusually high number of sick and deformed chickens. Watts says he still lost out.
The majority of chicken farmers are paid in a way that a lot of people think is peculiar and unfair.
The pay system is commonly referred to as the tournament. The tournament is a zero sum game, where nearly all the risk is transferred to the farmer.
It works like this: Farmers are divided into groups called complexes, kind of like sports leagues, and they compete against each other. The goal is to raise chickens to the right weight at the lowest cost. The company sets an average price per pound of chicken and according to their formula, they rank the farmers from best to worst each flock. But here’s the catch, it doesn’t really matter if all of them do reasonably well, they’re still ranked. So theoretically the top farmer can get 70% more pay than the guy on the bottom of the ranking sheet. What’s more, it’s not easy to predict where you’re going to fall on the ladder and so farmers find it difficult to do any financial planning.
“All the tournament system is, is a cost-controlling device for the companies,” said Dudley Butler, a former administrator at the Department of Agriculture. “Sure, they give a bonus to somebody over here, but then they give a discount to somebody over here.”
Tom Super from The National Chicken Council, an organization that represents the chicken industry, told Fusion that according to a 1997 survey by the University of Delaware, 75% of chicken farmers are satisfied with their contracts.
“Any time that you have a contractual situation between companies or private entities… there’s always going to be someone sometimes who’s unhappy with their contract or or their situation,” Super said. “But our — the research and the data tells us that that does not happen very often.”
That survey also found that 60% of farmers weren’t happy with their financial returns. And that 57.4% of them feared retaliation if they raised concerns about the companies they’re contracted by.
Perdue Farms said in a statement to Fusion: “Growers are urged to consult with legal counsel before signing a contracts,” adding that contracts include processes for resolving disputes.
Small farmers will often borrow $700,000 or more to build chicken houses, and they’ll subsequently invest more to keep up with new technology. After a couple of years in the business, many find themselves deep in debt and unable to make a profit.
The U.S. Department of Agriculture says the average large-scale farm is over one million dollars in debt. Chicken and livestock farmers make up the biggest percentage of this. According to the USDA Economic Research Service, contract growers’ total debt amounted to $5.2 billion, or 22 percent of their total assets, in 2011.
It’s that debt cycle, according to Watts, that prevents more farmers from speaking out about their conditions.
“Debt makes a man very pliable. I always said, there’s two ways to control a man—a debt and a sword. And at this point in time I think I’d opt for the sword. It’s quick and painless.” – Craig Watts
Dudley Butler goes one step further, accusing companies of consciously using farmers’ debt to control them.
“When you get in a situation where you’ve got 40 acres of land, and you owe a million dollars on chicken houses,” he said. “The only possible way that you can pay for that is have chickens and raise chickens, and the companies know that.”
“The growers do fear that if they speak out or if they complain to the [chicken company] about the chicks or the feed that they will be terminated, which means instant bankruptcy,” Taylor, the agricultural policy professor, told Fusion.
A lot of the farmers Fusion spoke to raised similar concerns.
“I experienced more than my share of retaliation from them [the company] when I went to Washington,” said Valery Rundle, a farmer from West Virginia. “First, they closed me down, right after my name came out in a press release,” she said.
Rundle had travelled to D.C. to give her testimony about her objections to the so-called tournament system. The alleged retaliation, farmers told us, isn’t a straight punch: it’s often subtle.
“It’s just stress. You can’t sleep. You’re worrying about what you’re gonna — your next check’s gonna come,” one farmer told us. He didn’t want us to publish his name, or even the company he’s contracted by.
“Every time that I’ve spoke out against the poultry companies and the wrongdoings, they retaliate by cutting my pay, cutting my chickens back, cutting the quality of my chickens.”
– Anonymous Farmer
This farmer told us that in the year after he spoke out about the chicken companies, his income went from $100,000 to $25,000 dollars the following year.
Watts, with the help of an animal-rights organization, illustrated what he sees as just how meaningless long-used terms like “humanely raised,” “organic,” and “cage free” really are.
Since then, Watts says he’s suffered ongoing reprisal from Perdue.
He’s been put on a “performance improvement plan,” which means he’s being constantly monitored. In the two months since Watts went public, he says he has received 26 visits from company representatives as well as two independent audits and visits from government inspectors. On one occasion inspectors noted three dirty light bulbs in one of Watt’s four growing sheds.
“Ridiculous” Watts called it. He filed a complaint with the U.S. Department of Labor in February accusing Perdue Farms of retaliation. Perdue denies any claims it’s retaliated against Watts.
“We are confident this complaint will be quickly resolved in Perdue’s favor and exposed for the publicity ploy that it is,” the company wrote in a statement to Fusion. It said the way farmers are compensated is fair and “heavily regulated” by the U.S. Department of Agriculture.
Watts is blowing the whistle on an industry that has long resisted change.
In 2010, President Obama seemed eager to make the system more fair for farmers.
He assigned Attorney General Eric Holder and Agriculture Secretary Tom Vilsack to work together to propose reforms to existing legislation on meat packers.
Dudley Butler, a cattle rancher and lawyer for farmers from rural Mississippi, was appointed to lead the efforts. The core of the reforms was to strengthen antitrust laws, pay farmers more fairly, and prevent retaliation and other unfair practices.
Farmers were excited by the prospect of change, but Butler says the pushback was almost immediate. His opponents in agribusiness fought vigorously to block the rules.
In 2010 alone, the five biggest meat companies spent nearly $9 million dollars on lobbying, according to the Senate’s lobbying records. Butler says companies went as far as requiring farmers and employees to sign pre-written statements opposing the rules.
“I even got a call personally from a poultry grower who signed one of those letters. He said he had to sign it but he was really in support of the rules,” Butler said. “It’s a dirty business.”
After a series of hearings, most of the reforms Butler and his team proposed failed. In 2012, the Department of Agriculture adopted a watered-down rule.
Butler said he received direct orders from the “higher ups” to stop working on the reforms.
Since then, no federal rules or laws have been implemented to reform the pay system or protect farmers who speak out. Congress passed a provision blocking any additional funding for potential reforms.
“By the corporation, for the corporation, of the corporation,” said Watts.
“A thin wallet and the truth’s not going to get you very far in D.C.”
– Craig Watts
The U.S. Department of Agriculture declined multiple requests to comment on regulation of the chicken industry.