Chicken Farms In Arkansas and Oklahoma

Discussion in 'Hmong' started by slee00, May 23, 2006.

  1. slee00

    slee00 sarNie Adult

    I just read these articles on LaosVietien site written by Chicago Tribune about some people families in Arkansas who moved there to raise chicken...they bought chicken houses and acreage of lands and houses with their lifesavings...but now after a couple of years having to file for bankruptcy....they lost everything....

    Are they making money or what's going on? I know some of us must have one or two relative that moved there recently. I know one of my relative from my husband's side moved there about 3 years ago...He bought his chicken farm for a little over $800,000...He claimed they make money...his kids told us they dont have any money...and that they owed a lot of money....I kinda have a feeling my cousin has not been truthful....

    So someone give me your opinion...I will try to post the article later.
     
  2. slee00

    slee00 sarNie Adult

    (credit to Chicago Tribune)

    Hmong poultry farmers cry foul, sue
    Chicago Tribune
    By Howard Witt
    May 15, 2006

    In almost every case, when the banks set them up with these loans, they were preparing them to fail.

    When Eric Xiong quit his factory job and bought a modest turkey farm nestled here in the Ozark Mountains three years ago, the 32-year-old Hmong immigrant from Laos thought he had finally snagged his piece of the American dream. At last he could leave behind a string of dreary manufacturing jobs, be his own boss and provide for his wife and two young children.

    But the harder Xiong worked, it seemed, the more money he lost. The first year he fell $20,000 short of what he needed to pay his bills. The next year he lost $50,000 more. By the end of last year, he had depleted his savings, stopped paying the mortgage on his farm and started borrowing from relatives to put food on the table. He declared bankruptcy a few months ago.

    'When we bought this farm, the bank promised us it would provide us a decent living,' he said. 'But we've been losing money from the very first day.'

    If Xiong's story were isolated, it might be written off as another sadly familiar tale of an inexperienced small farmer gone bust in the notoriously difficult poultry business. Except that Xiong is far from alone.

    Across Arkansas, Oklahoma and southern Missouri, more than a dozen Hmong poultry farmers--most of them uneducated Vietnam-era refugees with little command of English--have filed for bankruptcy protection this year. Hmong community leaders and advocacy groups estimate that scores of others are in financial trouble.

    All of the farmers in bankruptcy appear to have paid far more for their farms than they were worth and are saddled with large mortgages they cannot repay. Most say they were told to sign loan documents they didn't understand that seemed to greatly overstate the income potential of their farms and understate their expenses.

    Now small-farmer support groups, attorneys and Agriculture Department officials are asking whether some of the Hmong, who began moving here five years ago from Minnesota, Wisconsin and California, were defrauded.

    All the loans have one feature in common: They are guaranteed by the U.S. Department of Agriculture's Farm Service Agency program to assist minority farmers, which pays off up to 95 percent of each loan if the farmer defaults, thus relieving the banks of nearly all risk.

    Advocates for the Hmong wonder whether an informal 'good old boy' business network spread the word that the Asian immigrants, who typically had cash for down payments, were easy marks--and a chance to unload troubled farms.

    'The banks don't give these loans much scrutiny because they know the federal government will repay them if the farmer defaults,' said Sean Brister, an attorney in Fayetteville, Ark., whose firm has filed six lawsuits in recent weeks on behalf of Hmong farmers.

    Moving into region Others perceive racial motives in a place where Asians and other minorities are not frequently encountered. The Hmong stand out because few have learned English or assimilated decades after they began arriving in the U.S. from refugee camps in Thailand, where they were driven in 1974 after backing U.S. troops battling Laotian communists.

    The first few Hmong farmers arrived here in 2001 to buy poultry farms. Now Hmong community leaders estimate that 500 Hmong families operate poultry farms in the three-state region.

    'I'm finding ethnic prejudice in all of this,' said Jim Pate, an attorney in Russellville, Ark., and Vietnam veteran representing several Hmong farmers in bankruptcy court. 'In almost every case, when the banks set them up with these loans, they were preparing them to fail.'

    The attorneys and advocates involved stop short of alleging any conspiracy to defraud the Hmong farmers, or even direct collusion between the various banks and appraisers involved in all of the cases. And they acknowledge that some of the bankruptcies might be the result of market forces: The rush of Hmong to the region seeking to buy poultry farms bid up prices beyond what the inexperienced farmers could sustain.

    Yet there are hard-to-explain similarities in the paperwork for a number of the loans.

    In some cases, bank loan officers added 30 percent or more to the income estimates provided by the poultry companies that issued the production contracts to the farms. In others, the banks added projected income from the sale of poultry litter--a waste product farmers typically must pay haulers to remove.

    'I don't have a good answer to the question of whether this is all organized in some way,' said Scott Marlow, director of farm preservation for the Rural Advancement Foundation International in Pittsboro, N.C., who has reviewed the Hmong situation. 'What I can say is that across a series of applications that we read, chunks of the applications would be identical or very similar.'

    In four cases Brister is pursing, loan officers from different banks filled in similar estimates of $18,000 to $20,000 for the Hmong family's living expenses --regardless of family size.

    In Xiong's case, that expense estimate allowed for just $9 per day to feed his family of four.

    Unlike many of the Hmong families in the region, Xiong speaks English well and holds an advanced university degree. But he says his education did not help him understand the financial paperwork associated with the purchase of his 143-acre turkey farm in early 2003.

    Among those papers is a letter from Cargill Turkey Products, which issued the production contract to the farm Xiong bought. In the letter, addressed to a loan officer at Regions Bank in Ft. Smith, Ark., Cargill predicted Xiong could earn $107,000 to $156,000 by raising turkeys and selling them to Cargill.

    But when the loan officer filled out a federal loan guarantee form forecasting Xiong's income, he wrote down $186,320, plus $4,670 for the sale of litter waste--nearly $35,000 more than the highest estimate provided by Cargill.

    Other documents included in Xiong's lawsuit allege that the real estate appraiser inflated the number of turkeys the farm could sustain and misrepresented the age of the buildings on the property, both of which helped to justify the $865,000 that Xiong paid for the farm.

    Denying misrepresentations The real estate appraiser named in the lawsuit did not return calls seeking comment. But for their part, Regions Bank officials strongly deny that they misled Xiong or any other Hmong farmers or purposefully wrote unsustainable loans.

    'We don't make loans that we think people are not going to be able to repay,' said Mike Cialone, president of the Regions Bank branch that issued Xiong's mortgage.

    But advocates for the Hmong contend that the banks stood to benefit in several ways. Many of the sales involved farms that already were troubled and in danger of default, so selling to the Hmong meant converting shaky mortgages into mortgages with government guarantees. And the higher sale prices paid by the Hmong meant bigger loans and more interest revenue.

    Federal agriculture officials overseeing the guaranteed loan program say they have heard anecdotal evidence of a handful of Hmong bankruptcies but have yet to find clear trends that might point to malfeasance.

    But they acknowledge that they do not normally scrutinize loan guarantee applications received from 'preferred' bank lenders in the Farm Service Agency program, such as Regions Bank, according Bob Bonnett, chief of the guaranteed loan division. The officials say they are reviewing the lawsuits and bankruptcy petitions.

    'It is a crime if people are being taken advantage of down there,' Bonnett said. 'If we find out that has been happening, we will take action.'

    Any such enforcement action will come too late to help Xiong, however, who expects he will lose his farm when the bankruptcy proceeding is complete.

    'After the first year, when it was clear that I could not support this farm, I called the real estate agent and told her I wanted to sell,' Xiong said. 'She said it was worth $200,000 less than what I paid for it--what she let me pay for it. I put my trust into other people and they took advantage of me.'

    ---------- hwitt@tribune.com
     
  3. slee00

    slee00 sarNie Adult

    (Credit to Pioneer Press)

    Farm of failed dreams
    Bankruptcy ends a Hmong-American family's quest for success on a poultry farm in the Ozarks. Other families with the same story have sued, alleging real estate agents and banks misled them.
    BY LAURA YUEN
    Pioneer Press
    Pao Vang, right, waits as his wife Jada Lo Vang reads through the latest bankruptcy papers they received about their farm and eight chicken houses.
    BEN GARVIN, Pioneer Press
    Pao Vang, right, waits as his wife Jada Lo Vang reads through the latest bankruptcy papers they received about their farm and eight chicken houses.
    More photos

    * Poultry farmers urged to research first

    STILWELL, Okla.

    The newspaper ad promised expansive land for chicken farming. After reading it, Pao Vang and Jada Lo Vang of Fridley chased the American Dream all the way to the Ozarks.

    Three years after arriving on the eastern edge of Oklahoma, their dreams have been dashed. The bank is foreclosing on their farm, and they are living in a relative's back yard in a tent.

    The Vangs say the poultry business has taken everything they have worked for. They and more than a dozen Hmong-Americans, including others from the Twin Cities, have filed for bankruptcy protection.

    They are representative of the other Hmong families who have struck out for the Ozarks in the past six years now facing financial collapse. At least six of those farmers have sued, alleging that bankers and appraisers led them into signing questionable real-estate deals.

    Many believe they overpaid for their farms and blame appraisers for inflating values by up to 45 percent, their attorneys say. Exaggerated income projections from the banks made it unlikely the farms would generate enough money to pay off the debt, the attorneys add.

    The number of disastrous outcomes has compelled farm advocacy groups to caution Hmong-Americans in Minnesota who may be tempted to join the industry after hearing about the farms by word-of-mouth and ads in Hmong publications. Those monitoring the situation estimate about half of the Hmong farmers could be facing difficulties.

    "There's a myth out there that poultry farming is success," said Laura Deaton Klauke, who has recently counseled growers in Northwest Arkansas through the Rural Advancement Foundation International-USA. "I've yet to see a poultry millionaire. If anyone tells you it's a big money-maker, they are lying."

    LOSSES IN SECOND YEAR

    Pao Vang, 39, and his wife Jada Lo Vang hoped the chicken business would rescue them from working overtime in factories and driving school buses in Minnesota. They moved to Oklahoma in the summer of 2003 with their six children, now ages 5 to 18. The couple put down $120,000 from a retirement fund and their life savings for a $680,000 investment: eight chicken houses on 60 acres of wooded land.

    They had a few good flocks at first but began losing money in their second year. After falling behind on their mortgage, the couple lost a contract with Tyson Foods to raise its chickens. The family saw the last of their broiler hens leave the farm in March.

    The Vangs moved out of their home in early April. "We have no house, no place to live," said Jada Lo Vang, 37.

    "I thought we should have never come down here," said the couple's oldest son, Kou Vang.

    Tyson officials say contract poultry growers, including many of the new Hmong farmers, are vital to the company. "We want them to succeed," said spokesman Gary Mickelson. "That's why we have a system in place to help. In addition to supplying the chickens and feed, we also provide technical assistance to support their efforts to operate efficiently."

    Agricultural groups in the tri-state region of Arkansas, Oklahoma and Missouri estimate 500 Hmong-American families have settled there, with most raising chickens and turkeys.

    Their enthusiasm to own land, become self-sufficient and return to their farming roots became obvious to Sean Brister, a Fayetteville, Ark., attorney whose firm represents several Hmong. Some potential buyers were old enough to have tended the fields in the hills of Laos before the Vietnam War. Even after postwar persecution pushed them into refugee camps and, eventually, to states like Minnesota, many Hmong remain tied to agrarian and family ideals.

    "They'll do anything it takes to get the farm," Brister said.

    That hunger led the buyers to buy farms at inflated prices, he said. Although Brister and his colleagues stopped short of pointing to a conspiracy, they blame players in the real estate business, from appraisers who pumped up property values to banks that inflated cash-flow projections.

    North Carolina-based RAFI-USA, along with Minnesota groups like the Farmers' Legal Action Group and the Minnesota Food Association, were alarmed last month when they began to investigate the loan documents signed by a couple of dozen struggling Hmong-American farmers in Arkansas.

    "Even if the farmer did a superb job raising chickens and was the best in the country, they were not going to make their mortgage payments," said Klauke, of RAFI-USA.

    In some cases, sellers refused to show properties to buyers before closing, Klauke said. Others misrepresented the conditions and ages of chicken houses, which can affect production rates. By the time families filed for bankruptcy, they typically owed the banks $500,000 or more.

    The Hmong-Americans' keen interest in poultry farms — while others were fleeing the business — drove up already soaring land values, Brister said. Their desire for land and the crush of mortgage documents that weren't in their native language made them easy targets.

    "You don't see a lot of turnover for these poultry farms but for this rush," said Brister's colleague, Mark Henry of the Henry Law Firm in Fayetteville.

    PAYING TOO MUCH

    Most of the families who have filed for bankruptcy protection financed their purchases through bank loans guaranteed by the federal Farm Service Agency, which generally pays 90 percent of the loss if borrowers default. The arrangement encouraged banks to lend money that they ordinarily wouldn't, Henry said.

    Jim Radintz, who heads the loan-making division for the FSA, said his agency would monitor the outcome of the recent allegations. If it turns out that a deal-broker participated in fraud or misrepresentation, he said the agency could deny a portion or all of a claim.

    In fiscal year 2005, the FSA guaranteed 188 loans for Asian-American farmers in that tri-state region, worth $72 million. How many of those loans were for Hmong-Americans isn't known.

    A host of outside factors — including the rising cost of propane and natural gas — has made it difficult for all farmers, Radintz noted.

    However, he has heard from FSA staffers in the Ozarks who suggested that Hmong farmers were paying too much for their farms, but still were determined to purchase the land.

    "A lot of these folks may have been unsophisticated in business matters, and they relied on people who were more motivated by profit," he said.

    The Hmong now headed for financial ruin generally had built comfortable lives in the United States. Tria Xiong, 38, said he enjoyed decent benefits after working 19 years as a Postal Service clerk in Milwaukee. Enticed by opportunities in the Ozarks, he and a cousin both bought turkey farms.

    Tria Xiong and his wife put about $85,000 of their own money in.

    "When you talk to the sellers and the bank, they said … every year I will have $42,000 in pocket (after paying off mortgage, utilities and other expenses)," said Tria Xiong of Oark, Ark., who filed for Chapter 12 bankruptcy reorganization. "I say, 'Well, that's good.' Well, you never make anything."

    He and his cousin have sued their lenders and appraisers. Tria Xiong said he fears he paid hundreds of thousands of dollars too much for his 78-acre farm, which he bought for $700,000 in 2003.

    Defendants in Tria Xiong's case — a Clarksville, Ark., man who appraised Tria Xiong's property and an official with Simmons First Bank in Russellville, Ark. — declined to comment.

    As for Tria Xiong, the father of five said if he can't stay on his farm, he will follow other failed farmers to Tulsa, Okla., to work in factories in the same jobs they had hoped to escape.

    Laura Yuen can be reached at lyuen@pioneerpress.com or 651-228-5498.
     
  4. anjos

    anjos Guest

    well..... tell ya what...... my father in law are soooo crazy over this stuff too.... they just brought some land and house in ottowa....cuz... they also hear that people make lots of money from selling chicken and cow... lots of my husband's couise they also doing the chicken bussien too.... but from what I hear they dont make that much money out of it too...... my father in law just move to thier new home.... just 5 months ago.... and trust me...... they dont make money form doing that...... one things that you have to think about is that if those people really make lots of money why do they keep on selling thier land and things..... why dont they kept on doing it????????? well...... I havent see the result of my father in law yet..... cuz... he just got strart it.... but I think pretty soon we'lll know...... I'll keept ya... update.....
     
  5. YM_gurl

    YM_gurl sarNie Oldmaid

    well, my parents are planning to move to Oklahoma.. but not to raise cows and chickens... :)
     
  6. vong

    vong sarNie Egg

    just like any other business you can make money if you do your home work first, just like buying a house know how much you can make a payment, if you make 10-15 an hours you don't go out buy a 300,000.00 house used a common sense
     
    From what I herd Hmong poeple got so much money they offer more then what is the farm worth 500,000 dollars farm they willing to pay 700,000,farm  appraisers didn't help, thats why do your own home work.
     

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