Friends of Refugees

A U.S. Refugee Resettlement Program Watchdog Group

Hmong exploited in non-market contract-farming

Posted by Christopher Coen on July 2, 2011

An article at the The American Prospect explains the plight of former Hmong refugees who tried to make a go of it in poultry production in the Ozarks. Despite the farming skills and family values many Hmong brought from Laos — and hoped to use to achieve the American dream — American business markets set the Hmong up for failure. 

Shane Tawr doesn’t remember exactly why he first decided to try his hand at chicken farming. Tawr had a government job in Milwaukee but wanted relief from the city’s bustle. He decided in 2004 to head down to the Ozarks, buy a chicken farm, and work for himself, just as many of his Hmong ancestors had done in Laos.

The Hmong, who came to the United States in large numbers as political refugees after the Vietnam War, settled mostly in urban communities in California, Wisconsin, and Minnesota. Some raised chickens and tended small vegetable gardens, but many worked jobs that kept them near the poverty line. In the early 2000s, chicken producers such as Tyson, which is based in northwest Arkansas, began courting the Hmong, and advertisements about chicken-farming opportunities appeared in Hmong-language newspapers. Roughly 500 Hmong now live in communities throughout Arkansas, Missouri, and Oklahoma and raise breeder or broiler chickens for a handful of companies that operate in the Ozarks… Read more here

Apparently the highly exploitative contract-farming arrangements are not confined solely to Tysons, but practiced by other poultry processors such as Simmons, Peterson, George, etc. Other factors
involved in American businesses exploitation of the Hmong and other immigrants – a long tradition in American business – seem to include greedy realtors and inflated assessments of poultry farms, and “safe for the bank” loans guaranteed by the USDA’s Farm Service Agency (FSA). Read more here in a blog written by Daniel Krotz, a former Senior Consultant for the Washington DC based Institute for Social and Economic Development (ISED) explains these other factors on a blog at Carroll County News.

…the Hmong began arriving in the United States from Laos following the US exit from Vietnam. The Hmong, valiant allies with the US against communism, became refugees and were settled in the United States to avoid extinction at the hands of our North Vietnamese enemies as punishment for their service to the United States.

and

…Hmong operated farms were destined to fail from the onset or, to be fairly marginal business investments over any period of time, short or long term…

The underlying problem was that the Hmong had purchased farms that were overvalued and with equipment and buildings that were nearly or fully depreciated. The critical information missing from the Pott’s article was that appraisals of farms were too high at the time of purchase, and that area banks made loans even though it should have been fairly apparent to the banks that the Hmong purchasers were entering into fairly risky ventures that had limited potential to ever be
profitable.

Why would banks make loans for potentially high risk business ventures? Probably because, in most cases, the loans were guaranteed by USDA’s Farm Service Agency (FSA), which substantially reduced the risk for lenders…

In very general terms, what appears to have happened is that Realtors found a crowd of eager buyers fo farming operations the buyers were not adequately prepared to operate, and passed the buyers along to banks–accompanied by inflated appraisals–who made “safe for the bank” loans because they were guaranteed by USDA FSA. The only losers were the Hmong.

Again, while I cannot characterize how equitable the business relationships between Tyson and the Hmong farmers are, I can say that many of the farmers had similar if not identical contracts with other poultry processors such as Simmons, Peterson, George, etc. Financial outcomes for Hmong farmers was predictably poor regardless of the processing company they worked with… Read more here

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