Regulation: Chicken Business

The Americans are our teachers in everything regulatory. I learn a lot about what is happening in the USA because I know that it will come to us next year or so.

A federal judge imposed a temporary restraining order and injunction December 29 against further slaughtering and processing at the plant, which serves the ultra-Orthodox enclave of New Square, home to members of the Skver Hasidic sect. The U.S. Attorney's Office for the Southern District of New York had requested these measures after numerous attempts by federal officials since 2002 to get the slaughterhouse to comply with the guidelines of the Poultry Products Inspection Act.

The plant had been found by federal authorities to have numerous violations: (1) poultry residue was found on the plant's walls and in the manager's office (J: probably some chicken blood or something like that, a worker or the manager found it easier to clean his hand on the wall than washing it); (2) there was no sanitizer in the bathrooms (J: what is a sanitizer? toilet paper?); (3) a chiller tank full of processed birds had no running water (J: someone closed the faucet), and (4) pools of stagnant water and piles of trash surrounded the plant (it was out of the fence, in the commons).

The slaughterhouse was already under fire for its attempt to build a bigger plant, five times the size of its current one, close to New Hempstead. Officials were particularly upset by the fact that New Square Meats had received a $1.62 million grant from New York's Empire State Development Corporation to subsidize the new building without getting approval first from the county- or town-planning departments.(J: I see that regulatory chaos reigns in America too).

Slaughtering hundreds of thousands of chickens per day is a dirty business done by uneducated workers. These regulators have closed the plant for some worker recently arrived from the New Guinea Highlands forgetting to close a faucet or replacing the toilet paper. I am not against hygienic, sterile, operation-room clean slaughterhouses. The problem of increasingly severe regulations is that the ideal of perfection can never be reached. You cannot build a business plan or calculate the feasibility of an investment in an everchanging, chaotic regulatory environment. You are never sure if you have all the permits or if there is another unknown agency out there that needs to be placated. And how much it will cost. The main problem, I think, is the uncertainty of all.

My clients come to me and demand CERTAINTY. Tell me J what is what they want from me to be OK with them? How much will it cost to get the permit? They are ready to pay much money on the condition that it is final, that paying that tribute they be left in peace. Unfortunately I can never give a final estimate of what are the final limits of regulatory demands, which change every year, and I cannot give an estimate of how much it will cost. They demand from me a contract that I'll be paid only after receiving the permit, and in fact I do sign that type of contracts, but I am always deceived into underestimating future (next month's) regulatory hurdles and demands. That is the cause of the terrible misestimate I submitted in the Southern chicken project (my price: 5000 shekel; price actually paid by the next door farm: 40,000). I cannot estimate in advance the amount of work required to get the permit.