Elections Have Consequences

There are few industries that are more abusive and more anti-competitive than the poultry industry.

Chicken farmers are about one step up from chattel slavery, and now Biden officials at the Justice Department have initiated an investigation of the poultry processors treatment of farmers.

This is both good policy and good politics:

The Justice Department is investigating how poultry companies pay their chicken farmers, the latest move by the government to clamp down on an industry payment system that has been criticized by some farmers.

Pilgrim’s Pride Corp.  the second-largest U.S. poultry processor by sales volume, said in a regulatory filing on Thursday that it learned earlier this month that the Justice Department had opened a civil probe into chicken-grower contracts and payment practices. The Colorado-based company said it would cooperate with the Justice Department.

The Justice Department has similarly notified other poultry companies, people familiar with the matter said.

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Chicken farmers generally work under contracts in which poultry companies own the birds and feed, and instruct farmers how to grow the chicks. About two dozen farmers in a given region are typically compared against one another to determine their payment rates, using a sliding scale analyzing their chicken production, according to farmers and industry officials. It is an arrangement known in the industry as the tournament system.

Some chicken growers have complained that the many variables involved in chicken farming make it too difficult under the tournament system to gauge how much income they’ll be bringing in from flock to flock. Chicken companies have pushed back on the criticism, calling the system a performance-based structure that keeps prices down at supermarkets, incentivizes farmers to maximize efficiency and safeguards chickens’ health.

The method is used by many large U.S. chicken companies to pay growers and has drawn scrutiny from the Agriculture Department, which in May proposed new rules around the system that the agency said would increase transparency.

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The probe into poultry farmers’ pay comes as the Biden administration has pushed to curb the power of large agriculture companies, accusing them of using their size to raise costs for consumers while underpaying farmers.

Unlike his two two Democratic predecessors, it appears that Joe Biden is actually interested in making government work for people.

This is a good thing.