Contract Grower Resource Guide
Big meat corporations routinely exploit contract growers. Learn why the industry’s unfair contracts are a bad deal, and what you can do if you’re stuck in one.
Thinking About Becoming a Grower?
Why Contract Growing Is a Bad Decision
Huge, Risky Investment
Contract growing requires the farmer to invest hundreds of thousands of dollars to build barns and other infrastructure that can’t easily be used for anything else. If a grower loses their contract, they’re saddled with massive debt without a clear way to repay it.
Betting the Farm
Farmers often finance their operation using generational farmland and family homes as collateral. If the company terminates the contract, the grower is at risk of losing their home and their farm.
Only One Game in Town
In many cases, there’s only one company (also known as an integrator) in a geographic area for growers to contract with. This leaves the farmer vulnerable to company whims, because if the contract is terminated, the grower can’t contract with a different company, making it difficult—if not impossible—to repay their loan. (This market condition is called a monopsony.)
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. (The legal term for this is “contracts of adhesion.”)
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 a grower’s success is out of their 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.
Companies classify contract growers as “independent contractors” rather than employees in order to limit their liability and avoid paying payroll taxes and offering benefits like health insurance or retirement plans. However, 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.
Contract Grower Profiles: Firsthand Accounts of a Broken System
These farmers have all been contract growers for big meat corporations. Learn why they wouldn’t make the same mistake again.
Craig WattsNorth Carolina
Having been raised on a small tobacco farm in southeastern North Carolina, I appreciated the tranquility of being in nature and the sense of freedom that comes with living on the land. However, it wasn’t until I moved away and experienced life from the inside of an airport that I started longing for a return to life on the farm. Read more.
Michael DiazSouth Carolina
My wife and I have always dreamed of owning a family farm. Having grown up around farming, I developed a special relationship with the land. My uncle owned a small family farm where he grew produce and raised cows, chickens, and goats. Read more.
In 1987, my husband and I signed a contract with Tyson Foods to raise factory farm chickens in Johnson County, Arkansas. We took out a loan from the bank for $175,000 and wagered our family land to get into the chicken business. Read more.
I became an advocate against food chain consolidation after Sanderson Farms, with no notification to growers, sold their company to the two largest privately held corporations in America for $4.53 billion. Less than a week after the public announcement, they were on our farms trying to reduce our pay by giving the grower a pay cut. Read More
I stood up for myself and other growers by refusing to sign that pay-cut contract and speaking out to our leaders in Washington that it is time to end the abusive practices against growers by these monolithic corporations.
After two years of fighting for poultry contact reform and transparency in the industry and against these monolithic corporations and even our government; I have learned that as family farmers and American citizens, we need to take control of our food chain supply. We need to work together to make sure that the future of locally sourced and sustainable food is available to all Americans. Next to people, food is the most important resource this country has and farmers are the backbone of America. Without the American family farmer, this country will collapse.
As a female farmer I’m asking you to get involved and support those men and women who work 24 hours a day every day of every year, year after year. I’m asking you to support farmers who work come hell or high water, rain or shine, drought, heat wave, or hurricane. Work with us and for us so that we, the American Family Farmer, can continue to make sure that your table is always overflowing with the most beautiful, healthy, affordable food that the family farmer can grow for you.
Get involved in the great American food fight. Your life and the life of your family might depend on it.
Paula BolesNorth Carolina
As a proud, hardworking, independent farmer with experience growing a variety of livestock and produce over the years, we were interested in a business that could provide a supplemental income through our retirement years. The integrator’s presentation made it seem like the perfect plan—but it couldn’t have been more perfectly wrong! Read More
It wasn’t so much what they did tell us, but all of the things they didn’t tell us, that pushed us down a path which nearly bankrupted us. Once we were able to crawl away from the atrocities of the CAFO system, we began the process of converting the chicken houses to greenhouses. It’s been a long, difficult road, but we are so thankful to have transitioned to a cleaner life on the farm and hope to increase the business and sustainability of the farm.
For a small independent farmer with only two poultry houses, we didn’t think canceling our contract would make any difference to the billion-dollar industry, but I believe if enough independent farmers like us are able to walk away from them, it will eventually have an impact on the industry. Farmers are hardworking folks and are stronger in numbers and hopefully as we band together, we can draw attention to the unjust treatment by CAFOs and to help pave the way for others to follow.
Reid PhiferNorth Carolina
My name is Reid Phifer, and I contracted with Cuddy Foods to grow heavy Tom turkeys in early 1986. Once I signed THEIR contract, I immediately saw differences in what they said my income would be versus my actual income. Read More
Julie SanchezDevelopment Coordinator
Julie is a Colorado native and SRAP's Development Coordinator. She has a background in international studies, graduating with a B.A. in International Studies from the University of Colorado at Denver. Julie has experience working in the legal field, serving as a Judicial Assistant for a district court judge. Read More
Current Contract Growers
If you are a contract grower struggling in the system, contact us. We might be able to help or refer you to experts for guidance on:
- Rights under the Packers and Stockyards Act
- Contract issues
- Loan Issues
- Legal referrals
- Transitioning your operation to other types of farming.
Here are some other useful resources
Can you help us by taking a quick survey?
We created these surveys to help us understand the experiences of current, former, and potential future contract farmers in order to better serve their needs. The surveys are completely anonymous, and no personal information will be collected.