Craig Watts, who once made a career of raising hundreds of thousands of chickens in North Carolina, knows the torment and the crushing financial stress that can come with the job.

In the 1990s, he needed $400,000 in loans to build four chicken houses on his Robeson County farm. A decade later, Watts spent $100,000 to upgrade the houses, upgrades required by the company he was growing chickens for.

Meanwhile, Watts’ income fluctuated — $60,000 one year, $3,000 another.

“I put my psychiatrist in therapy telling him stories,” Watts said. “It was awful. When you talk about levels of stress, financial stress is up there.”

Large poultry companies, such as Perdue Farms, pay growers based on a “tournament system.” Farmers who fatten their chickens most efficiently are paid the best. Those who struggle to fatten their birds have their pay docked.

But a federal rule finalized this month will provide some financial stability and transparency to thousands of farmers who raise broiler chickens across the state, said Melanie Canales, a project manager for RAFI-USA, a North Carolina-based nonprofit that advocates for farmers.

What’s not clear is whether the new rule, which sets a base pay for poultry growers, will stick. It is scheduled to go into effect in July 2026.

Before then, President-elect Donald Trump and his new administration could eliminate the rule, said Steve Etka, policy director for Campaign for Contract Agriculture Reform, a national advocate for farmers and ranchers.

Etka said advocates will have to make their case to the new administration on why poultry growers need the protections.

In doing so, they’ll battle groups like the National Chicken Council, which represents the broiler industry and has lobbied against the change.

“This rule – which Congress never asked for – will lead to rigid, one-size-fits-all requirements on chicken growing contracts that would stifle innovation, lead to higher costs for consumers, decrease competition, and cost jobs by driving some of the best farmers out of the chicken business,” officials with the council wrote during a public comment period last year.

Bob Ford, executive director of the N.C. Poultry Federation, said some growers here will be in favor of the change. Others are happy and make a good living under the current rules, he said.

“The ones who have been successful aren’t looking for any kind of change,” Ford said. “The ones who haven’t been successful are saying ‘Oh, wow. This might help me out.’”

With the chicken council opposing the change, Ford said the North Carolina federation, an affiliate of the council, will likely oppose it, as well.

Poultry growers in the driver’s seat

This finalized “Poultry Grower Payment Systems and Capital Improvement Systems” rule says poultry companies, which supply farmers with chicks and feed, cannot reduce the base pay stated in a farmer’s contract.

“The worst aspect of the tournament system is how it pays some growers less money than the base price stated in their contract in order to pay other growers more,” Canales wrote in an email to The Charlotte Observer. “The new rule still allows companies to provide bonuses based on performance but no longer allows them to deduct money below a fixed base price, and this makes grower income more reliable and predictable.”

The rule also requires that poultry companies provide farmers with research that shows how improvement projects, such as upgrades to chicken houses, would benefit them.

In a 2022 investigation called “Big Poultry,” The Charlotte Observer and the News & Observer of Raleigh found many farmers were surprised when poultry companies required them to spend hundreds of thousands of dollars for equipment upgrades if they wanted to stay in business.

The rule change will help farmers decide if the project is financially in their best interest, Etka said.

“They haven’t really had that before,” Etka said. “It puts the farmers back in the driver’s seat of their own business.”

The rule is the U.S. Department of Agriculture’s third regulatory reform under the Packers and Stockyards Act in recent years. The act, formed in 1921, protects farmers and ranchers from unfair and discriminatory practices.

Last year, a USDA rule required that poultry companies be more transparent with farmers, telling farmers in their contracts how many flocks and chicks they’ll receive each year. The information gives farmers insight into how much income they might earn, growers said.

‘Tournament system’ benefits some, not others

Some North Carolina poultry growers are publicly critical of the tournament system, which pays farmers on how they grow the birds.

Farmers interviewed by the Observer in 2022 complained that the system can punish them for things they can’t control, such as the quality of the chicks, feed they receive from the company or the time that it takes the company to pick up one flock and deliver another.

“They say it is a reward system … but really it’s a way to penalize farmers unfairly,” Watts said.

Under the new USDA rule, poultry companies will have to consider factors they control, such as the quality of the birds and feed, when determining how much growers are paid.

In 2015, Watts filed a federal whistleblower complaint alleging that Perdue Farms retaliated against him after he publicly said Perdue sent him sick birds that the company refused to help.

He left the industry in 2016.

Last year, Perdue sued Watts and the U.S. Department of Labor. The lawsuit, filed in federal court for the Eastern District of North Carolina, challenges the constitutionality of Watts’ case and seeks to stop it from going forward.

A North Carolina powerhouse industry

Growing chickens and turkeys is North Carolina’s No. 1 agricultural industry. Farmers here raise more than a billion birds annually, taking in some $8.7 billion in cash receipts in 2022, according to the USDA.

That year, The Charlotte Observer and The News & Observer of Raleigh investigated the secrecy cloaking the state’s poultry industry.

Big Poultry, an award-winning series, showed how industrial-scaled farms produce billions of pounds of waste annually with little oversight.

North Carolina officials do not track where that waste goes, the investigation found. They also do not require that neighbors be notified if a poultry farm is planned near their homes. In fact, state leaders do not make public the locations of poultry farms.

The Big Poultry project found that the contracts poultry farmers sign can leave them with mounting debts and little income.

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