"The integrator does own you," Kemp said. Another Mississippi grower, Nguyen Poultry Farms, received $10.6 million in loans, according to SBA data. Kemp, his brother and father, each of whom owned separate businesses but farmed alongside one another, received $1.3 million in SBA loans since 2010. The SBA defines small poultry farmers as operations making less than $750,000 a year.
Under the program, known as the 7(a) program, the SBA guarantees to pay the lender as much as 85 percent if the loan fails. Since 2010, poultry growers have taken out more than 3,000 loans backed by the SBA, totaling $2.9 billion, according to an analysis of SBA loan data by the Midwest Center for Investigative Reporting. The SBA was accepting public comment until Dec. Under the proposed rule, if a small business brought in more than 85 percent of its revenue from one business over the past three years, the SBA would consider the two to be affiliated and therefore, the small business may not be eligible for a SBA-backed loan. Since the report was issued, the SBA has restricted the amount of land a farmer can buy and the length of loans.Īdditionally, in September, the SBA proposed revisions to its loan program that would change the definition of an affiliation. It said the rules big poultry companies placed on chicken farmers means they are not independent small businesses, calling into question their eligibility for Small Business Loans. In March, the inspector general released a report looking into the relationship between poultry integrators and growers.
It is those restrictions that caught the attention of the Office of the Inspector General of the Small Business Administration, an office that provides oversight to improve the integrity, accountability and performance of the SBA. Kemp has experienced the immense control poultry companies put on growers - how they care for the birds, the way payments are determined, even dictating when growers replace equipment. By "integrator," Kemp means the big poultry companies, which deliver chickens to farmers as chicks, and pick them up six to eight weeks later as full-grown birds, ready to be slaughtered and sent to restaurants and grocery stores.