The Hagstrom Report

Agriculture News As It Happens

Navigation

Stabenow: How much taxpayer investment in Smithfield could be sold to Chinese?

In an interview broadcast on C-SPAN on Sunday, Agriculture Committee Chairman Debbie Stabenow, D-Mich., noted that she has “a whole range of questions” about the proposed sale of Smithfield Foods, the U.S.-based largest pork producer in the world, to a Chinese company, Shuanghui International.

Then she asked:

“We’ve spent 20 years of innovation and hard work, both the public sector funding it — and that’s one of my questions, how much have we, as American taxpayers, put into funding technologies used broadly by the pork producers and others in the agricultural industry that has allowed us to be the leaders in the world in new technologies and safety and so on. And so we have now a company coming in that will get all that technology, all that American ingenuity, all of the investment of public taxpayers, and they are purchasing that, essentially.”

Stabenow also noted that Smithfield says that the sale to the Chinese will open a market for U.S. producers.

But she added, “My concern is our biggest export market in the U.S. is Japan, right next door to China. So what happens when you have a Chinese company now owning, and then do we know that they will always be exporting from America, or are they going to be exporting from China, and our pork producers lose their largest market, which is Japan?”

Stabenow also asked whether the Committee on Foreign Investment in the United States — the Treasury-led inter-agency committee known as CFIUS that must approve the sale — will consult with the Agriculture Department and the Food and Drug Administration.

“I want to know is USDA going to have a presence there,” she said. “Are they going to look to FDA? What do we view as national security?”

Asked whether legislation is needed on food security, Stabenow said, “I think it’s important that we get food security into the review process, so that’s one of the questions that I have. When they’re looking at national security, what is national security? Are they really looking at food safety, food access as security? I think it is.”

Stabenow said she is encouraging other U.S. companies to put in bids for Smithfield.

“We are in the middle now of a 30-day process where other companies can bid to purchase Smithfield,” she said.

“Frankly I would encourage someone else, an American company, to bid so there were options, because we certainly want this company to do well, and we want them to continue employing people and so on, which is also a consideration. Obviously the jobs is very, very important. But I do think that there are things that we need to think about in a global economy, as we look at the strengths of our country and the fundamentals. And food security better be listed right up there. We don’t go to war because of shortages of food. We are in a very different situation. We’re feeding the world. And it’s incredibly important that we understand the significance of this.”

Stabenow also said she shares the concerns of Sen. Charles Grassley, R-Iowa, that the sale to the Chinese might raise anti-trust issues.

But she also said, “One of the challenges for us is that if we were to look at one of the other American companies purchasing instead, there’s also issues around antitrust, I think, because there are so few pork processing operations and so on. And so because of the consolidation of the industry, I think there are a number of questions around that.”

Stabenow noted that she has not “absolutely said I’m opposed,” but added, “Short-term it may sound great, short-term markets opening up and so on. Ten years down the road, what does this mean for our pork producers? What does it mean for my pork producers in Michigan? What does this mean for food safety? A whole range of things.

“And what are the implications going forward in terms of other companies buying our food producers, when this has been the strength. This is the one area where we have a trade surplus, where we’re exporting more than we’re importing. And so I think as a country we have to be very thoughtful about this.”

The Agriculture Committee can and may hold hearings, Stabenow said, but right now it is putting together a list of questions to send to CFIUS.

“I think it’s our job to raise those questions on behalf of the public and get as many answers as we can,” she said.

The C-SPAN interview was conducted on Friday by Jerry Hagstrom and Niels Lesniewski of CQ-Roll Call, and aired Sunday. It can be seen on the C-SPAN website. A transcript was provided by Farm Policy.com.