THE FINAL WORD
Classics from Alan's archive, while he gathers new material for future columns: Chicken serfs in the land of freedom, and honest talk from Swiss ag leaders.

By Alan Guebert, November 1, 2002

Editor's NOTE

Because of a busy schedule gathering information for coming columns, Alan Guebert pulled these two classics from his files for his latest installment of The Final Word. One reveals his surprise ag discoveries on a company-paid trip to Switzerland. The other details the powerlessness of contract poultry growers in 1999.

Alan's column will appear each Friday on The New Farm® web site.

Alan Guebert is a professional freelance agricultural journalist from Delavan, IL. He brings 22 years’ experience to his weekly investigations, reflections and analysis of events that shape the ability of farmers to farm profitably and independently. Click here for more information on Alan.

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1. 1999: America's land-owning serfs

Most farmers have heard it, read it and perhaps even said it during this winter of crushingly low commodity prices and continued corporate concentration: “If something doesn’t change, we’ll all be chicken farmers.”

The view is never offered as a compliment. West of the Alleghenies and north of the Ozarks, “chicken farmer” often means hired man, debt slave or tiny cog in a massive meat-making machine built by, run by and ruled by billionaires and billion-dollar companies.

Come to find out, chicken farmer means the same thing east of the Alleghenies and south of the Ozarks, too, according to a three-part expose’ on the poultry industry published in the Feb. 28 through March 2 editions of the Baltimore Sun.

The stories, the result of an eight-month investigation across 13 states, offer the blunt assessment that contract poultry growers are “land-owning serfs in an agricultural feudal system.”

Little wonder many livestock producers--and grain farmers, too--worry about becoming 21st century serf-chicken farmers. Each time a farmer suggests that likelihood, I ask if he knows how the industry operates and how prices poultry growers receive are calculated. Few do. So here’s how:

At the start, the integrator delivers day-old chicks to your barn. You must accept the integrator’s word that the number of chicks it claims to be delivering is accurate. You can’t count ‘em, weigh or question the baby birds’ breeding or health. If you do, you risk having your contract yanked.

As the flock matures, the integrator’s feed truck periodically pulls into your farm. You must accept the integrator’s word that the pounds and type of feed it claims to be delivering is accurate. You can’t weigh it, test it or question its quality. If you do, you risk having your contract yanked.

Should the birds get sick, you can contact the integrator. It may or may not treat the birds. You cannot treat the birds. They aren’t yours. If you do, you risk having your contract yanked.

And while the birds are breathing, the integrator retains title to them. The second one stops breathing, though, its title flops to you. Complain and you risk having your contract yanked.

When the birds are fully grown, the integrator collects them. You must take the integrator’s word that the number of chickens it claims to have collected is accurate. You can’t count ‘em or weigh ‘em. If you do, you risk having your contract yanked.

A short time later, you receive a settlement sheet for your work. It contains more data than the blueprints for the Space Shuttle and is equally incomprehensible. It shows deductions for things like medication, litter, and processing--even though you may not have received any litter or medication. If your competitor-neighbor did, however, you share his cost. Gripe and you risk having your contract yanked.

And processing? They were never your birds so why are you charged for processing them? Ask and you risk having your contract yanked.

The price you receive is an average of three weeks’ prices--usually the average of three consecutive Mondays when thin trading brings the week’s cheapest prices--on the New York market. Complain and you risk having your contract yanked.

Once the base price is determined, your flock’s feed efficiency, “liveability,” weight, and other factors are indexed to those of the integrator’s other grower flocks “settled” that week. All prices paid to growers then are pro-rated off the “best” flock. If your flock performed seventh best out of the 15 flocks settled that week, you receive the seventh-best price.

Complain about how the integrator calculated your price and you risk having your contract yanked.

Then the check finally arrives. If you’re very, very good--and you received healthy chicks, the right feed rations, good weather, and experienced little disease--you may have finished 52,750 of the 54,000 delivered chicks to an average weight of 5.25 lbs. apiece. That’s 276,950 lbs. of poultry.

The check for your work amounts to $10,500, or 19.9 cents per bird. It’s actually less than that because you’ve yet to pay on the loan for your building, the electricity used during growing, and other costs.

Nineteen point nine cents per bird.

Ironically that’s nearly the integrator’s exact cost of the chick it placed in your barn two months ago.

The ugly truth is you’ve raised a 20-cent yellow furball to a $4.50 per pound boneless chicken breast and the value of that chick--to you--never went up one a single red cent.

Keep that thought in mind when the integrators and their clucking shills tell you contract production is an opportunity for you to eliminate market risk.

And keep another phrase in mind, also: “Land-owning serfs in an agricultural feudal system.”

2. On the road in 1998: Finding truth on a Swiss junket

A writer friend often jokes that journalism awards have little value. According to him, since the human body cannot digest walnut plaques and brass statuary, awards cannot feed the family or pay the bills.

To a large degree, he’s right. Awards reflect glories past; they don’t put supper on the table or write next week’s column.

But one ag writing award is different. The American Agricultural Editors’ Assoc. “Writer of the Year” prize carries an all-expenses-paid, week-long trip to Switzerland courtesy of its sponsor, Novartis Crop Protection, Inc. (As well as a non-edible walnut plaque and bicuspid-breaking brass statue.) Since I somehow stumbled to victory in 1997’s AAEA writing race, I copped the trophies and the six-star Swiss junket.

Yet the threat of seven days in Europe’s most picturesque country with company officials dogging my steps and washing my brain held little attraction. A pal from Texas, Joe Dan Boyd, the only two-time winner of the award, encouraged me to check my cynicism with my luggage and take the trip. It was excellent advice because the holiday yielded new friends, new ideas and a new view of the tight box Swiss and European farmers now find themselves.

And best of all, no Novartis PR-types were seen or heard--not even during a day-long chatfest at the Swiss giant’s headquarters in Basel. Instead, company bigwigs treated their U.S. guests to several hours of refreshingly frank discussions on global agriculture, the role of biotech and European politics.

For example, Dr. Jost Harr, Novartis director of research and development strategies, openly worried that a recent countrywide referendum which endorsed the use of biotech crops in Switzerland by a 56% to 44% margin was too lopsided a victory to allay public fears of bio-based food.

“It would have been much better had the vote been closer, like 52-48,” Harr noted, “because now we have winners and losers. This will not promote the dialogue we need if biotechnology is to be adopted slowly, safely and confidently. Industry and universities are filled with people who still think what’s ‘do-able’ should be done. That’s not the way to do it, of course.”

Of course? What a peculiar--and truthful--opinion from a person and company whose futures are inexorably linked to genetic biotech.

Two farm visits were equally enlightening. At one, young Mathias Kleiber explained how he, his wife, father and mother made their livings on 54 acres (valued at $15,000 per acre) of fruit crops, wheat and cattle.

Because he participates in a new Swiss farm program which marries soil conservation to Integrated Pest Management, (the only country in the world to do so) Kleiber receives about $500 per acre government subsidy. If he chooses--and he has the choice--not to go IPM, his subsidy would drop to about $125/a. Likewise, if he moved from IPM to nearly organic, his government check would balloon to over $600/a. The Kleibers like this innovative program that ensures food quality and their farm’s future.

A second farmer, J. Salvisberg, who rents nearly 170 acres, large by Swiss standards, plays the IPM game, too, on his lengthy crop rotation of oats, barley, potatoes, canola, wheat and pasture. Yet he wants a US-style “freedom to farm” policy so he can buy land, expand the family’s 26-cow dairy herd, boost sow numbers from 20 to 60 and grow just wheat.

“The European Community,” of which Switzerland is not a member, “will push out our country’s farm programs sooner or later,” Salvisberg predicts. “We should do it sooner so farmers like me can be free to do the best of our farming abilities.”

Over a lingering dinner, Dr. Hans Popp, Switzerland’s recently retired deputy ag chief, explained the clash of farming cultures that’s building in both his country and continent.

For the first time in centuries, Popp notes, Europe has had 50 years of continuous peace, so food now is not a key security issue as it was for previous generations and governments.

Also, the 1995 GATT deal that freed global ag trade has clipped Swiss farm prices by about 30 percent. In turn, many Swiss farmers now want to remove restrictive rules on what and how much to produce to, hopefully, boost income.

Popp, who received his Ph.D. in economics at the University of Chicago under Nobel Prize-winning Theodore Schultz, believes Swiss farmers will be integrated--either de facto or by law--into the EU and the global ag economy within 10 years.

“But that will guarantee them nothing,” he opines, “other than many, many fewer farmers.” It will be the same for the rest of Europe, too, he adds.

“It’s called progress, yes?” Popp asks rhetorically. “Personally, I don’t think it is, yet it cannot be stopped in your country or mine. But we can manage it better so people have time to adjust.”

More truth. And that’s always a prize.


© 2002 ag comm

The Final Word comes to you each Friday by special arrangement. Alan Guebert's regular column, the Farm and Food File, is published weekly in more than 70 newspapers around the US and Canada. Contact him at AGuebert@worldnet.att.net.