Following the bankruptcy of Pure Prairie Poultry, concerned members of Congress are questioning loans and grants to the bankrupt company amounting to $45 million.
In a letter addressed to Secretary of Agriculture, Tom Vilsack, the legislators are questioning the basis for financial support and evaluation of the enterprise with respect to both collateral and capacity to repay the principle. Failure of the company left 50 contractors in three states without income and 1.3 million broilers had to be euthanized since there were no funds available for feed or care.
The failure of Pure Prairie Poultry raises the question of numerous loans made to aspirant and small-scale livestock producers under various rural development
programs. Since 2001, the Department of Agriculture under the current Secretary has attempted to restructure meat and poultry production by supporting and creating alternatives to existing packers and integrators. The USDA refers to loans and grants as “investments”. This presumes a return on the public funds assigned with eventual repayment and with interest on loans. Since public funds are involved, USDA administrators should exercise competent and diligent oversight as would be conducted by a financial institution. The USDA in its futile efforts to encourage competition with established packers and processors has been effective in developing programs to disperse public funds but has been abysmally incompetent at quantifying the outcomes including repayment.
The intervention of the Inspector General of the USDA or relevant federal agency is clearly indicated given the magnitude and extent of loans and grants made during the past three years.