Friday, June 28, 2019

Mississippi farmers say chicken processors discriminated, drove them out of business; federal probe seems to lag

John Ingrum
(ProPublica photo by Annie Flanagan)
A large chicken processor used new regulatory freedoms granted by the Trump administration to fleece black farmers in Mississippi, Isaac Arnsdorf reports for ProPublica and The Clarion Ledger in Jackson.

Koch Foods, the nation's fifth-largest poultry processor, persuaded a black farmer named John Ingrum to raise chicks for a few weeks until they were ready to slaughter. A company representative promised they would deliver flocks and feed, and told Ingrum he could make a lot of money, Arnsdorf reports.

"What Ingrum didn’t know was that those financial projections overlooked many realities of modern farming in the U.S., where much of the country’s agricultural output is controlled by a handful of giant companies. The numbers didn’t reflect the debt he might have to incur to configure his chicken houses to the company’s specifications. Nor did they reflect the risk that the chicks could show up sick or dead, or that the company could simply stop delivering flocks," Arnsdorf reports. "And that growing concentration of corporate power in agriculture would only add to the long odds Ingrum, as a black farmer, faced in the United States, where just 1.3% of the country’s farmers are black."

Carlton Sanders
(Photo by Annie Flanagan)
Black farmers are especially vulnerable because their farms tend to be smaller and they tend to make lower sales numbers than average, partly because of historic laws that excluded them from owning land and accumulating wealth, and accusations that the U.S. Department of Agriculture discriminated against them by denying or slowing loans for land (the USDA settled that class-action lawsuit for more than $1 billion in the Obama administration), Arnsdorf reports.

"Along with these historical disadvantages, black farmers say they have also encountered bias in dealing with some of the corporate giants that control their livelihood. In complaints filed with the USDA between 2010 and 2015, Ingrum and another black farmer in Mississippi said Koch Foods discriminated against them and used its market control to drive them out of business," Arnsdorf reports.

After Ingrum signed a contract with Koch, company representatives kept requiring him to make expensive modifications, about which they sometimes changed their minds. Such updates are usually meant to improve safety or respond to customer preferences, but Ingrum said there wasn't much logic to their demands, which cost him more than $50,000 between 2002 and 2009. He also caught feed-truck drivers failing to fill his feed bins all the way; the company said it was a mistake, but Ingrum said he had heard of drivers demanding payoffs to provide more feed, Arnsdorf reports.

Koch began delivering Ingrum chicks less often, which meant he made less money and fell behind on his loan payments. He considered selling his farm, but a Koch employee scared off a prospective buyer by telling him the farm needed $100,000 in repairs. "The employee also swore at Ingrum’s real estate agent and spread a rumor that the bank had foreclosed, according to the affidavit. That wasn’t true, but it was becoming increasingly hard to avoid," Arnsdorf reports.

When Ingrum complained about the company's practices at an agricultural forum in 2010 attended by Attorney General Eric Holder and Agriculture Secretary Tom Vilsack, Koch Foods abruptly canceled his contract. Ingrum lost his farm and couldn't get back on his feet for another five years.

After Ingrum went out of business, only three other African American chicken farmers were working for Koch. Two left the business about the time Ingrum did, leaving Carlton Sanders as the last. Sanders was a successful longtime chicken farmer, but when Koch bought out the company he had been contracting with, changes began immediately, he says: Koch mandated upgrades that cost him nearly $200,000, then demanded changes that would have cost another $318,000 and stopped delivering chickens to his farm; Sanders asked around and realized none of the white farmers had been told to make those changes. In 2015 he filed a complaint with the USDA. Meanwhile, his bank foreclosed and he filed for bankruptcy.

A USDA investigator found "evidence of unjust discrimination" and concluded that Koch Foods violated the Packers and Stockyards Act of 1921. However, the Trump administration has cut back on enforcement of this law, and Koch hasn't been penalized for discriminating against Ingrum or Sanders. "A USDA spokesman said the investigation is 'ongoing' and the agency is coordinating with the Department of Justice," Arnsdorf reports.

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