What Companies Don't Tell You
The Real Risks of Contract Farming
Before signing a contract, read through to see the hidden costs of factory farming.Why Contract Growing is a Bad Decision
You'll be treated as an employee without the benefits. The company dictates how you operate, leaving you with little to no say over your farm.Huge, Risky Investment
Contract growing requires you to invest hundreds of thousands of dollars to build barns and other infrastructure that can’t easily be used for anything else. If you lose your contract, you’re saddled with massive debt without a clear way to repay it.
The Financial Reality
The integrator will own the animals, whose value grows, while you’ll be responsible for everything that decreases in value. If you can’t afford to make repairs when required, you lose out.
Betting the Farm
Many farmers finance the operation using generational farmland and family homes as collateral. If the company terminates your contract, you could lose your home and your farm.
Only One Game in Town
In many cases, there’s only one integrator in a geographic area for growers to contract with. This leaves you vulnerable to company whims, because if the contract is terminated, you can’t contract with a different company, making it difficult—if not impossible—to repay your loan.
Imbalance of Power
Contracts are written by the company to protect the company. They can be changed and even terminated by the company with little notice or recourse. They’re not a product of good faith bargaining; they’re presented simply as “take it or leave it” agreements, or, as one former contract grower says, “It’s either their way, the highway, or no way.”
Rigged System
Poultry companies typically use the “tournament system,” which gives top-performing growers bonuses, which the company funds by reducing the pay of the lowest-performing growers. However, because the company controls all aspects of the grow-out process (e.g., the number of chicks, the breed of bird, the health of the flocks, feed rations, the number of flocks per year, etc.), much of your success as a grower is out of your control. In addition to pitting farmers against one another, this system causes growers’ income to be inconsistent from flock-to-flock and year-to-year.
Employee Misclassification
Companies will classify you as an “independent contractor” rather than an employee to limit their liability and avoid paying payroll taxes and offering you benefits like health insurance or retirement plans. This is slowly changing, as companies exercise so much control over farmers that courts are now hearing cases arguing that contract growers should actually be classified as employees—and therefore deserve all associated rights and benefits.