Contract farming in the US highlights

January 9, 2014

From Democracy's Edge by FM Lappe (pg 196):
i. "Most of the holdouts have turned to contract farming: they sign up with nonfarm corporations to produce under exact specifications for a fixed amount. It's the only "choice" many feel they have."
ii. "Overall, contract farmers now supply 36 percent of the value of crops and livestock in the United States. But nearly all poultry and egg producers are under contracts in which companies such as Tyson own the flocks and supply the feed while the farmer provides the labor, chicken houses, water, and utilities." [Source: personal communication with Robert Taylor]
iii. ""Contract poultry producers often have to take on as much as a million dollars in debt to build facilities before they even begin," explained Auburn University professor Robert Taylor. Contracting farmers are in theory guaranteed a price for what they produce, but companies like Tyson have been known to stop honoring contracts without reimbursing farmers, even if there are months or years left on them." [Source: "Tyson Foods Fails to Honor the Term of the Contract for Certain Growers," E-Bulletin #20, Rural Advancement Foundation International-USA (RAFI-USA), February 2004 [], accessed on March 2, 2005.]
Source: Frances Moore Lappé, Democracy’s Edge: Choosing to Save Our Country by Bringing Democracy to Life (San Francisco: Jossey-Bass, 2006), 196.
From The Meat Racket, Chapter 5 (begins on pg 113) of The Meat Racket. Here are a few highlights:
i. "With gas and electrical bills to pay, a pay cut of $1,428 could make the entire flock of birds a loss. The farmer, in other words, often worked for free, seven days a week, for six weeks, to deliver as much as 161,000 pounds of meat to Tyson." (p. 117)
ii. "Moore was never sure what he would paid for his work. He worked his hardest… only to find that the price they fetched wouldn't cover the cost of raising them." (119)
iii. "Farmers aren't ranked against some sort of industry average cost, or even the average cost of growing chickens in their area. They are ranked against each other. That means that no matter how well they do, about half the farmers will end up taking money from the other half." (p. 121-122)
iv. "The tournament, then, lets Tyson predict exactly what it will pay for chickens while making the farmer's income wildly volatile. Who wins and who loses doesn't change anything for Tyson Foods. The farmers are left to fight that out on their own and determine who gets to stay in business." (p. 122)
Source: Christopher Leonard, The Meat Racket: The Secret Takeover of America’s Food Business (New York: Simon and Schuster, 2014), 113-146.
Also, Olivier De Schutter (UN Special Rapporteur on the Right to Food 2014) released a report about the effects of contract farming on October 24, 2011. See here for overview:
i. "Entering into a contract is a private choice, but how much choice do farmers really have if their only access to markets is via a single dominant buyer? And how much benefit can this arrangement bring the farmer if the buyer can dictate the terms of that contract? If they are not careful, farmers end up as disempowered labourers on their own land,"
ii. "For too long farmers have been forced to eke out a living from subsistence agriculture or, once they've fallen in debt, to cede their land and labour to work in exploitative conditions on plantations. Our failure to help small-scale farmers to access markets – and to live decently from farming – is a key cause of hunger,"
iii. "If farmers can access technical know-how, inputs, distribution circuits and markets only via investors, then they become trapped in an unhealthy cycle,"


Source: United Nations Food and Agriculture Organization, Olivier De Schutter, “Towards more equitable value chains: alternative business models in support of the right to food,” Report presented at the 66th Session of the UN General Assembly, October 24, 2011, Accessed on May 1, 2014,

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