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Integrator Liability
What is an integrator_ An integrator is a company that controls more than one phase of hog production, processing and marketing. Some integrators own hog farms and
also contract with other farms to raise their hogs. An integrator may also own a processing facility.
Who are the largest integrators in North Carolina_ Virginia-based Smithfield Foods, Inc. is the nation's largest pork integrator and, according to its annual report, is the world's
largest producer and processor of hogs. According to the NC Attorney General, Smithfield owns approximately 70% of the hogs raised in North Carolina.
Other major integrators doing business in the state include Premium Standard Farms (the nation's second largest integrator), Prestage Farms and Goldsboro Milling Company.
What is the relationship between the integrator and the contract farmer_ The relationship is generally one of employer-employee or principal-agent. The integrator owns the
hogs, supplies the feed, provides veterinary services and virtually controls all htmlects of hog production on the farm. Under a typical production contract, the contract farmer provides
the facilities, the land and the labor and bears the sole responsibility for managing the hog waste.
What is integrator liability_ Integrator liability, or owner liability, simply means that the integrator shares legal liability for environmental problems on contract farms.
For example, an integrator would share responsibility with the contract farmer for any waste spills or other permit violations.
Do Smithfield Foods or other integrators currently pay to manage hog waste on contract farms_ Typically, contract farmers incur all the waste management costs and assume sole liability for any environmental violations. The integrators, on the other hand, are not held responsible for ensuring that waste produced by their hogs is managed in compliance with water quality laws. Placing full liability on contract farmers, rather than the actual owners of the hogs, is simply not fair.
What should the General Assembly do_
The General Assembly should pass a law to make integrators jointly liable for civil penalties assessed against contract farmers for environmental violations (i.e., violations of permits, waste management plans and any other environmental law or rule) and jointly responsible for any remediation, clean-up and/or closure requirements associated with such violations. Perhaps the best way to do this is simply to require that an integrator be co-permitted with each of its contract farmers.
Why is integrator liability a good idea_ Requiring those who own and/or control hogs to be held legally liable for environmental violations associated with contract hog
farms would provide a greater incentive to operators and owners to manage hog waste responsibly and in full compliance with waste management plans, permits and state law. Integrator
liability would also ensure that the state receives all penalties assessed for such violations, clean-up and/or closure costs. Most importantly, integrator liability is critical to
ensuring that taxpayers do not pay the costs associated with pollution from large animal operations.
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