Things continue to go downhill. The animals have to rebuild the windmill again, and they have no food and it's winter and Boxer is hurt and it's cold and they have to walk to school every day in the snow, barefoot, uphill both ways.
The pigs, however, seem to be doing just fine in their fat and alcoholic state.
Boxer overexerts himself and collapses; apparently, he is ready for retirement.
The pigs send him to the "hospital," and by hospital they really mean glue factory. No, really, glue factory, as Benjamin reads off the side of the departing van.
Old Benjie finally shows some emotion—namely, rage—as he sees his dear friend being taken to the slaughter.
The pigs use the money they earned off Boxer to buy themselves whiskey.