Office of the Attorney General
Attorney General Greg Stumbo Gains Full Disclosure For Western Kentucky Hog Farmers

Press Release Date:  Wednesday, September 13, 2006  
Contact Information:  Vicki Glass, 502-696-5643 Office  

Attorney General Greg Stumbo announced today that his investigation of large-scale hog farming operations offered by Tosh Farms of Henry, Tennessee has resulted in major safeguards for Kentucky farmers. The Attorney General’s Office of Consumer Protection entered an Assurance of Voluntary Compliance (AVC) with Tosh Farms, concluding its examination of Tosh’s representations and contracting practices with Western Kentucky hog farmers. The AVC requires Tosh Farms to repay expenses of any farmer that decides to back out of the contract based on the findings of the investigation.

“This agreement ensures that Western Kentucky farmers will be able to make a more informed choice about whether to enter into these contracts,” said Attorney General Stumbo. “In addition, my office won significant improvements in the contracts on behalf of these farmers.”

Tosh Farms has agreed to provide a set of revised disclosures, a cover letter from the Attorney General, a disclosure of material risk, and a revised contract to hog farmers in Western Kentucky who wish to enter into contracts with Tosh Farms. Current and prospective farmers will also receive a letter explaining the Attorney General’s findings.

Tosh Farms must also allow any farmers who acted in reliance on the previous disclosures to back out of any contract and will repay any costs incurred in reliance on the initial disclosures challenged by the Attorney General’s Office.

The Attorney General’s Office found that Tosh Farms’ initial presentation overstated net cash flow, available assistance with environmental compliance, contract security and manure value. It further found Tosh understated to farmers the cost of maintenance and manure management.

The Attorney General’s office concluded that a farmer will likely only net an estimated $5,000 per year, per barn, over ten years, plus or minus the value or liability associated with the manure. Whether the manure is an asset or a liability will depend on the characteristics of the land available to the farms. This is in contrast to the $17,442 per year per barn initially represented by Tosh Farms.

The Attorney General also won significant concessions in the language of Tosh’s proposed contract with farmers. The proposed contract contained four separate provisions shifting to the farmers all liability arising in connection with the swine operation, in particular that associated with the manure management system.

“I demand that corporate integrators, like Tosh Farms, must shoulder their fair share of liability,” said Attorney General Stumbo. “Farmers must be protected from ruinous lawsuits. I am pleased to announce that Tosh Farms has agreed to accept liability arising from their and their agents’ acts or omissions with respect to their Kentucky contract hog operations.”

Stumbo continued, “Farmers are now in a position to decide whether these contracts are in their best interests. I will continue to make sure that the farmers who put food on our tables get a square deal when dealing with big corporations.”