Why The US Department Of Justice Is Reportedly Investigating The Poultry Industry
The poultry industry gets a good share of federal attention, but the light shining their way isn't always a favorable one. With a $46.1 billion production value in 2021, per the United States Department of Agriculture (USDA), poultry is big business by any standard. But, according to the Peter Parker principle, great power comes with great responsibility — which isn't lost on the U.S. Department of Justice (DOJ).
The DOJ's latest investigation into subpar poultry practices focuses on Pilgrim's Pride, the second-largest U.S. poultry processor by sales volume, though The Wall Street Journal states that other companies have reportedly received notice of inclusion in the probe as well. It follows at least two poultry-related investigations earlier in 2022, one involving chicken executives accused of price-fixing conspiracies and the other investigating poultry companies for allegedly sharing employment information to suppress worker wages and benefits.
This time, the DOJ has widened the scope of inquiry, potentially affecting countless small farmers supporting the giant poultry corporations in America.
The tournament system of payment
This time around, the DOJ investigation into the major poultry producers involves payments — but not to direct employee laborers who routine employee protections would cover under U.S. laws. The payees, in this case, are a network of small chicken farmers contracted to feed and raise the chickens vital to continuing operations, explains Food Dive.
The chickens belong to the poultry corporations, who control the birds' access, the feed, and how they are raised, thereby giving rise to complaints of unfair practices. The crux of this issue lies in the unconventional way those small farmers receive compensation. It's known in the industry as the "tournament system," notes The Wall Street Journal, so named for the sliding-scale way of paying chicken farmers by comparing them to two dozen of their competitors. The performance-based pay structure is decried for the lack of control farmers have over variables affecting their income, as well as the insecurity of their livelihoods.
The Justice Department seems to agree, based on this new civic investigation into the chicken farmer contracts and how they're paid. The Agriculture Department has also weighed in with rule proposals to increase transparency in the contractor payment process. According to Yahoo, Pilgrim's Pride indicates intentions to cooperate with the current DOJ probe.